Foundation formation in Georgia is a significant legal step for those wishing to mobilize assets, expertise, or resources to achieve specific social, charitable, or investment goals. Georgian legislation offers flexible opportunities to create such foundations in the form of a Non-Entrepreneurial (Non-Commercial) Legal Entity (NNLE), focused on long-term development and project financing. A foundation, as an organizational structure, differs from membership-based organizations (associations) in that it is often based on specific property or capital dedicated by founders to fulfill statutory objectives. These can be educational, cultural, social, or innovation-promoting foundations operating as independent legal entities.
Registering a foundation in Georgia requires precise legal planning, especially regarding the governance structure and asset management rules. A well-drafted charter and internal regulations ensure the foundation's transparency and efficiency.
What does the Foundation Formation service cover?
The foundation formation service provided by specialists on Legal.ge includes full legal support from idea conception to final registration. This process is complex and combines several key components:
- Selection of legal form and consultation: Determining the optimal structure based on the client's goals. While the NNLE form is mostly used, it is important to determine whether the foundation will have the right to conduct economic activities of an auxiliary nature.
- Drafting the Charter (Statutes): This is the foundation's main document. Specialists develop an individual charter outlining the foundation's goals, powers of governing bodies (Board, Director, Board of Trustees), rules for asset disposal, and conditions for termination of activities.
- Formation of governance structure: Sound management is critical for foundations. The service includes legal formalization of governing body appointments and development of conflict of interest prevention mechanisms.
- Preparation of registration documentation: Preparing the application, minutes of founders' meetings, and consent letters for submission to the National Agency of Public Registry.
- Tax registration: After registering the organization, registering it with the Revenue Service and selecting the appropriate tax regime.
- Banking and administrative support: Consultation on opening a bank account and navigating initial administrative procedures.
When is this service needed? (Practical scenarios)
Foundation formation is relevant in various scenarios where the focus is on resource management and fulfilling a specific mission:
- Creating a grant-giving organization: When international donors or private patrons want to create a structure that issues grants to fund local initiatives.
- Family or corporate foundation: A business company or wealthy family establishes a foundation within the framework of Corporate Social Responsibility (CSR) to carry out charitable or educational projects.
- Innovation and startup support foundation: A group establishes a foundation aimed at promoting technological development, funding hackathons, and providing educational programs.
- Cultural heritage protection foundation: An organization is created to restore a specific historical monument or fund cultural festivals, attracting and managing donations.
- Scholarship fund: A foundation created for educational purposes that collects funds to finance tuition for talented students.
Georgian Legislation and Regulations
Foundation formation and operation in Georgia are regulated by several key legislative acts. The main legal basis is the Civil Code of Georgia, which defines the general rules for the creation, management, and liquidation of non-entrepreneurial (non-commercial) legal entities. The Code establishes that a foundation (as an NNLE) is an independent legal entity whose property is separate from the founders' property.
The procedural part of registration is regulated by the Law of Georgia on Entrepreneurs, which, despite its name, also applies to the registration rules for non-entrepreneurial legal entities in the Public Registry. Tax obligations and exemptions are outlined in the Tax Code of Georgia, which defines tax regimes for grants, donations, and income from economic activities. If the foundation plans to issue grants, the Law of Georgia on Grants is also relevant.
The process with a Legal.ge specialist
The foundation formation process through the Legal.ge platform is simple and organized. Initially, you contact a selected lawyer and discuss the foundation's goals. The specialist will prepare a detailed consultation on the necessary structure. The next stage involves document preparation — drafting the charter, formalizing minutes of founders' meetings, and filling out the application.
The lawyer ensures the submission of documents to the Public Service Hall (Public Registry) and monitors the registration process. Upon completion of registration, the specialist will provide you with the extract from the registry and assist with registration on the tax portal. This eliminates bureaucratic errors and ensures that the foundation begins operations with full legal compliance.
Why choose Legal.ge?
Legal.ge is a unique platform giving you access to experienced lawyers practicing in Georgia who have years of experience in establishing foundations and non-governmental organizations. Here you can find specialists who will not only register the organization but also provide strategic advice on governance models and tax optimization. Find your trusted partner on Legal.ge and start your activities on a solid legal foundation.
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