I. About the Service
TB Legal offers Founding Agreement and Articles of Association drafting services in Georgia tailored to the ownership, management and decision-making structure of each business. A Founding Agreement in Georgia is one of the principal legal documents required for establishing a company, while the Articles of Association provide the corporate framework within which shareholders, directors and other corporate bodies operate.
Our service is designed for founders who want their corporate documents to reflect the actual commercial arrangement between the shareholders rather than relying solely on standard registration documentation. We assist with structuring shareholder rights, management powers, voting procedures, representation rules, transfer mechanisms and other governance matters relevant to the future operation of the company.
Under the Law of Georgia on Entrepreneurs, an entrepreneurial company is established on the basis of a founding agreement, which incorporates the company’s articles of association. Founders may use the standard articles applicable to the relevant legal form or prepare individual Articles of Association tailored to their business structure.
A professionally prepared Founding Agreement in Georgia is particularly important where the company has several shareholders, ownership interests are distributed differently, several directors will be appointed, specific voting arrangements are required or the founders wish to regulate important governance matters from the outset.
TB Legal’s service may include assessment of the proposed ownership and governance structure, preparation of the Founding Agreement, drafting of individual Articles of Association, regulation of shareholder rights, establishment of director and representation powers and legal support with the relevant registration procedure.
1. Scope of the Service
The precise scope depends on the company’s structure and the commercial arrangement between the founders. We may assist with the preparation of a new Founding Agreement in Georgia, review of existing incorporation documents, drafting or amendment of Articles of Association, structuring shareholder voting rights, defining director authority and establishing internal corporate approval mechanisms.
For an existing company, the service may also include preparing a new version of the Articles of Association where the ownership or management structure has changed or where the existing documentation no longer corresponds to the actual way in which the company operates.
2. When Tailored Articles of Association Are Appropriate
Standard Articles of Association may be sufficient for a simple company with one shareholder and a straightforward management structure. A tailored corporate framework becomes more important where several shareholders participate in the business, shareholders have different economic interests or functions, several directors are involved in management or additional protections are required for important decisions.
In such cases, a Founding Agreement in Georgia together with individually drafted Articles of Association can create a clearer legal framework and reduce the risk that fundamental governance issues are left to oral understandings or conflicting interpretations.
II. Legal Significance of a Founding Agreement in Georgia
A Founding Agreement in Georgia provides the legal basis for establishing an entrepreneurial company. It contains the information required by Georgian company law and incorporates the Articles of Association applicable to the company.
Depending on the chosen legal form, the founding documents identify the company, its shareholders, registered address, management and representation arrangements and other information required for registration.
For a limited liability company, the documentation should also properly reflect the ownership interests of the shareholders and other matters required for an LLC. The corporate documents should therefore correspond both to statutory requirements and to the actual ownership arrangement agreed between the founders.
TB Legal’s article on LLC Registration in Georgia provides a broader explanation of the company formation and Public Registry procedure. This specialised service focuses on the legal drafting of the documents themselves and on designing a corporate framework capable of supporting the company after registration.
1. Mandatory Corporate Information
A Founding Agreement in Georgia must correctly reflect the corporate information required by applicable law. Inaccurate, incomplete or inconsistent information may create registration issues and can also cause uncertainty regarding shareholder rights, management or representation after incorporation.
Particular attention should be given to the company name, registered address, shareholder identification, ownership interests, management body and rules of representation.
Where founders intend to use a more sophisticated governance or representation structure, the Founding Agreement and Articles of Association should be drafted consistently so that the various provisions operate as one coherent corporate system.
2. Form and Execution
A Founding Agreement in Georgia must be executed in the form required by Georgian legislation. The founders should determine in advance how the documents will be signed and whether any founder will act through an authorised representative.
This issue is particularly relevant for foreign founders who may not be physically present in Georgia during the incorporation process. The required documentation should be structured from the outset so that the signing and registration procedure can be completed efficiently.
