Buying an LLC share in Georgia — what to check

Under Article 141 of the Law on Entrepreneurs, a partner may sell a share without the other partners' consent unless the charter says otherwise. The transfer agreement must be in writing, and the company must be notified straight away.

The transfer takes effect when the new partner is registered. For contributions still unpaid at the time of sale, the seller and buyer are jointly liable to the company.

Check before you buy

• The charter — whether it restricts share transfers
• A registry extract — partners, director, any seizure or pledge on the share
• Tax debts and reporting
• Court disputes and enforcement
• Key contracts and licences
• Employees and labour disputes

What it must include

• Size of the share and price
• Payment terms — ideally in stages, tied to registration
• The seller's warranties — on debts, disputes and taxes
• Compensation if a warranty proves untrue
• A non-compete for the seller
• Registration deadline and costs

Partners' agreement

If several partners remain, settle in a separate agreement how decisions are made, dividends, new share issues, exit and selling to third parties. The law recognises such agreements (Article 149).

Tax

Profit from selling a share may be taxed. Assess the tax before the deal — especially if the seller or buyer is a foreigner.

Will a template do?

A template is written for a general case and doesn't reflect your risks — often it lacks exactly the clause you'll need in a dispute. It's better to fit the contract to your deal. We draft the contract or review the other side's text before you sign.