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Law of Georgia

Civil Code of Georgia

(excerpts)

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Article 25 – Capacity for rights of legal persons

1. A legal entity under public law may engage in an activity corresponding to the objectives provided in law or by its articles of association.

2. A legal entity under private law (entrepreneurial or non-entrepreneurial (non-commercial)) may engage in any activity not prohibited by law, regardless of whether or not this activity is provided for in its articles of association.

3. A legal person may engage in certain kinds of activities, the list of which is determined by law, only after obtaining a special license/permit or authorisation. The right of a legal person to engage in such activity shall arise from the moment the license/permit or authorisation is obtained.

4. The capacity for the rights of a legal person shall arise from the moment of its registration and shall cease to exist from the moment that the completion of its liquidation is registered.

5. A non-entrepreneurial (non-commercial) legal person may engage in an entrepreneurial activity of an auxiliary nature the profit from which shall be used for achieving the objectives of the non-entrepreneurial (non-commercial) legal person. The profit made from such activity may not be distributed to the founders, members, or donors of the non-entrepreneurial (non-commercial) legal person or to those having managerial and representative powers in such non-entrepreneurial (non-commercial) legal person.

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Law of Georgia No 3537 of 21 July 2010 – LHG I, No 47, 5.8.2010, Art. 304

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II - Non-entrepreneurial (Non-commercial) Legal Persons

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

 

Article 27 - Name of a non-entrepreneurial (non-commercial) legal person

1. A non-entrepreneurial (non-commercial) legal person shall have a name that includes the indication that it is a non-entrepreneurial (non-commercial) legal person.

2. The name of non-entrepreneurial (non-commercial) legal person may not include any graphic symbols that do not have any sound or verbal equivalent established by linguistic standards or the indications characteristic of the legal person or legal entity under public law specified by the Law of Georgia on Entrepreneurs and the Organic Law of Georgia on Political Associations of Citizens. The name may not include any addition that may mislead a third person and/or cause a mistake and/or misunderstanding of the form or activity of the entity.

3. The name of a non-entrepreneurial (non-commercial) legal person must not be the same as that of an already registered non-entrepreneurial (non-commercial) legal person.

4. A person who unlawfully uses the name of another legal person shall cease such use at the demand of the authorised person and compensate damages caused by such unlawful use.

5. In the case of defamation of the business reputation of a legal person, the rules of Article 18 of this Code shall apply.

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Law of Georgia No 5017 of 1 July 2011 – website, 14.7.2011

 

Article 28 - Procedure for the registration of non-entrepreneurial (non-commercial) legal persons and branches (representative offices) of foreign non-entrepreneurial (non-commercial) legal persons

1. Non-entrepreneurial (non-commercial) legal persons and branches (representative offices) of foreign non-entrepreneurial (non-commercial) legal persons shall be registered in the Register of Non-entrepreneurial (Non-commercial) Legal Entities.

2. The Register of Non-entrepreneurial (Non-commercial) Legal Entities is maintained by the Legal Entity under Public Law (LEPL) - National Agency of Public Registry of the Ministry of Justice of Georgia.

3. Non-entrepreneurial (non-commercial) legal persons and branches (representative offices) of foreign non-entrepreneurial (non-commercial) legal persons shall be registered according to the procedures contained in this Code as well as by the legislation of Georgia for registration of entrepreneurial entities and branches (representative offices) of foreign entrepreneurial legal persons.

Law of Georgia No 1902 of 28 December 2002 – LHG I, No 4, 22.1.2003, Art. 20

Law of Georgia No 179 of 24 June 2004 – LHG I, No 19, 15.7.2004, Art. 79

Law of Georgia No 3140 of 25 May 2006 – LHG I, No 18, 31.5.2006, Art. 134

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Law of Georgia No 1964 of 3 November 2009 – LHG I, No 35, 19.11.2009, Art. 253

Law of Georgia No 2458 of 25 December 2009 – LHG I, No 49, 30.12.2009, Art. 370

Law of Georgia No 2978 of 27 April 2010 – LHG I, No 24, 10.5.2010, Art. 144

Law of Georgia No 5017 of 1 July 2011 – website, 14.7.2011

 

Article 29 - Conditions for registration of non-entrepreneurial (non-commercial) legal persons

1. If the registration of a non-entrepreneurial (non-commercial) legal person is requested, the interested person shall submit to the registration authority the founders’/members’ agreement and an application containing the necessary details required under the Law of Georgia on Entrepreneurs for the registration of entrepreneurial legal persons.