III. Articles of Association in Georgia
The Articles of Association are a central document of the company’s internal governance structure. They regulate matters that affect the relationship between shareholders, the management body and the company.
Founders may rely on standard Articles of Association or prepare an individual document adapted to their particular business model. The appropriate choice depends on the number of shareholders, allocation of control, management structure and the complexity of the founders’ commercial arrangements.
A tailored Founding Agreement in Georgia allows the Articles of Association to be designed around the actual ownership and governance structure rather than around a general template.
1. Standard Articles of Association
Standard Articles of Association provide a practical framework for companies with simple ownership and management arrangements. They allow founders to establish a company without drafting extensive individual governance provisions.
This option may be appropriate for a single-shareholder LLC or another straightforward business structure where no special voting, transfer or management arrangements are required.
For companies with more complicated ownership arrangements, however, standard provisions may not fully address the commercial understanding between the shareholders.
2. Individual Articles of Association
Individual Articles of Association allow the founders to adapt the company’s internal rules to its actual business model.
They may regulate matters such as shareholder decision-making, voting thresholds, appointment and removal of directors, management procedures, representation, transfer of ownership interests, internal approvals and other corporate matters where individual structuring is legally permissible.
A properly drafted Founding Agreement in Georgia should ensure that these provisions form a coherent system rather than a collection of isolated clauses.
For a broader discussion of company governance and legal structuring, see TB Legal’s article on Legal Structuring of a Company in Georgia.
IV. Shareholder Interests and Ownership Structure
One of the central issues when preparing corporate documentation is the ownership structure of the company.
The founders should determine how ownership interests will be allocated, what economic and governance rights attach to those interests and how the ownership structure may change in the future.
A Founding Agreement in Georgia should accurately reflect the founders’ actual economic arrangement. Where shareholders contribute different amounts of capital, perform different functions or have different strategic roles in the business, the percentage allocation alone may not resolve every issue relevant to their relationship.
1. Ownership Interests and Contributions
Before the documents are finalised, the founders should clearly determine the proposed allocation of ownership interests and their obligations relating to contributions or financing.
It is important to distinguish between ownership participation, contribution obligations and any future financing commitments the shareholders may have agreed.
The Founding Agreement in Georgia should contain the information required for incorporation, while additional commercial arrangements may, where appropriate, be addressed in the Articles of Association or a separate shareholders’ agreement.
2. Admission of New Shareholders and Transfers
Multi-shareholder businesses should also consider what happens if one shareholder wishes to transfer an ownership interest or if the company intends to admit a new investor.
Depending on the desired corporate structure, the Articles of Association may provide mechanisms relating to prior consent, pre-emption or other shareholder protections to the extent permitted by applicable law.
The appropriate mechanism should be selected based on the ownership structure and the founders’ future investment plans.
V. Shareholder Decision-Making
A Founding Agreement in Georgia and the Articles of Association play an important role in establishing how shareholder decisions will be made.
The governance structure should make clear which matters are decided by the shareholders, which voting threshold applies and whether certain strategic matters require a higher level of approval.
For a simple company, statutory and standard rules may provide a sufficient framework. More complex businesses often need additional arrangements reflecting the commercial balance between the shareholders.
1. Reserved Matters
The Articles of Association may identify matters that require enhanced shareholder approval where this is appropriate and legally permissible.
Such matters may include significant asset transactions, major borrowing, changes to the nature of the business, transactions with related parties, establishment of subsidiaries, substantial investments or other strategically important decisions.
The purpose of such arrangements is to allocate corporate decision-making authority in advance. A Founding Agreement in Georgia should therefore be drafted so that reserved matters and ordinary management powers fit together logically.
2. Voting Thresholds
Voting thresholds should reflect the actual ownership structure of the company.
For example, a company owned equally by two shareholders may require a different governance model from a company where one shareholder holds a substantial majority interest and the other shareholder requires protection in relation to specific strategic decisions.
