License Audit Preparation — What the Issuer Checks
The fulfilment of license conditions by the licensee is controlled by the license issuer, unless this function is assigned by legislation to another administrative body. The Law on Licenses and Permits defines this control precisely, and preparing for a license audit means knowing these rules in advance: how a check is carried out, with what frequency, what must be prepared in the report, and where the results are kept.
An important guarantee of the law is the limitation of control to two forms: the issuer exercises control only through the selective verification of the fulfilment of license conditions and or through the regular reporting of the licensee. Monitoring of another kind — for instance, demanding facts not directly connected with the license conditions — is beyond the issuer's powers: it has no right to verify or demand the presentation of factual circumstances not directly connected with the observance of the license conditions.
Annual Reporting — from 1 April to 1 May
Unless otherwise provided by law, the licensee carries out, annually from 1 April to 1 May, reporting on the observance of the license conditions, which is done by written submission to the issuer. There is an exception: a licensee that receives the license within 6 months before the start of the reporting period is not obliged to submit the report.
Where the fact of observance of the license conditions is not clearly declared in the submitted report or is not indicated at all, the issuer is entitled to request, within a reasonable period, information confirming fulfilment. Non compliance with this request is a ground for imposing liability — the report is thus not a formality to be somehow passed over: a defect in it leads directly to a sanction.
Selective Verification — Rules and Frequency
The issuer's decision to conduct a selective verification is an administrative act which must be presented to the licensee during the verification. By decision of the issuer, representatives of another administrative body may participate in the verification. After its completion an act of verification is drawn up, which is entered into a registry specially maintained for this purpose.
The frequency is also defined: unless otherwise provided by law, the issuer may carry out the control only once within a calendar year. An exception concerns the activities provided for by the corresponding items of the law: the issuer of a license for such activities has the right to carry out the control only three times within a calendar year, and from 1 September 2026 this rule extends to a wider circle of activities. For the licensee this creates a planning horizon: checks are limited in number and predictable in form.
Sectoral Registries and Electronic Means
The results of control and the entire recording of licenses are held in the sectoral license and permit registry, which is kept by the license or permit issuer. The law empowers the issuing body to use unified automatic management tools: it may receive, issue or grant any information or document connected with the license, including the license certificate or its duplicate, electronically, and may keep the registry in the same way.
The storage of documents is modern as well: the issuing body is entitled to store and issue in the form of an electronic copy any document created by it or kept with it, and data in certificates and in the registry may be entered by mechanical or electronic means. For the licensee this means that its own archive should also be in order in electronic format — the quick retrieval of materials during an audit is half the battle.
How to Prepare for the Audit — Practical Steps
First, keep the reporting calendar: the window from 1 April to 1 May will not be corrected for a missed report. Second, declare clearly: the fact of observance of the license conditions must be clearly indicated in the report, because vagueness triggers an additional request. Third, prepare confirming materials for each condition: technical, personnel and financial documentation in a format that can be found with one hand during a selective verification.
Fourth, know your rights: control is permitted only over the license conditions and only once a year (or three times in defined cases); the act of verification is entered into the registry, and holding a copy of it is in your interest. Observing these five rules turns an audit from a stress into a routine procedure.
Frequently Asked Questions
Below are the most frequent questions about licence audits.
How and when is reporting on licence conditions done?
Annually, from 1 April to 1 May, in writing to the issuer; a holder who receives the licence within 6 months before the reporting period is exempt.
How many selective inspections are possible per year?
As a rule, once per calendar year; for activities specified by law — only three times; the inspection decision is an administrative act presented to the holder.
May the issuer demand unrelated information?
No — the issuer may not verify or demand facts not directly connected with compliance with the licence conditions.
Where are control results kept?
The inspection act is entered in the issuer’s special register; the register may be kept by unified automatic means, including electronic storage and issuance.
How We Help on Legal.ge
The lawyers of Legal.ge will prepare you for the audit: we will build a compliance map for each licence condition, fix the reporting calendar and help answer the issuer’s demands. Contact us before the reporting window opens.