---
title: "PIPE Transactions"
url: "https://legal.ge/en/service/banking-and-finance-law-en/pipe-transactions-en"
field: "Banking & Finance Law"
description: "PIPE transactions under the Law on Entrepreneurs: capital increase by a 3/4 vote, authorized capital, pre-emptive right limits. Legal.ge."
reviewed: "2026-02-10"
updated: "2026-10-15"
publisher: "legal.ge"
---

# PIPE Transactions

> Source: legal.ge, https://legal.ge/en/service/banking-and-finance-law-en/pipe-transactions-en

## PIPE Transactions under Georgian Law

A PIPE (Private Investment in Public Equity) in Georgian practice means the private, non-public placement of a joint-stock company’s new shares, regulated by the Law of Georgia on Entrepreneurs. Through this route the company increases its capital by issuing additional shares and placing them with a specific investor on negotiated terms. As in other jurisdictions, shareholders by default hold a pre-emptive right, whose use — or lawful limitation — is a decisive element of the transaction plan. Where the offer becomes a mass offer, the public-offering regime established by the securities legislation may also come into play, so the placement circle must be planned precisely from the outset.

The legal framework of a private placement clusters around three articles: the decision on a capital increase and the pay-up requirements for the shares, the instrument of authorized capital, and the shareholders’ pre-emptive right. Each demands its own sequence, and neglecting any of them creates the risk of the decision being challenged or the transaction stalled.

The full text is available on legal.ge after signing in: https://legal.ge/en/service/banking-and-finance-law-en/pipe-transactions-en

### What majority adopts a capital increase decision?

At least 3/4 of the votes of the participants in the vote, unless the charter provides otherwise.

### What is the term of an authorized-capital authorization?

At most 5 years; the new shares issued may not exceed 50 percent of the authorized shares.

### How many days do shareholders have for pre-emption?

At least 14 days from delivery of the notice or from publication.

### When does the pre-emptive right not apply?

To compensation shares (if not used as designated), to shares for a non-cash contribution, and to the renewed placement of repurchased own shares.