The appropriate structure should be designed before a dispute arises. Once shareholders are already in conflict, introducing an effective decision-making mechanism is considerably more difficult.
VI. Directors, Management Authority and Representation
The Articles of Association should also address the company’s management structure and the role of its directors.
A director manages the company’s activities and represents the company in dealings with third parties. For this reason, the Founding Agreement in Georgia should clearly identify the intended management and representation structure.
For a detailed overview of management authority, fiduciary duties and representation risks, see TB Legal’s article on the Company Director in Georgia.
1. Individual and Joint Representation
Where several directors are appointed, the founders should consider whether each director will be authorised to represent the company individually or whether certain representation powers will be exercised jointly.
The choice directly affects both the operational flexibility of the company and the degree of internal control.
A Founding Agreement in Georgia should correctly reflect the selected representation model, while the Articles of Association may provide additional rules concerning the functioning of the management body.
2. Internal Accountability of Directors
The Articles of Association may also contribute to a clearer relationship between shareholders and management.
Depending on the company’s structure, it may be appropriate to regulate reporting requirements, internal approvals for significant matters, information obligations and other governance mechanisms.
These provisions should be designed with an understanding of the distinction between internal corporate restrictions and the director’s external powers of representation.
VII. Founding Agreement in Georgia for Foreign Shareholders and Investors
The incorporation of a company with foreign shareholders may involve additional practical considerations relating to documents, representation and execution.
A Founding Agreement in Georgia involving foreign founders should be structured so that the ownership and governance arrangements are clear both for the Georgian registration process and for the foreign investor.
Where appropriate, bilingual corporate documentation may also be useful, particularly where management or shareholders are based outside Georgia.
1. Acting Through a Representative
A foreign founder may need to act through an authorised representative if the incorporation is completed without the founder being physically present in Georgia.
In such cases, the scope and form of the representative’s authority should be reviewed in advance so that the representative is properly authorised to execute the required corporate and registration documents.
This is especially relevant where the transaction involves several founders, foreign corporate shareholders or a broader international ownership structure.
2. Foreign Corporate Shareholders
Where a foreign legal entity becomes a shareholder of a Georgian company, its corporate identity and authority of representation should be properly documented.
The Founding Agreement in Georgia should identify the foreign shareholder consistently with the supporting corporate documents and the information required for registration.
The Georgian company’s governance model may also need to correspond to approval and reporting requirements imposed by its foreign parent or wider corporate group.
VIII. Public Registry and Company Registration
After the corporate documents have been prepared, they must comply with the requirements applicable to company registration before the National Agency of Public Registry.
The National Agency of Public Registry administers business registration in Georgia and provides official information and standard documentation relating to the registration process.
A Founding Agreement in Georgia, Articles of Association, shareholder information, director details and representation rules should be mutually consistent before the application is submitted.
1. Initial Company Registration
When a new company is established, the corporate structure can be designed before registration.
This creates an opportunity to address ownership, governance and management issues from the outset rather than modifying a standard structure shortly after incorporation.
TB Legal also provides broader legal support for Company Formation in Georgia, including incorporation, ownership structuring, director arrangements and post-registration corporate matters.
Preparation of a Founding Agreement in Georgia is a more focused service aimed specifically at ensuring that the founding documentation reflects the founders’ actual commercial and governance arrangements.
2. Amendment of Existing Articles of Association
Individual Articles of Association can also be prepared for an existing company.
Business growth, admission of a new investor, changes in shareholding, appointment of additional directors or a change in the management model may make the existing charter unsuitable.
In such cases, the current Articles of Association, shareholder resolutions and registered information should be reviewed together before a new version is adopted.
IX. Articles of Association and Shareholders’ Agreements
Articles of Association and a shareholders’ agreement do not necessarily serve the same function.
The Articles of Association form part of the company’s constitutional corporate framework. A shareholders’ agreement may provide a more detailed contractual framework governing commercial relations between shareholders.
