Voluntary liquidation of an LLC: what to do under Georgian law

What to do

1. Decision: dissolution of an LLC requires 3/4 of the votes of participating partners (Law of Georgia on Entrepreneurs, Art. 78). A sole partner decides by written resolution (Law on Entrepreneurs, Art. 20). The director registers the dissolution in the registry (Law on Entrepreneurs, Art. 78).
2. Liquidators: the liquidators are the directors, unless the articles of association or the meeting appoint others (Law on Entrepreneurs, Art. 83). The requirements are the same as for a director (Law on Entrepreneurs, Art. 83). A liquidator may be a natural or legal person; citizenship is not required (Law on Entrepreneurs, Art. 124). The liquidator is registered in the registry (specimen signature; consent of a liquidator who is not a director) (Law on Entrepreneurs, Art. 83). The signature is certified by a notary, at the Public Service Hall or with an electronic signature (Law on Entrepreneurs, Art. 4). The director's powers terminate upon registration of the liquidators (Law on Entrepreneurs, Art. 81).
3. Taxes: within 5 working days, notify the tax authority and file a return (Tax Code of Georgia, Art. 153). The registry itself requests information from the Revenue Service; the reply takes 10 working days (Law on Entrepreneurs, Art. 82). The check takes up to 90 days and may be extended once, to 2 months (Law on Entrepreneurs, Art. 82). Silence means there is no debt (Law on Entrepreneurs, Art. 82).
4. Deadline: liquidation must be completed no later than 4 months from its start (Law on Entrepreneurs, Art. 88). If the check is extended, liquidation must be completed 1 month after its result (Law on Entrepreneurs, Art. 88).
5. Creditors: an announcement to creditors must be made immediately on the registry portal or on the company's own website (Law on Entrepreneurs, Art. 82). Partners may receive distributions only after debts are repaid and 5 months after the announcement (Law on Entrepreneurs, Art. 86). After 3 months, distribution is possible by court decision with an auditor's opinion (Law on Entrepreneurs, Art. 86).
6. Closure: the remainder is distributed in proportion to shares (Law on Entrepreneurs, Art. 85). A payment within the contribution amount is undistributed profit (Tax Code, Art. 98¹). The liquidators file an application, and the registry cancels the registration (Law on Entrepreneurs, Art. 88). If the partners change their minds, the decision may be reversed by 3/4 of the votes, as long as distribution of property has not begun (Law on Entrepreneurs, Art. 87).
7. Where to apply: NAPR; Revenue Service; court.
8. Evidence: articles of association, extract from the registry, dissolution decision, liquidator's consent, balance sheet.
9. Pitfalls: a “liquidation commission” and the “Herald” (Vestnik) are not Georgian institutions; distributing property before settling with creditors; waiting for a certificate of no debts, when the registry itself requests information from the Revenue Service; if assets are insufficient to cover debts, this is insolvency.

Be sure to check

• dissolution of the LLC is decided by 3/4 of the votes (sole partner: by written resolution) and registered in the Registry of Entrepreneurs (NAPR)
• liquidators are the directors by default; a liquidator may be a person abroad; the signature is certified by a notary, at the Public Service Hall or with an electronic signature
• taxes: notification and return within 5 working days; the registry requests information from the Revenue Service itself; the check takes up to 90 days
• liquidation must be completed within 4 months (if the check is extended, 1 month after it); property may be distributed to partners only after debts are paid
• at the end, the liquidators file an application and the registry cancels the LLC's registration