How to form your LLC in Georgia?

LLC in Georgia

Georgia with its strong infrastructure and a growing economy is a good location for a small business or a startup. The state is home to 1.1 million small businesses and a Gross Domestic Product (GDP) of $533.57 billion, which makes it the 9th largest economy in the nation. The peach state is home to several Fortune 500 companies with most of them based in Atlanta including the Home Depot and the Coca-Cola Company. The state offers several business targeted programs that you can take advantage of after you form a Georgia LLC. As a limited-liability company, you can even leverage the various tax credit programs the state has implemented.

What is Georgia LLC?

A limited liability company (LLC) is a type of flexible business structure with the salient aspect as limited personal liability. If you form a Georgia LLC then you will be able to benefit from the tax benefits that it has over certain other entities like traditional corporations and sole proprietorships. A limited liability company in Georgia is a type of private limited company that is considered a hybrid legal entity. It is a hybrid because it has specific characteristics of a traditional C Corporation and a partnership depending on the number of owners. If you are planning to file an LLC in Georgia then you can choose any of the following structures:

• A Single-Member LLC is similar to a Sole Proprietorship
• Multi member-managed LLC
• A series LLC
• Manager-Managed LLC
• Foreign limited liability company

Benefits of forming an LLC in Georgia

There are several reasons why entrepreneurs prefer to form a Georgia LLC and one of the primary reasons is the various benefits this type of business structure offers. Some of the benefits offered by an LLC are:

• Tax regime – When you form a Georgia LLC, you get to select the type of taxation it will follow. A limited liability company may elect to be taxed as a sole proprietorship, partnership, C Corporation, or even an S corporation. This provides a lot of flexibility.
• Liability protection – One of the most important benefits you can leverage when you file an LLC in Georgia is limited liability protection. The owners or members of an LLC will be protected from some of the liability or all the liability for any debts and acts of the said LLC.
• Pass-through taxation – When you form a Georgia LLC, you will automatically enjoy pass-through taxation unless you opt to be taxed as a C Corporation. Pass-through taxation simply refers to the fact that the tax is passed through from the business to the owner who files them on his or her personal tax return.
• Flexible membership – When you file an LLC in Georgia, you will be able to enjoy the flexibility of membership. This means that members of your LLC may include partners, individuals, estates, trusts, or other business entities.

Forming an LLC in Georgia

Georgia is popular as one of the best states for a startup due to the access businesses have to reliable infrastructure, skilled workforce, high state credit ratings, and low taxes. If you are planning to form a Georgia LLC then there are several processes involved in the registration and the operational aspect of the business. The relevant processes as mentioned below will not only help you to fulfill all Georgia LLC filing requirements but also enable you run your business smoothly.

1. Choosing a Georgia LLC name

The first step towards Georgia LLC registration is identifying a name for your company. It is never an easy process to choose a company name but you can use business name generator tools for this purpose. You need to also ensure compliance with Georgia LLC filing requirements for a name as governed by the 2020 Georgia Code, Chapter 11 – Limited Liability Companies. The naming guidelines to follow are:

• The chosen name should contain “limited liability company”, “limited company” or abbreviations like L.L.C or LLC pursuant to Georgia LLC rules – GA Code § 14-11-207 (2020).
• The business name should be distinguishable from the names of any other business entity that exists in the records of the Secretary of State including foreign corporations and foreign limited liability companies. This is possible through a Georgia LLC search.
• The chosen name should not exceed 80 characters and this includes spaces and punctuation.

2. Choose Georgia LLC registered agent

There is a process involved for Georgia LLC filing online and this requires documentation as stated by the office of the Secretary of State. You will need to ensure correct information is provided and have to also maintain compliance with all state laws. As an entrepreneur or first time business owner, the process may be complex and this is where a reputable Georgia LLC registered agent like IncParadise can assist you.

3. File certificate of formation and transmittal form

The most important Georgia LLC filing requirements are the new business formation documents. You will be required to prepare and then submit the Articles of Organization pursuant to GA Code § 14-11-204 (2020). You can choose the Georgia LLC filing online option or the articles can be hand-delivered or mailed to the Corporations Division. The filing fee for online submission is $100 and the fee for submitting in person or through the mail is $110.

• LLC Name Reservation Number
• LLC name
• Principal Office Mailing Address
• Name and address of Georgia LLC registered agent
• Name and Address of Each Organizer

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4. Prepare Georgia LLC operating agreement

An LLC operating agreement is a type of legal document, which helps members of a said company to create an outline of the LLC’s standard operational procedures. If you are planning to form a Georgia LLC then you will need to ensure an operating agreement is in place before you register your company. This document is not legally required by the state but having it can help protect the business operations.

