Compliance with the New Law of Georgia on Entrepreneurs: Key Requirements for Existing Companies
In 2021, the Parliament of Georgia adopted the new Law of Georgia on Entrepreneurs, which entered into force on January 1, 2022. This legislation fully replaces the previous legal framework and is designed to align Georgian corporate law with European best practices, as set forth in the EU–Georgia Association Agreement.
The reform introduces comprehensive changes to company formation, governance, partner relations, and capital regulation, with the aim of enhancing legal certainty, corporate transparency, and overall business efficiency.
Mandatory Compliance
All companies registered prior to January 1, 2022 are required to bring their registration records, constitutional documents, and corporate structure into full compliance with the new Law no later than April 01, 2026.
If this deadline is not met, the National Agency of Public Registry will grant an additional three-month grace period. Should the company fail to comply within this timeframe, its registration will be revoked.
Required Documentation for Compliance
To comply with the Law, companies must submit updated constitutional documents to the Public Registry. These documents replace all previously filed foundational documents and are essential for maintaining legal corporate status:
1. Foundation Agreement
The Foundation Agreement is the principal constitutional document of a company. It defines its organizational structure and must include, at a minimum:
- Legal form, company name, and registered address
- Identification details of all shareholders/partners
- Capital structure and governing bodies
- Contact details (email and phone) of the person responsible for managing the company’s authorized user account with the Registry
This agreement must be signed in writing by all founding partners. Additional content may be required depending on the legal form of the company.
2. Charter (Standard or Individual)
The new Law introduces two types of charters:
- Standard Charter – Approved by the Ministry of Justice and applicable to various company types. Companies may opt for a standard charter by stating this in their Foundation Agreement. In such cases, the charter does not need to be submitted separately.
- Individual Charter – Custom-drafted in accordance with the partners’ specific requirements. It must include:
- The company’s legal form and business activities
- Any limitations on share transferability
- Information regarding the existence of a shareholders’ agreement (if applicable)
Why Compliance Matters
Failure to comply with the new Law by the designated deadline may result in significant legal and operational risks, including:
- Revocation of company registration
- Business disruption
- Increased exposure to legal disputes
- Reputational damage and reduced trust from partners, regulators, and financial institutions
Strategic Benefits of Compliance
Although compliance is a legal obligation, it also offers an opportunity to:
- Introduce modern and transparent governance practices
- Clearly define shareholder and director responsibilities
- Improve internal efficiency and minimize legal risk
- Increase corporate credibility, sustainability, and long-term value
Company directors and partners are strongly encouraged to approach this transition proactively and use it as a framework to strengthen internal corporate structures.
Contact Us
For consultations or inquiries regarding compliance with the Law of Entrepreneurs, please contact our office.