Buying an existing business in Georgia — what to check

An LLC is a legal entity (Law on Entrepreneurs, Article 2, point 4), so when you buy a share the company and its obligations stay — only the partner changes. A sole trader is not a legal entity and is personally liable with all their property (Article 2, point 5); there is no share, so buying a sole trader's business means separate deals for individual assets and rights.

Data in the registry is public: anyone can get an extract, and electronic copies of documents filed for registration are available free of charge on the registry's single electronic portal (Article 13, points 1 and 3).

What the registry extract shows

The extract is prepared from several registries and shows the information in force at the time it is prepared (Article 13, point 2):

• Data in the register of entrepreneurs — partners, director, legal address.
• Public-law restrictions.
• Tax liens or tax mortgages.
• Rights in movable property and intangible assets.
• Data in the register of debtors.

The charter and restrictions on transferring a share

The charter must state any restriction on shares agreed between the partners (Article 6, point 1(c)). As a general rule a partner may sell a share without the other partners' consent, but the charter can restrict this or make it subject to consent (Article 141, points 1 and 2). So the charter has to be read before signing.

How a share purchase is made

• The share transfer agreement is made in writing (Article 141, point 3); signatures are certified by a notary or at the registry, or signed electronically as the law provides (Article 12, point 5; Article 4, point 3).
• The selling partner must notify the company as soon as the agreement is signed (Article 141, point 4).
• Either the seller or the buyer may apply to register the share (Article 12, point 3).
• You become the owner of the share when the registry registers it in your name (Article 141, point 5).
• Preliminary registration of ownership of the share is also possible (Article 12, point 8).

Who is liable for obligations linked to the share

For obligations linked to the share that are unfulfilled at the time of the sale, the seller and the buyer are jointly liable to the company, unless the charter provides otherwise (Article 141, point 6).