To whom and in which cases is an extract from the registry of entrepreneurs and non-entrepreneurial (non-commercial) legal entities issued?
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An extract from the registry of entrepreneurs and non-entrepreneurial (non-commercial) legal entities is issued to any person upon a relevant request. The extract is prepared together with the decision on registration (except the case of cancellation of the registration).
Which entrepreneurial legal entities register in the registry of entrepreneurs and non-entrepreneurial (non-commercial) legal entities?
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The following entrepreneurial societies are registered in the registry of entrepreneurs and non-entrepreneurial (non-commercial) legal entities:
Joint liability society
Limited partnership
Limited liability company
Joint stock company
Cooperative
What is a non-entrepreneurial (non-commercial) legal entity?
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A non-entrepreneurial (non-commercial) legal entity is an organized entity with its own property, created to achieve a specific goal, which is independently accountable with its own property and it acquires the rights and obligations in its own name, enters into transactions and it can appear in court as a plaintiff and a defendant. Its purpose is non-commercial activity.
A non-entrepreneurial (non-commercial) legal entity can be membership-based, member-dependent or independent from it.
Who is an individual entrepreneur?
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An individual entrepreneur is a natural person who enters into business relationships in the name of his/her own. An individual entrepreneur is not a legal entity.
How is an individual entrepreneur responsible for his obligations?
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An individual entrepreneur is personally liable to the creditor for the obligations arising from his entrepreneurial activity, with all his property, or individually if nothing else is stipulated in the agreement between the entrepreneur and the creditor (except for the standard terms of the contract defined by the Civil Code of Georgia).
Who is the legal successor of an individual entrepreneur in case of cancellation of his/her registration?
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In case of cancellation of the registration of an individual entrepreneur, the relevant natural person shall be his/her successor.
Is the consent of the owner on the immovable object drawn up in the proper form necessary for the registration of the individual entrepreneur?
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If the owner of the real estate located on the declared address is an interested person, it is not mandatory to submit additional documents for determining the legal address. It is not mandatory to submit a document confirming the owner's consent or certificate of its usage for registering an individual entrepreneur on the address specified in the identity document (as well as the address of the temporary residence specified in the certificate of the displaced person). In any other case, the consent of the owner of the immovable object in the appropriate form or the document confirming the right to use the immovable object in the appropriate form shall be submitted to the registering authority.
On what basis is it possible to cancel the registration of an individual entrepreneur?
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Cancellation of the registration of an individual entrepreneur is possible in case of the application of the individual entrepreneur himself/herself or in case of death or recognition of the individual entrepreneur as dead or lost without a trace. Also, in case of his/her recognition as a beneficiary of support, unless something else is determined by the court's decision on his/her recognition as a beneficiary of support.
In the case of the death or declaration of an individual entrepreneur as dead or lost without a trace, the document confirming the cancellation of registration will be a certificate of death or a court decision in case of the declaration of an individual entrepreneur as dead/lost without a trace or as a beneficiary of support.
What is the standard statute? Which entrepreneurial entity can benefit from the standard statute?
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In order to register a legal entity, a founding agreement signed by all founders and duly certified shall be compulsorily submitted to the Agency. A mandatory part of the founding agreement is the statute of the legal entity.
The founders may develop the statute of the legal entity by themselves. If the founders do not develop the statute by themselves, they may use the standard statute approved by the Minister of Justice of Georgia for the subject of the relevant legal form, which is considered as part of the founding agreement of the entrepreneurial society. Standard statute can be used by any entrepreneurial legal entity in accordance with the relevant legal form.
The standard statutes of the joint liability company, limited partnership, limited liability company, joint-stock company and cooperative, approved by Order No. 791 of the Minister of Justice of Georgia dated November 29, 2021, can be found at the link: https://matsne.gov.ge/ka/document/view/5275911?publication=0
Which subjects are obliged to ensure compliance of the registration data with the requirements of the new law of Georgia "On Entrepreneurs"?
