A domestic company is obliged to 15% corporate tax on profits and 5% withholding tax (when dividends are pdistributed to the shareholders). There are low running costs. Also, profit can be “parked” in the company tax-free. This is perfect for local businesses in Georgia.
Limited Liability Company (LLC) is the most common entrepreneurial form in Georgia. According to the Law “On Entrepreneurs”, the liability of an LLC before its creditors is limited to company assets, and partners are not personally responsible for the company’s liabilities. Capital of an LLC is divided into shares. There is no legal requirement for a minimum or maximum amount of capital. Rights and obligations of partners and terms and conditions for share transfers are stipulated by the company charter. A Limited Liability Company is founded by joining the partners’ capital. The company’s existence does not depend on its members; therefore, the exit of a partner will not result in automatic liquidation. An LLC may be established by one or more individuals, legal entities or any combinations thereof.
Company partners exercise their management authority at the general meeting of partners. Competences of general meeting, procedures for carrying out decisions, responsibility and competences of directors and composition and functions of governing bodies are stipulated in the company charter.
Joint Stock Companies (JSC) are typically enterprises with large capital, although there are no legal requirements for it. In Georgia, some types of enterprises, such as banks and insurance companies, are legally obligated to hold this legal form. The authorized capital of a JSC is divided into shares of equal par value. A share is a bond confirming obligations of a joint-stock company before the partner (stockholder) and the stockholder’s rights in the company. Management bodies of a JSC include General Meeting, Supervisory Council, and Directors.