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GeorgiaHB 11852025-2026 Regular SessionHouse

Courts; certain shareholder claims to be brought before the Georgia State-wide Business Court; provide

Sponsored By: Chuck Efstration (Republican), Matthew Gambill (Republican), Stan Gunter (Republican), Rob Leverett (Republican), Devan Seabaugh (Republican), Will Wade (Republican)

Signed by Governor

JudiciaryGeneral Bill

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Bill Overview

Analyzed Economic Effects

8 provisions identified: 2 benefits, 3 costs, 3 mixed.

Small investors face lawsuit ownership thresholds

For suits started on or after July 1, 2026, publicly listed corporations can set ownership thresholds in their articles or bylaws. The thresholds apply to shareholders suing on the corporation’s behalf and cannot exceed 1% of the specified outstanding shares. Publicly listed limited partnerships can set a threshold in their governing agreement, capped at 1% of outstanding interests. Investors must have held the required amount when the challenged act or omission occurred. The law does not require every listed entity to adopt a 1% threshold.

Investors gain access to business records

Beginning July 1, 2026, limited partners can inspect filed federal, state, and local income tax returns for each year. Limited liability company members can obtain those returns and true, complete financial statements on reasonable demand. Other information must be just and reasonable, and requested for a proper purpose. Corporate inspection rights also cover beneficial owners whose shares are held in a voting trust or by a nominee.

Directors gain broader business decision powers

Beginning July 1, 2026, Georgia corporations can authorize broader factors in directors’ decisions through their articles of incorporation. Directors can consider workers, customers, suppliers, creditors, communities, and other relevant factors when deciding the corporation’s best interests. This authority is optional for directors. It gives those groups no right to demand that directors consider their interests.

Investor lawsuits face expense recovery limits

These expense rules apply to proceedings started on or after July 1, 2026. In suits brought for a corporation, extra or amended shareholder disclosures do not count as a substantial benefit for expense awards. In limited partnership suits, plaintiffs cannot recover expenses or lawyer fees when changed disclosures are the only relief, regardless of importance. For corporations formed outside Georgia, Georgia law controls plaintiff liability for defendants’ reasonable expenses in suits brought without reasonable cause or for an improper purpose. Georgia law also replaces the formation jurisdiction’s law for the covered expense rule in suits brought for foreign limited liability companies.

Investor record requests face legal limits

For proceedings started on or after July 1, 2026, certain lawsuits do not qualify as proper reasons to seek business records. This covers active or pending suits brought for the entity that the requester brings or is reasonably expected to bring. It also covers active or pending civil suits where the requester and entity are, or are reasonably expected to be, opposing named parties. A limited partner or company member can face the entity’s costs and reasonable lawyer fees after an inspection denial. The court must find the request was not just, reasonable, or made for a proper purpose.

Business disputes gain specialized court options

For cases started on or after July 1, 2026, the Georgia State-wide Business Court has expanded authority over internal business disputes. Corporations can require that court in their articles or bylaws, including for shareholder claims challenging disclosures. The court cannot reject transfers or send covered claims elsewhere when governing documents require that forum or the entity qualifies. Qualifying entities include public companies, businesses making Regulation A Tier 2 offerings or Regulation D securities sales, and entities owned entirely by accredited investors. The law also names Business Court alongside superior court for share-purchase, close-corporation shareholder-relief, records-inspection, and business-valuation proceedings.

Business litigants face new transfer deadlines

These deadlines apply to eligible cases started on or after July 1, 2026. When all parties agree, they have one year after filing to move a case to Business Court, up from 60 days. A party has 90 days, up from 60, to request transfer based on the initial claim. That clock starts when all defendants receive the initial pleading through service of process. Other parties have 15 days to object, down from 30.

Companies can limit officers’ damage payments

Beginning July 1, 2026, Georgia corporations can limit officers’ personal money damages through their articles of incorporation. The limits apply to damages owed to the corporation or its shareholders. They cannot cover stolen business opportunities, intentional misconduct, knowing legal violations, specified statutory liabilities, or improper personal benefits. A limit also cannot protect acts or omissions that happened before that limit took effect. This protects officers but can reduce shareholders’ damage recovery.

Sponsors & Cosponsors

Sponsors

  • Chuck Efstration

    Republican • House

  • Matthew Gambill

    Republican • House

  • Stan Gunter

    Republican • House

  • Rob Leverett

    Republican • House

  • Devan Seabaugh

    Republican • House

  • Will Wade

    Republican • House

Cosponsors

  • Bo Hatchett

    Republican • Senate

Roll Call Votes

All Roll Calls

Yes: 324 • No: 200

House vote • 3/31/2026

Agree to Senate Amendment

Yes: 97 • No: 65 • Other: 10

Senate vote • 3/27/2026

ADOPTION OF AMENDMENT #4 BY THE SENATOR FROM THE 19TH

Yes: 37 • No: 9 • Other: 5

Senate vote • 3/27/2026

PASSAGE AS AMENDED

Yes: 45 • No: 2 • Other: 4

Senate vote • 3/25/2026

MOTION TO TABLE

Yes: 27 • No: 23 • Other: 3

Senate vote • 3/25/2026

MOTION TO RESOLVE DEBATE

Yes: 14 • No: 35 • Other: 4

House vote • 2/25/2026

PASSAGE

Yes: 104 • No: 66 • Other: 4

Actions Timeline

  1. Effective Date

    7/1/2026

  2. House Date Signed by Governor

    5/11/2026House

  3. Act 460

    5/11/2026

  4. House Sent to Governor

    4/10/2026House

  5. House Agreed Senate Amend or Sub

    3/31/2026House

  6. Senate Taken from Table

    3/27/2026Senate

  7. Senate Passed/Adopted As Amended

    3/27/2026Senate

  8. Senate Third Read

    3/25/2026Senate

  9. Senate Tabled

    3/25/2026Senate

  10. Senate Read Second Time

    3/23/2026Senate

  11. Senate Committee Favorably Reported

    3/20/2026Senate

  12. Senate Read and Referred

    2/26/2026Senate

  13. House Third Readers

    2/25/2026House

  14. House Passed/Adopted

    2/25/2026House

  15. House Committee Favorably Reported

    2/19/2026House

  16. House Second Readers

    2/6/2026House

  17. House First Readers

    2/5/2026House

  18. House Hopper

    2/4/2026House

Bill Text

  • HB 1185/AP* (v11)

    PDF

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