Georgia legislative chambers approve Efstration’s bill on business court jurisdiction and internal entity claims

A new bill from State Rep. Chuck Efstration defines internal entity claims, expands the reach of the business court, and establishes legal standards for shareholder and partner actions, according to the Georgia State House.

The measure cleared both chambers as of Tuesday, March 31, with a 97-65 vote in the House and a 45-2 vote in the Senate.

Filed as HB1185 during the 2026 session of the 158th General Assembly on Wednesday, Feb. 4, the court bill was titled: ’Courts; certain shareholder claims to be brought before the Georgia State-wide Business Court; provide’.

The following summary is based on our reading of the original bill text, with brief explanations added for clarification.

Essentially, the bill sets parameters for “internal entity claims,” enabling Georgia corporations, limited partnerships, and limited liability companies to require that these internal disputes be adjudicated solely by the Georgia State-wide Business Court. Corporate governing documents may mandate use of that forum. It also allows transfer of eligible litigation from other courts. Shareholders and limited partners in publicly traded entities face a 1% ownership minimum for filing derivative suits, narrows attorney fee eligibility for disclosure-only settlements, and restricts records inspection demands linked to existing litigation. Claims initiated on or after July 1, 2026, will be governed by the law.

In the House, one Democrat and 96 Republicans were in favor, with opposition from 65 Democrats.

Senate approval came with 14 Democrats joining 31 Republicans for support, while two Democrats voted against.

Additional sponsors for the bill included Rep. Matthew Gambill (Republican-15th), Rep. Stan Gunter (Republican-8th), Rep. Rob Leverett (Republican-123rd), and three others.

Efstration completed undergraduate studies at the University of Georgia in 2004, then earned a JD from Walter F. George School of Law in 2008.

A Republican, Efstration has represented Georgia’s 104th House District since his 2013 election, succeeding Donna Sheldon for the seat.

Gov. Brian Kemp signed the measure into law on Monday, May 11.

Georgia’s legislative process starts with a bill being drafted by a lawmaker, typically at the request of a constituent, in collaboration with the Office of Legislative Counsel. After introduction to the Clerk of the House or Secretary of the Senate, the bill gets its first reading and committee assignment; committees serve as the main venue for review and revision. Bills that pass committee proceed for a third reading and floor vote. For enactment, both legislative chambers must pass the same version—sometimes reconciled in conference. The governor then has up to six days during session, or 40 days post-adjournment (Sine Die), to approve, veto, or permit the measure to become law without a signature. The Georgia General Assembly’s session starts on the second Monday of January and spans 40 legislative days each year.

Information for this report came from the Georgia State House. Source data is available here.