HB 1185: Courts; certain shareholder claims to be brought before the Georgia State-wide Business Court; provide

Georgia created a State-wide Business Court to handle complex business disputes. This bill expands what can go there and changes how cases get transferred in. It creates a new legal term, "internal entity claim," covering shareholder derivative suits, disputes over a director's or officer's duties, records-inspection fights, and valuation proceedings. Corporations, LLCs, and limited partnerships could write their bylaws, articles of incorporation, or operating agreements to require these internal claims to be filed only in the Business Court, and certain public or investor-heavy companies would automatically qualify for that court regardless of what their governing documents say. The bill also raises the bar for shareholders to sue on a company's behalf, letting companies with publicly traded shares set an ownership threshold (up to 1 percent of shares) before someone can bring a derivative lawsuit. It limits when courts must award attorneys' fees, for example saying that extra company disclosures alone don't count as a "substantial benefit" justifying fees, and it changes several filing deadlines for moving cases into the Business Court. The changes take effect July 1, 2026, and apply to claims filed on or after that date.

• Creates a legal definition of 'internal entity claim' in Georgia corporate law covering shareholder derivative suits, director and officer duty disputes, records inspections, and valuation proceedings.
• Allows corporations, LLCs, and limited partnerships to require in their bylaws or governing documents that these internal claims be filed only in the Georgia State-wide Business Court.
• Lets certain claims, especially those involving public companies or companies with many outside investors, be automatically eligible for or removed to the Business Court.
• Lets corporations limit director and officer liability for monetary damages, not just director liability, in their articles of incorporation.
• Allows companies with publicly traded shares to set an ownership threshold, up to 1 percent of outstanding shares, before a shareholder can bring a derivative lawsuit.
• Changes several filing deadlines for moving cases into the Business Court and limits when courts must award attorneys' fees, including ruling out fees when the only benefit is extra company disclosures.

Georgia corporations, limited liability companies, and limited partnerships; their shareholders, members, and partners; company directors and officers; and the Georgia State-wide Business Court, which would gain jurisdiction over more internal business disputes moved from superior or state courts.

Companies could steer shareholder lawsuits and internal disputes into a specialized business court instead of regular county courts, and shareholders suing on behalf of a public company could face a minimum ownership requirement before filing. Rules on who pays legal fees in these disputes would also become more limited.

• Section 1 adds O.C.G.A. § 14-1-1, defining 'internal entity claim' to include derivative suits, duty-of-disclosure claims, records-inspection disputes, and valuation proceedings.
• Section 2 lets corporate articles of incorporation limit liability for officers as well as directors and let bylaws require internal claims to go solely to the Business Court.
• Section 4 lets public corporations set a shareholder ownership threshold, capped at 1 percent of outstanding shares, before a derivative suit can be filed.
• Section 5 says extra or amended shareholder disclosures alone do not count as a 'substantial benefit' that justifies awarding a plaintiff's attorneys' fees.
• Sections 7, 8, 9, 11, 12, 15, and 18 add the Georgia State-wide Business Court as an option alongside superior court for various shareholder, valuation, and records-inspection proceedings.
• Section 20 changes deadlines for moving cases into the Business Court, extending the removal window from 60 days to one year and the transfer-petition window from 60 to 90 days, while shortening the objection window from 30 to 15 days.
• Section 20 also lets internal entity claims be automatically removed to the Business Court if a company's governing documents require it or if the company is public or has many accredited investors.
• Section 21 sets the effective date as July 1, 2026, applying to claims or proceedings started on or after that date.

1. 2026-05-11Effective Date 2026-07-01
2. 2026-05-11Act 460
3. 2026-05-11House Date Signed by Governor (House)
4. 2026-04-10House Sent to Governor (House)
5. 2026-03-31House Agreed Senate Amend or Sub (House)
6. 2026-03-27Senate Passed/Adopted As Amended (Senate)
7. 2026-03-27Senate Taken from Table (Senate)
8. 2026-03-25Senate Tabled (Senate)

• Chuck Efstration (R, HD-104)Primary sponsor
• Matthew Gambill (R, HD-015)
• Will Wade (R, HD-009)
• Devan Seabaugh (R, HD-034)
• Stan Gunter (R, HD-008)
• Rob Leverett (R, HD-123)
• Bo Hatchett (R, SD-050)

1. PassedHouse voteFebruary 25, 2026

   104 yea, 66 nay (1 not voting, 6 absent)

   Passage: House Vote #566

2. FailedSenate voteMarch 25, 2026

   14 yea, 35 nay (2 not voting, 3 absent)

   Motion To Resolve Debate: Senate Vote #809

3. PassedSenate voteMarch 25, 2026

   27 yea, 23 nay (1 not voting, 3 absent)

   Motion To Table: Senate Vote #810

4. PassedSenate voteMarch 27, 2026

   45 yea, 2 nay (2 not voting, 5 absent)

   Passage As Amended: Senate Vote #871

5. PassedSenate voteMarch 27, 2026

   37 yea, 9 nay (3 not voting, 5 absent)

   Adoption Of Amendment #4 By The Senator From The 19th: Senate Vote #870

6. PassedHouse voteMarch 31, 2026

   97 yea, 65 nay (6 not voting, 8 absent)

   Agree To Senate Amendment: House Vote #828

• business court
• shareholder lawsuits
• corporate law
• LLC and partnership law
• attorney's fees