2. If the registration of a non-entrepreneurial (non-commercial) legal person is requested, in addition to the data required by the first paragraph of this article, its articles of association shall contain:

a) the object of the activity of the non-entrepreneurial (non-commercial) legal person;

b) the procedures for admitting, withdrawing and excluding members of the non-entrepreneurial (non-commercial) legal person if it is a non-entrepreneurial (non-commercial) legal person based on membership;

c) name of the body (person) making a decision on reorganisation or liquidation and the decision-making procedure;

d) the procedures for creating (electing) and the tenure of the management body (managing person) of the non-entrepreneurial (non-commercial) legal person.

3. Other procedures for the registration of non-entrepreneurial (non-commercial) legal persons shall be regulated by the Law of Georgia on Entrepreneurs, Law of Georgia on Trade Unions and the Law of Georgia on Creative Workers and Creative Unions.

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Law of Georgia No 1964 of 3 November 2009 – LHG I, No 35, 19.11.2009, Art. 253

Law of Georgia No 2458 of 25 December 2009 – LHG I, No 49, 30.12.2009, Art. 370

Law of Georgia No 2978 of 27 April 2010 – LHG I, No 24, 10.5.2010, Art. 144

Law of Georgia No 5017 of 1 July 2011 – website, 14.7.2011

 

Article 30 - (Deleted)

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Law of Georgia No 1964 of 3 November 2009 – LHG I, No 35, 19.11.2009, Art. 253

Law of Georgia No 2458 of 25 December 2009 – LHG I, No 49, 30.12.2009, Art. 370

Law of Georgia No 2978 of 27 April 2010 – LHG I, No 24, 10.5.2010, Art. 144

Law of Georgia No 5017 of 1 July 2011 – website, 14.7.2011

 

Article 31 - Registration of changes made by non-entrepreneurial (non-commercial) legal persons and branches (representative offices) of foreign non-entrepreneurial (non-commercial) legal persons

1. The decision of an authorised person/body duly made and certified or the transaction made by authorised persons according to the procedures laid down by the legislation of Georgia shall serve as the basis for changing the registered records.

2. The changes made by non-entrepreneurial (non-commercial) legal persons and branches (representative offices) of foreign non-entrepreneurial (non-commercial) legal persons, which cause a change in their registration documents, shall require registration. A change shall be deemed to have been made from the moment the change is registered in the Register of Non-entrepreneurial (Non-commercial) Legal Entities.

3. Changes made in the registered records of non-entrepreneurial (non-commercial) legal persons/branches (representative offices) of foreign non-entrepreneurial (non-commercial) legal persons shall be registered according to the procedure laid down for the registration of entrepreneurial legal persons/branches (representative offices).

Law of Georgia No 179 of 24 June 2004 – LHG I, No 19, 15.7.2004, Art. 79

Law of Georgia No 3140 of 25 May 2006 – LHG I, No 18, 31.5.2006, Art. 134

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Law of Georgia No 1964 of 3 November 2009 – LHG I, No 35, 19.11.2009, Art. 253

Law of Georgia No 2458 of 25 December 2009 – LHG I, No 49, 30.12.2009, Art. 370

Law of Georgia No 2978 of 27 April 2010 – LHG I, No 24, 10.5.2010, Art. 144

Law of Georgia No 5017 of 1 July 2011 – website, 14.7.2011

 

Article 32 - Procedure for making decisions on the registration of non-entrepreneurial (non-commercial) legal persons and branches (representative offices) of foreign non-entrepreneurial (non-commercial) legal persons

1. On the matters defined by this Chapter and the matters falling within the scope of its authority, the registration authority shall make decisions required by the Law of Georgia on Public Registry for registration and access to information, as well as the decisions provided in Article 142 of the Law of Georgia on Entrepreneurs.

