Companies in Georgia received a notification from the tax service, reminding them to bring their Charters into compliance with the new law on entrepreneurs, as well as to create a personal account on the electronic portal. I’ll tell you what this means.
From January 1, 2022, amendments to the Georgian Law “On Entrepreneurs” entered into force. This is the basic law that regulates the registration and activity of companies and entrepreneurs in Georgia. The changes are very important, in fact they radically changed the original 2008 law and established several mandatory requirements:
- All companies registered between December 31, 2023 and January 1, 2022 must bring their Charters into compliance with the requirements of the new legislation.
The procedure is paid. Registration period – 1 working day.
The company can join the standard charter approved by the Ministry of Justice or develop an individual charter.
- All companies registered before January 1, 2022 are obliged to create a personal account on the electronic portal until December 31, 2023. The portal will work simultaneously with the public registry. The director of the company will have access to it, however, the information posted on the portal is available to any third party. All documents (decisions on changes to be made, convening a general meeting, etc.), on the basis of which changes are registered in the public register, or whose public placement is provided for by law, must be placed on the personal account.
The procedure is free and is carried out after January 1, 2022 during the first application to the public register of the entrepreneur.
- The joint-stock company is obliged to create capital in the amount of at least 100,000 GEL according to the new version of the company’s charter within 5 years from the date of registration, unless a shorter period is established by the charter.
Companies that do not bring their Charters into compliance with the law or are not authorized on the portal may be removed from the public register in accordance with the law.
Although registration of new Charters in the public register and authorization on the electronic portal are fast procedures, their preparation may take several months, especially in companies with several partners, foreign partners and legal entities with partners. Convening a general meeting of partners, preparing powers of attorney for participation abroad and legalizing them in Georgia, holding the meeting and processing its results – it takes time.
The good news: All actions can be performed on the basis of a notarized power of attorney issued by the partners/shareholders and the director in their country of residence.
JUST Advisors’ corporate practice lawyers have extensive experience in establishing the corporate structure of companies, developing individual charters with a complex composition of governing bodies (supervisory board, management board, several directors), maintaining the balance of powers among them (approval of transactions, making decisions by qualified majority) and various With the presence of category shares/shares, in signing shareholders’ agreements/partners’ agreements that provide for special obligations of shareholders/partners, overcoming impasses, selling businesses, resolving corporate conflicts and implementing M&A transactions, including due diligence legal procedures.
For JUST Advisors clients, the authorization service on the electronic portal and the compliance of the charter with the law are subject to special conditions.