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According to the new law of Georgia "On Entrepreneurs" it was determined that the enterprise registered before the entering of this law into force is obliged to ensure compliance of registration data with the requirements of this law within 2 years after its entering into force. Otherwise, the registering body shall set additional 3-month period for the entrepreneur to ensure compliance of the registration data with the requirements of this law, which will be counted from the date of notification the addressee about the relevant decision established by the Article 18 of this law. According to the instruction "On registration of entrepreneurs and non-entrepreneurial (non-commercial) legal entities" approved by the order of the Minister of Justice of Georgia No. 797 of December 31, 2021, it was determined that the registration of an individual entrepreneur, an entrepreneurial society, a non-entrepreneurial (non-commercial) legal entity, a branch of a foreign enterprise and a non-entrepreneurial (non-commercial) legal entity, a branch of an entrepreneur registered in a free industrial zone or outside it, registered before January 1, 2022, will be considered as cancelled, if he/she does not bring his/her registration data into compliance with the requirements of the Law of Georgia "On Entrepreneurs" according to the law. Thus, it is the responsibility of all the above-mentioned entities to bring the registration data into compliance with the requirements of the new law of Georgia "On Entrepreneurs".
Which documentation is required for establishing an entrepreneurial society and how shall this documentation be certified, in accordance with the new law of Georgia "On Entrepreneurs"?
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For establishing an entrepreneurial society, it is necessary to present the founding agreement of the entrepreneurial society, which contains the statute. The founders can themselves draw up the statute of the legal entity, or use the standard statute approved by the Minister of Justice of Georgia for the subject of the appropriate legal form. The samples of founding agreements, which can be filled in by the interested person in accordance with the data determined by him, are posted on the official website of the National Public Registry Agency - www.napr.gov.ge.
The founding agreement of the entrepreneurial society is drawn up in a written form and it is signed by all the founding partners of the entrepreneurial society. The signature on the founding agreement of the society is notarially attestated. Notarial attestation of the signature is not mandatory if it is certified by the National Public Registry Agency or another administrative body or other person authorized by the registration body, or if the signature is put on in accordance with the Law of Georgia on "Electronic Documents and Electronic Trust Services".
For registering the entity, the consent of each person entitled to the management and representation of the entrepreneurial society shall also be submitted on performing this function (except the case when their will is expressed in the founding agreement of the entrepreneurial society) and a document confirming the payment of the registration service fee established by the law.
Which documents shall be submitted for bringing the new registration data of the subject into compliance with the Law of Georgia "On Entrepreneurs"?
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For bringing the registered data into compliance with the new Law of Georgia on "Entrepreneurs", the authorized person shall submit an application with the mentioned request. The application shall include the founding agreement signed by all the founders/partners of the entity and duly certified, the constituent part of which is the statute of the entity. In the founding agreement, mandatory registration data shall be specified in accordance with the new law of Georgia "On Entrepreneurs" (the samples of founding agreements, which can be filled in by the interested person in accordance with the data determined by him/her, are published on the official website of the National Public Registry Agency - www.napr.gov.ge).
To ensure compliance with the new law, the partners may use the standard statute (see on the link: https://matsne.gov.ge/ka/document/view/5275911?publication=0), which shall be indicated in the founding agreement. If the founders themselves develop a new statute of the enterprise, it shall be drawn up in accordance with the requirements of the new law of Georgia "On Entrepreneurs".
In order to comply the registration data with the new law, it is necessary to register the entity on the portal, in particular, the data of the person responsible for managing the authorized user's page (e-mail address) and representing the authority, the mobile phone number and e-mail address of the mobile operator active in Georgia shall be determined.
Since the new law established that the entrepreneur's legal address is his/her physical address on the territory of Georgia, the subject's legal address shall be determined in accordance with the mentioned requirement, or an authorized person shall confirm that the entrepreneur's already registered legal address is his/her physical address.
In case of changing the legal address, the interested person shall present the consent of the owner of the immovable object drawn up and certified in a relevant form or a document confirming the right of the interested person to use the immovable object drawn up in accordance with the law.
What is an e-portal? How to register on the portal?
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The electronic portal is a unified electronic platform of the agency, a virtual space for communication on which the decisions on registration, documents related to the registration process, information about convening the general meeting of the entrepreneurial society and other information/documents which shall be published by the entrepreneur in accordance with the legislation of Georgia are published. The electronic portal includes the registered data of the agency and the authorized user pages of the entity. On the Agency's registered data page, the decisions about the entity registration and the documents related to the registration proceedings, which are public and available to any person, will be placed.