2. The procedure by which the registration authority cancels decisions on the registration of non-entrepreneurial (non-commercial) legal persons is defined in Article 142 of the Law of Georgia on Entrepreneurs.

3. If the registration of a non-entrepreneurial (non-commercial) legal person or of the branch (representative office) of a foreign non-entrepreneurial (non-commercial) legal person is requested, or when the alteration of the registered records is requested, the registration authority, except for the grounds defined by the legislation of Georgia for an entrepreneurial entity, shall make a decision on suspending the registration proceedings if:

a) the objectives of the non-entrepreneurial (non-commercial) legal person or of the branch (representative office) of the foreign non-entrepreneurial (non-commercial) legal person the registration of which is sought, contradict the applicable laws, recognised moral standards or the constitutional and legal principles of Georgia

b) there are conditions provided in Article 26(3) of the Constitution of Georgia.

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Law of Georgia No 1964 of 3 November 2009 – LHG I, No 35, 19.11.2009, Art. 253

Law of Georgia No 2458 of 25 December 2009 – LHG I, No 49, 30.12.2009, Art. 370

Law of Georgia No 2978 of 27 April 2010 – LHG I, No 24, 10.5.2010, Art. 144

Law of Georgia No 5017 of 1 July 2011 – website, 14.7.2011

 

Article 33 - State control over the activities of non-entrepreneurial (non-commercial) legal persons

1. A decision to suspend or prohibit the activity of non-entrepreneurial (non-commercial) legal persons shall be made by a court in the cases and in the manner provided by an organic law of Georgia.

2. If a non-entrepreneurial (non-commercial) legal person has substantively engaged in entrepreneurial activity, a court, based on the application from the registration authority and/or the interested person, shall consider and make a decision to suspend or prohibit the activity of the non-entrepreneurial (non-commercial) legal person.

3. After the court makes a decision to prohibit the activity of a non-entrepreneurial (non-commercial) legal person, the registration authority shall revoke the registration of the non-entrepreneurial (non-commercial) legal person.

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Law of Georgia No 1964 of 3 November 2009 – LHG I, No 35, 19.11.2009, Art. 253

 

Article 331 - (Deleted)

Law of Georgia No 5282 of 11 July 2007 – LHG I, No 30, 30.7.2007, Art. 346

Law of Georgia No 1964 of 3 November 2009 – LHG I, No 35, 19.11.2009, Art. 253

 

Article 34 - (Deleted)

Law of Georgia No 179 of 24 June 2004 – LHG I, No 19, 15.7.2004, Art. 79

Law of Georgia No 3140 of 25 May 2006 – LHG I, No 18, 31.5.2006, Art. 134

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Law of Georgia No 1964 of 3 November 2009 – LHG I, No 35, 19.11.2009, Art. 253

Law of Georgia No 2978 of 27 April 2010 – LHG I, No 24, 10.5.2010, Art. 144

Law of Georgia No 5017 of 1 July 2011 – website, 14.7.2011

 

Article 35 - Management and representation of non-entrepreneurial (non-commercial) legal persons

1. A founder/member of a non-entrepreneurial (non-commercial) legal person may grant exclusive right to one person to manage the activities of a non-entrepreneurial (non-commercial) legal person and/or may establish joint management and/or representation by two or more persons.

2. Managerial authority means making decisions on behalf of a non-entrepreneurial (non-commercial) legal person within the scope of its authority, and representative authority means acting on behalf of a non-entrepreneurial (non-commercial) legal person in relations with third parties. Unless otherwise determined by the registration documents, a managerial authority shall include representative authority.

3. The organisational structure of a non-entrepreneurial (non-commercial) legal person shall be regulated by its charter (founders’/members’ agreement) that shall be duly certified.

4. The rules laid down in Article 9 of the Law of Georgia on Entrepreneurs for persons authorised to represent entrepreneurial entities shall apply to the origination and termination of the managerial and representative authorities of a non-commercial legal person.

