The Legal Nature of a Representative Office
For a business registered abroad, opening a presence in Georgia most often begins with the registration of a branch of the entrepreneur. Under article 15 of the Law of Georgia on Entrepreneurs, an entrepreneur may establish a branch, but the branch is not a legal entity: it is a subdivision of the entrepreneur, and its legal fate depends entirely on the founding entrepreneur. The same principle yields the rule that a branch of an entrepreneur registered in Georgia is not registered, whereas a branch of an entrepreneur registered abroad requires registration in Georgia. The law separately regulates the situations connected with free industrial zones: an entrepreneur registered in a free industrial zone may establish a branch outside the zone in the manner established by the law, and, conversely, an entrepreneur registered outside the zone may establish a branch within a free industrial zone.
The Registration Application and Accompanying Documents
All documents required for the registration of a branch of an entrepreneur registered abroad must be submitted to the registering organ in a form certified according to the legislation of Georgia. The application must contain the firm name of the entrepreneur, its legal address, the main place of business, the legal form and the country whose legislation applies to the registration, as well as the name of the organ of the foreign country with which the entrepreneur is registered and the registration number, where such registration exists. The application must further indicate the firm name of the branch — the entrepreneur's name with the addition of the word indicating a branch, or a firm name different from that of the entrepreneur — the legal address of the branch, the identification data of its head and the scope of his representative authority, the object of activity and, where applicable, the amount of the placed capital. The application must be accompanied by the certified document confirming the registration of the entrepreneur, the founding documents and the charter, the document establishing the identity and powers of the person authorised to manage and represent the company, the decision on the establishment of the branch, and the consent of the person to be appointed as head of the branch.
Obligations after Registration
Registration is only the beginning. A branch of a joint-stock company or a limited liability company must publish or place on the website the financial report of the entrepreneur that has been prepared, audited and published in accordance with the legislation of the country of registration. The person authorised to manage the branch must notify the registering organ of any change in the data required for registration, of the closure of the branch, of the dissolution of the entrepreneur, of the commencement and completion of its liquidation procedure, of the identity of liquidators and the expiry of their authority, of the opening and completion of insolvency proceedings and of the annulment of the entrepreneur's registration. Ultimately, the existence of the branch terminates with the cessation of the entrepreneur's existence: the branch cannot continue an independent life. Compliance with these notification duties prevents discrepancies between the registry and reality that otherwise surface in transactions, banking or inspections.
Business Letters, Website and Changes of Registered Data
Article 17 of the law requires that every business letter of a limited liability company or a joint-stock company indicate the firm name, the legal address and the identification number; where capital is indicated on a business letter, the data must concern the placed capital and the paid-up part of it. On the business letters of a branch of a foreign company, the registering organ and the registration number of the branch must additionally be indicated. A company in liquidation or in insolvency proceedings must reflect that circumstance by a special addition on its letters. All these data must also be placed on the website of the company, where one exists, and the rule applies to business letters both in material and in electronic form; for a breach, the administrative liability of the person authorised to manage is determined by the legislation of Georgia. Changes of registered data, under article 12 of the law, are recorded in the registry on the basis of an application of the person authorised to manage and represent the company, unless the charter or the transaction submitted as the basis of the change provides otherwise.
Frequently Asked Questions
Is a branch a legal entity?
No. A branch of an entrepreneur is not a legal entity — it is a subdivision of the entrepreneur, its existence terminates together with the entrepreneur, and its powers derive from the founder.
Does a branch of a Georgian entrepreneur require registration?
No. A branch of an entrepreneur registered in Georgia is not registered; registration is required only for a branch of an entrepreneur registered abroad.
Which documents accompany the branch registration application?
The certified registration document, the founding documents and the charter, the document establishing the representative authority, the decision on the establishment of the branch and the consent of the person to be appointed as head of the branch.
What must appear on the business letters of a branch?
The firm name, the legal address and the identification number; in the case of a branch of a foreign company, also the registering organ and the registration number of the branch; the same data must be placed on the website.
How We Help on Legal.ge
If you plan to open a branch or representative office in Georgia, the team of Legal.ge will help you build perfect documentation under the requirements of the law: we will prepare the registration application, plan the certification of foreign documents, define the powers of the head and the representative structure of the office, and provide you with a complete guide to the subsequent obligations — publication of reports, registration of changes and the rules for business letters. Contact us and we will begin.