Mandatory re-registration of companies in Georgia until 1 April 2025

Companies are required to undergo a reincorporation procedure in Georgia by 1 April 2025 under the provisions of the updated Law on Business Activities. This implies the need to amend the founding documents and comply with a number of new regulatory requirements. Otherwise, registration and provision of extracts from the National Public Register will be suspended.

Reincorporation of companies in Georgia

From 1 April 2025, all companies that have not undergone the reincorporation process will face a number of negative legal and financial consequences. Among others, the firm's status will be changed to ‘inactive’ in the official register of legal entities, resulting in loss of legal capacity and exclusion from the number of active business entities.

If the mandatory re-registration of companies in Georgia is not completed by 1 April 2025, the firm will lose the ability to conduct business with financial institutions, as Georgian banks will suspend or terminate all existing contracts with the entity, resulting in exclusion from financial transactions. There will be serious obstacles to international settlements and harmonisation of business transactions, including loss of trust from partners, which will significantly deteriorate the company's reputation in the global arena and limit its access to international markets and financial instruments.

How do organisations in Georgia have to re-register?

The new registration procedure, to be compulsory until 1 April 2025, covers the following legal forms:

• Limited liability companies.
• Joint-stock companies.
• Companies with joint and several liability.
• Limited liability partnerships.
• Co-operatives.
• Branches of foreign enterprises.

In order to carry out re-registration of companies in Georgia, it is first necessary to register an up-to-date telephone number on the official portal my.gov.ge, designed to carry out the registration procedure and subsequent verification of the beneficial owners and director of the company, in order to comply with identification and control requirements. Other actions to be performed:

• Specify the ownership structure of the company, including the number and class of interests or shares, as well as ownership expressed as a percentage, in accordance with applicable corporate law regulations.
• Amend the company's by-laws to, among other things, replace the existing employment contract with the director with a service agreement, which will optimise legal relations within the corporate governance framework, to comply with current legal and tax requirements.

If a company intends to cease its activity, a dissolution application is submitted through the my.gov.ge platform and the liquidation procedure of the company in Georgia is carried out in accordance with the provisions of the Law on Entrepreneurship.

Conclusion

From 1 April 2025, it will be legally difficult to manage a company that has not confirmed its activity. The legislation does not provide for retrospective settlement of such issues. To get the necessary support on this issue or to request support in re-registering a company in Georgia, contact our specialists directly.