When preparing a Founding Agreement in Georgia, it is therefore important to determine which provisions properly belong in the Articles of Association and which matters are better addressed in a separate shareholders’ agreement.
1. Commercial Arrangements Between Shareholders
Shareholders may wish to regulate additional funding, involvement in the business, management expectations, confidentiality, non-competition arrangements, transfer mechanisms, exit rights or other commercial matters.
The appropriate document should be selected based on the legal nature of the issue and the intended effect of the provision.
Not every commercial arrangement should automatically be inserted into the Articles of Association.
2. Consistency Between Corporate Documents
Where a company has tailored Articles of Association, a shareholders’ agreement, director policies and other internal corporate documents, these instruments should be reviewed as a single legal system.
Conflicting provisions can create uncertainty precisely when the company needs clarity most — for example during a shareholder dispute, investment round, financing transaction or legal due diligence process.
A professionally drafted Founding Agreement in Georgia should therefore be prepared with the broader corporate documentation in mind.
X. Our Drafting Process at TB Legal
TB Legal’s Corporate Law Services in Georgia include support with company formation, corporate governance, shareholder arrangements and the preparation of corporate documentation.
Our work on founding documents begins with understanding the founders’ commercial arrangement rather than immediately drafting a template.
1. Understanding the Ownership and Governance Model
The first stage is to identify the number of shareholders, proposed ownership interests, investment structure, number of directors, representation model and decision-making procedures required by the founders.
We also identify matters over which particular shareholders want additional protection or control.
On this basis, we assess whether standard Articles of Association are sufficient or whether an individually drafted Founding Agreement in Georgia and tailored Articles of Association would better protect the founders’ interests.
2. Drafting the Corporate Documents
The next stage involves preparing the Founding Agreement and individual Articles of Association.
The documents are structured so that ownership, shareholder rights, management powers, representation and voting arrangements operate consistently.
Particular attention is paid to the relationship between individual clauses. Voting rights, approval thresholds, director authority and transfer provisions should support the same overall governance model.
3. Review With the Founders
The draft documentation is then reviewed in light of the founders’ practical business expectations.
Corporate documents should be legally accurate while remaining understandable to the people who will actually use them.
For companies with several shareholders, we also consider how the proposed structure would function in practical scenarios, including disagreement between shareholders, transfer of ownership, admission of new investors and major corporate decisions.
4. Registration Support
Once the documents are finalised, TB Legal can also assist with the relevant registration procedure.
Where foreign shareholders are involved, we can coordinate the corporate documentation with representation arrangements and other documents required for the establishment of the Georgian company.
XI. Why Tailored Corporate Documents Matter
A standard charter is an effective solution for many straightforward businesses. As the ownership and governance structure becomes more complex, however, shareholders often require a corporate framework tailored to their specific arrangement.
A professionally drafted Founding Agreement in Georgia and individual Articles of Association can reduce uncertainty between shareholders, clarify the authority of directors, establish predictable decision-making procedures and create a stronger foundation for future investment and growth.
They are particularly important for multi-shareholder businesses, foreign-owned companies, joint ventures and businesses in which the shareholders wish to regulate governance and control mechanisms in advance.
Clear corporate documentation can also become important when an investor, lender or purchaser conducts legal due diligence. A consistent ownership and governance structure makes it easier to understand how the company is controlled, how major decisions are approved and whether the corporate records correspond to the actual operation of the business.
Where broader corporate advice is required, a Corporate Lawyer in Georgia can also assist with shareholder relations, director issues, ownership changes, restructuring and ongoing governance matters.
If you are establishing a new business, our Company Formation in Georgia service provides broader support with incorporation, ownership structuring, company registration and post-registration corporate arrangements.
If you require assistance with preparing a Founding Agreement in Georgia, individual Articles of Association or reviewing your company’s existing corporate documents, you can contact TB Legal for legal support. TB Legal advises local and international businesses on corporate structuring, shareholder arrangements, company documentation and the legal organisation of businesses operating in Georgia.