Law of Georgia No 179 of 24 June 2004 – LHG I, No 19, 15.7.2004, Art. 79

Law of Georgia No 617 of 26 November 2004 – LHG I, No 36, 8.12.2004, Art. 168

Law of Georgia No 1051 of 25 February 2005 – LHG I, No 9, 17.3.2005, Art. 59

Law of Georgia No 3140 of 25 May 2006 – LHG I, No 18, 31.5.2006, Art. 134

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Law of Georgia No 1964 of 3 November 2009 – LHG I, No 35, 19.11.2009, Art. 253

Law of Georgia No 2978 of 27 April 2010 – LHG I, No 24, 10.5.2010, Art. 144

Law of Georgia No 5017 of 1 July 2011 – website, 14.7.2011

 

Article 36 - Transfer of assets owned by non-entrepreneurial (non-commercial) legal persons

The assets owned by a non-entrepreneurial (non-commercial) legal person may be transferred if the transfer serves the activity of the non-entrepreneurial (non-commercial) legal person, its organisational development, promotes the achievement of its objectives or serves charitable purposes.

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

 

Article 37 - Compensation for damage

1. A non-entrepreneurial (non-commercial) legal person shall be liable for damages incurred to third parties as a result of an action performed by a person(s) with managerial and representative authorities in the course of his/her duties, which gives rise to the obligation to pay damages.

2. The person(s) vested with managerial and representative authority shall run the affairs in good faith. In case of nonfulfillment of the duties, he/she shall be accountable to the non-entrepreneurial (non-commercial) legal person for damages incurred. Waiver of a claim for damages shall be void if it is necessary to satisfy the claims of third parties.

3. A non-entrepreneurial (non-commercial) legal person shall be independent from the status of its member(s) or from that of its manager(s) and representative(s). The liability of the non-entrepreneurial (non-commercial) legal person shall be limited to its property. The members of a non-entrepreneurial (non-commercial) legal person or its manager(s) and representative(s) shall not be liable for the obligations of the non-entrepreneurial (non-commercial) legal person. Nor shall the non-entrepreneurial (non-commercial) legal person be liable for the obligations of its members or person(s) with managerial and representative authorities.

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

 

Article 38 - Reorganisation of non-entrepreneurial (non-commercial) legal persons

1. The legal form of a non-entrepreneurial (non-commercial) legal person may not be changed, except when a change in its legal form transforms the non-entrepreneurial (non-commercial) legal person into a legal entity under public law.

11. A non-entrepreneurial (non-commercial) legal person shall be divided (by demerger, separation), combined (by merger, acquisition) and liquidated according to the procedures contained in the legislation of Georgia for liquidation/reorganisation of entrepreneurial entities.

2. Founders/members of a non-entrepreneurial (non-commercial) legal person shall determine the person entitled to receive the assets remaining after the liquidation of a non-entrepreneurial (non-commercial) legal person in the application for registration. When the non-entrepreneurial (non-commercial) legal person is liquidated, its assets may be transferred if:

a) the transfer promotes the achievement of its objectives;

b) the transfer serves charitable purposes;

c) the property is transferred to another non-entrepreneurial (non-commercial) legal person.

3. The assets remaining after the liquidation of a non-entrepreneurial (non-commercial) legal person may not be distributed to its founders/members or persons with managerial and representative authorities.

4. If the founders/members of a non-entrepreneurial (non-commercial) legal person do not identify the person entitled to receive the assets remaining after its liquidation, a court shall transfer the assets remaining after the liquidation of the non-entrepreneurial (non-commercial) legal person to one or several non-entrepreneurial (non-commercial) legal entities with the same or similar objectives as those of the liquidated non-entrepreneurial (non-commercial) legal person. If no such legal persons exist or can be found, a decision may be made on transferring the assets to the State. The court may distribute the assets after six months from the registration of the commencement of the liquidation proceedings.

5. Based on a final judgement of conviction in a criminal case, the liquidator(s) appointed by the court shall carry out the liquidation of a non-entrepreneurial (non-commercial) legal person. Liquidation and reorganisation procedures may not be initiated against a non-entrepreneurial (non-commercial) legal person from the moment of initiation of criminal proceedings until the entry into force of a judgement of conviction or until the termination of criminal proceedings.

