Limited Liability Partnership in Georgia
Georgia’s strategic location is an asset to any investor wanting to form a company in Georgia. The country boasts of low tariffs, streamlined border clearance procedures and preferential trade regimes with partners like EU and the USA. Georgia’s foreign trade has been growing rapidly since 2003 as a result of aggressive policy reforms to make it easier and less expensive to trade across borders. Due to such a pro-business environment anyone would want to invest in Georgia.
There are many ways through which an investor can enter the Georgian market, one of which is incorporating a company in Georgia. The country offers various types of business entities, Limited Liability Partnership being the preferred one. A Georgia Limited Partnership is a type of business entity in which two or more people, called partners, carry on as a co-owner of a business for making profits. There are two types of limited partnership:
- Those whose liability before the creditors is limited by the fixed guarantee sum (Commandite), and
- Those who are personally liable (Complemetars)
The partners in LLP do not participate in the management activities. They may not object to the actions taken by other partners with a personal liability within the routine operations. All the profits and losses generated in the financial year that exceed an established amount are to be distributed on a pro-rata basis among the partners, unless otherwise stipulated by the company charter.
Features of an LLP in Georgia
- Limited partners only have the right to demand a copy of annual report and verify its accuracy per accounting records and other documents
- The partners are not obligated to return the profits received in the light of future losses
- Share of a limited partner may be transferred or succeeded without the consent of other partners
- The founders are all personally liable for any debt the company may undertake
How to Form an LLP in Georgia?
Georgia LLP has fewer requirements when compared to other business entities. Limited partners in the LLP participate in the business and share the profits without personal liability for the LLP's financial obligations, unlike general partners. Limited partners only have right to demand their due profit if their share in the capital is less than the agreed amount due to incurred losses or settlements. Once the business objectives have been decided and the partners have been named, the process of forming an LLP in Georgia becomes relatively straightforward. Follow the steps mentioned below for your partnership registration:
1. Choose a Name
You must first decide a name for your LLP. The name must not resemble with the name of an existing company in Georgia. However, it must include the words “Limited Liability Partnership” or an abbreviation “LLP”.
2. Draft the Articles of Association
The company charter or the Article of Association (AoA) must include the following information about the partners:
- Company name of the business entity
- Legal form of the business entity
- Official address of the business entity
- E-mail address of the business entity
- Name, residing address, personal number and signature of founding partner(s)
- If the founder is a business entity – the application should include its legal name and registration details, legal address, the name of a body that registered the business entity, the date of registration and identification code, information regarding its representatives
- Obligations related to limitation of ownership title over partners shares
- Any limitation to the representation power vested in persons responsible for representing and leading a business entity
- Indication of which of the partners is/are Complementar and which is/are Commandite
This information must be signed by every partner and notarized in Georgia.
After this, you must also register to get the tax registration number, open a bank account, and obtain other permits necessary for your business activity.
Documents Required to Set Up an LLP in Georgia
- Decision of all the founders on incorporation of an LLP
- Decision on appointing the Head of the Company (Director) or the relevant Power of Attorney thereof and written consent of the latter on such appointment
- Passport photocopies of the founders and director(s)
- Notarized permission of the company’s legal address owner or rent agreement, if office area is rented
- Receipt evidencing payment of registration fee
If you are looking forward to setting up your business in Georgia, do contact us for legal assistance. We at Business Setup Worldwide are here to help you set up an LLP in Georgia. Our advisors in Georgia have years of experience in this field and can make the complete process hassle-free.