The entity's authorized user page is an electronic platform (electronic address) appartained to the entrepreneur within the unified electronic portal, which is used for the purpose of communication between the entity and the agency and for providing the electronic services to the entity, as well as for publicly posting information/documentation, which should be published by the entity in accordance with the Law of Georgia "On Entrepreneurs".
During the initial registration of the entity in the registry, the agency creates the page of the entity's authorized user on the unified electronic portal - an electronic address that is valid until the cancellation of this entity. In case of an already registered entity, registration on the portal is possible simultaneously by the application submitted with the request for registering other data of the enterprise, or by submitting the application with the request for registering it specifically on the portal.
In order to create an electronic address, it is mandatory to indicate the mobile phone number and e-mail address of the person authorized to manage the entity in the founding agreement. It is not mandatory to specify the mobile phone number and e-mail address in the founding agreement, if the registration application is submitted to the agency directly by the person authorized to manage the entity. If the entity has more than one person authorized to manage, the mobile phone number, e-mail address and the managing person authorized to manage the page of the authorized user of the electronic portal shall be determined on the basis of their agreement, unless such a person is determined by the general meeting, according to the founding agreement.
Who is the person responsible for managing the page of the authorized user of the electronic portal and publishing the mandatory data defined by the law, and what are the consequences of not fulfilling this obligation?
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The head of the entity is responsible for managing the page of the authorized user of the electronic portal and publishing the mandatory data defined by the law. If the entity has more than one person authorized to manage, the mobile phone number, e-mail address and the managing person authorized to manage the page of the authorized user of the electronic portal shall be determined on the basis of their agreement, unless such a person is determined by the general meeting, according to the founding agreement. A person registered abroad and authorized to manage an entrepreneur or a branch of an entrepreneur is responsible for providing the published data/documents provided by the Law of Georgia "On Entrepreneurs" to the agency. The procedure for establishing the sanctions for non-fulfilment of the mentioned obligation, the types and the amount of the fine are determined by the Administrative Offenses Code of Georgia.
How shall the document confirming the representative authority (power of attorney) presented for the purpose of registration be certified?
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According to the Article 4, Clause 4 of the new Law "On Entrepreneurs" it is established that the representative authority requires notarization or execution of the signature in accordance with the Georgian law "On electronic documents and electronic trust services". Based on the above-mentioned, for the purposes of registration, the interested person must submit a notarized document or a document confirming the representative authority (power of attorney) executed in accordance with the Law of Georgia "On Electronic Documents and Electronic Trust Services".
Who is authorized to request making changes to the registered data of the enterprise, in accordance with the new law "On Entrepreneurs"?
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The basis for making a change in the registered data is application of the person authorized for the management and representation of the entrepreneurial society, unless something else is provided by the statute or the transaction submitted as the basis for registering this change.
In case of alienation of the share, changes in the registered data can also be made on the basis of the request of the alienating partner or the acquirer, and in case of inheritance - based on the request of the heir/heirs.
Changes in the identification data and the term of authorisation of the person for leading and representing the business community, the member of the supervisory board, can be registered based on the request of any partner.
Registration of the manager of the partner's share can be done according to the request of the respective partner.
Is the limited liability company or a joint-stock company obliged to indicate the amount of capital in the registration data, based on the requirements of the new law "On Entrepreneurs"?
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Indication of the amount of capital of the limited liability company in the registration data is not always mandatory. However, if there is, it is possible to indicate the maximum amount of capital at the time of its establishment, within which the limited liability company can make a decision about placement of the shares in the future (authorized capital). Also, it is possible to indicate the amount of the invested capital.
In case of a joint-stock company, the registered capital shall be indicated in the registration data at the moment of registration of the joint-stock company amount. Also, amount of the encashed capital must be indicated. In addition, if any, it is possible to indicate amount of the authorized capital.
The minimum amount of the capital of the joint stock company at the time of its registration should be at least 100,000 GEL. The encashed capital must be filled in monetary form and it must be at least 25% of the invested capital.
Is it possible for an entrepreneur to use the brand name of an already registered entity, based on the requirements of the new law "On Entrepreneurs"?
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According to the Law of Georgia "On Entrepreneurs", it is not allowed to use the wording identical or similar to the name of another legal entity registered in Georgia in the entrepreneur's brand name, without the consent of this entity. Thus, if the entrepreneur obtains the consent of the relevant entity, it is possible for him/her to use the name of the already registered entity or the wording similar to this name.