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Law of Georgia No 1964 of 3 November 2009 – LHG I, No 35, 19.11.2009, Art. 253

Law of Georgia No 2978 of 27 April 2010 – LHG I, No 24, 10.5.2010, Art. 144

Law of Georgia No 5017 of 1 July 2011 – website, 14.7.2011

Law of Georgia No 651 of 30 May 2013 – website, 12.6.2013

 

Article 381 - (Deleted)

Law of Georgia No 1964 of 3 November 2009 – LHG I, No 35, 19.11.2009, Art. 253

Law of Georgia No 2978 of 27 April 2010 – LHG I, No 24, 10.5.2010, Art. 144

Law of Georgia No 5017 of 1 July 2011 – website, 14.7.2011

 

Article 39 - Non-registered unions (associations)

1. The matters related to the organisation and structure of a non-registered union (association) shall be determined by a mutual agreement of its members. A non-registered union (association) shall not be considered a legal person.

2. The membership dues paid by members and the assets acquired with those dues make up the common property of a non-registered union (association).

3. A non-registered union (association) may be represented by its members or duly authorised persons in court or in out-of-court relations.

4. Creditors’ claims may be fulfilled from the common property of a non-registered union (association). At the same time, the persons who acted on behalf of the non-registered union (association) shall also be liable as debtors both individually and jointly.

Law of Georgia No 179 of 24 June 2004 – LHG I, No 19, 15.7.2004, Art. 79

Law of Georgia No 3140 of 25 May 2006 – LHG I, No 18, 31.5.2006, Art. 134

Law of Georgia No 3536 of 25 July 2006 – LHG I, No 37, 7.8.2006, Art. 277

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

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Article 1509 - Legal entities under private and public law

1. The following shall be regarded as legal entities under public law defined by the Civil Code:

a) the State

b) self-government units

c) legal persons created by the State on the basis of legislation or an administrative act, which are not established in an organisational-legal form defined by the Civil Code or by the Law on Entrepreneurs

d) state institutions and state foundations that are not created under the Civil Code or the Law on Entrepreneurs

e) non-governmental organisations created on the basis of legislation for accomplishment of public objectives (political parties, etc.)

f) the Legal Entity under Public Law (LEPL) – Georgian Apostolic Autocephalous Orthodox Church recognised under the Constitutional Concordat of Georgia

g) religious associations provided in Article 15091 of this Code.

2. The following shall be regarded as legal entities under private law:

a) non-entrepreneurial (non-commercial) legal entities

b) (deleted)

c) general partnerships

d) limited partnerships

e) limited liability companies

f) joint-stock companies

g) cooperatives.

Law of Georgia No 1807 of 19 February 1999 – LHG I, No 6(13), 4.3.1999, Art. 24

Law of Georgia No 1233 of 6 April 2005 – LHG I, No 18, 27.4.2005, Art. 110

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 18, 22.12.2006, Art. 336

Law of Georgia No 5034 of 5 July 2011 – website, 6.7.2011

 

Article 15091 - Procedure for registration of religious associations

1. Religious associations may be registered as legal entities under public law.

2. The first paragraph of this article shall not limit the right of religious associations to be registered as non-entrepreneurial (non-commercial) legal entities provided in this Code, also to conduct the business as non-registered unions provided in this Code.

3. The Legal Entity under Public Law (LEPL) – National Agency of Public Registry within the Ministry for Justice of Georgia shall conduct the registration of religious associations.

4. The Legal Entity under Public Law (LEPL) – National Agency of Public Registry within the Ministry for Justice of Georgia may register as a legal entity under public law a religious denomination having a historical link with Georgia or a religious denomination recognised as a religion by the legislation of the member states of the Council of Europe.

5. The Law of Georgia on Legal Entities under Public Law shall not apply to a religious association registered as a legal entity under public law.

6. The procedures prescribed for the registration of non-entrepreneurial (non-commercial) legal entities shall apply to the registration of the religious associations provided in this article and their rights shall be defined by Chapter Two of Section One of this Code.

Law of Georgia No 5034 of 5 July 2011 – website, 6.7.2011

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