Whether you are planning to file an LLC in Georgia as a single-member or a multi-member LLC, the operating agreement should address key areas like:

• Organization and ownership
• Management and voting
• Capital contribution
• Profit and loss distribution
• Future changes to the membership structure
• Dissolution

5. Obtain an EIN for Georgia LLC

When you file for Georgia LLC registration and the company is formed, one of the key areas is preparing and filing annual taxes. In order to file taxes and depending on the type of business structure, you will require a Social Security number (SSN) or Employer Identification Number (EIN). The latter is applicable for most businesses including a limited liability company and is also known as the Federal Employer Identification Number (FEIN). The EIN is a unique nine-digit number that is assigned to businesses by the Internal Revenue Service (IRS). You can apply for this number before or after you file an LLC in Georgia.

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6. Check local licenses and permits

Georgia is known to have one of the best business climates and low taxes, which are two important reasons that attract entrepreneurs to form a new business in the state. The big question is what happens post Georgia LLC registration. First time business owners may feel that registering a business will help them transact in the state but that is not true. Apart from fulfilling Georgia LLC filing requirements, you will need to obtain licenses and permits in the state. A business license will help you make your company operational. The licenses and permits applicable in Georgia are as follows:

• Industry based licensing – Once you form a Georgia LLC in a specific industry then you will need to check the licensing norms of that industry. The licensing requirements can change according to industry and occupation and you may even require more than one license. So, if you file an LLC in Georgia to start a Food Sales Establishment then you will need to obtain a business license from the Georgia Department of Agriculture – Licensing Division.
• County, City, or Local Licensing – A Georgia LLC filing online option is applicable for every new business and can be done through the office of the Secretary of State but what about licenses? Since there is no general business license in the state; you will need to contact the county or city in which your business is located. So, if you file an LLC in Georgia in Fayette County then you will need to apply for an “Occupation Tax Application” with the Fayette County Finance Department.

An incorporation company like IncParadise can provide information and guidance pertaining to business license requirements in this state. You can also avail of our Business License Research Report for detailed information on permits and licenses in the state of Georgia.

7. Open Georgia LLC bank account

A business bank account plays an important role in the growth and expansion of a business. When you form a Georgia LLC, you will be making different forms of transactions as well as different expenditures and earnings. A business checking account will allow you to keep track of all transactions including business expenses and also simplify tax reporting. It is ideal to open a business bank account for your company after you file an LLC in Georgia or after getting your Employer Identification Number (EIN). One of the salient aspects of this type of banking account is that it can protect the owner’s liability by ensuring personal and business funds are kept separate.

8. File Georgia reports and taxes

Once you file for Georgia LLC registration and obtain the necessary business licenses and permits, the next step is to ensure all annual state compliances are met. There are primarily two important annual requirements and they are:

• Annual Registration – If you file an LLC in Georgia then it is important to complete state annual registration. It is similar to filing an annual report and has to be filed with the office of the Secretary of State each year. The due date for filing the annual registration is between January 1 and April 1 each year and the filing fee is $50 for a Georgia LLC.
• LLC Taxes – Once you form a Georgia LLC, you may be required to file different types of taxes depending on the type of business or business activity. The most common is the state business tax. Since an LLC is a pass-through tax entity, the taxes would be filed by the owner or members instead of the business. If your company has employees then you will be required to file state employer taxes and if you are selling goods to customers in the state then sales and use tax will also be applicable.

Know more about starting a Georgia LLC!

The process of Georgia LLC registration consists of several sub-processes and you may have several questions pertaining to various aspects of new business formation. Hence, we have created a special section of “Frequently Asked Questions” for addressing some of the queries that you may have as a first time entrepreneur.

Is Georgia a good state to form an LLC?

If you are planning to take your idea to the next level, which is forming a new business, then Georgia is just the perfect state. According to a report by WalletHub, the state is ranked as the 8th best state for startups. There are several benefits to forming a Georgia LLC and some of the top advantages are:

• The state is ranked the 5th best when it comes to the availability of skilled labor or human capital
• Private equity (PE) investment in the state has been over $21.78 billion
• If you file an LLC in Georgia then you will be able to leverage the pro-business tax climate and the various tax credits
• The state has a robust logistics environment and strong transport infrastructure that supports new businesses
• The state has a strong technology startup ecosystem consisting of startup accelerators, venture capital providers, and entrepreneur development programs among others
• There are 260 Qualified Opportunity Zones where businesses can enjoy job tax credits and other incentives

How much does it cost to form an LLC in Georgia?

A Georgia LLC registration is governed by the 2020 Georgia Code, Title 14 – Corporations, Partnerships, and Associations, Chapter 11 – Limited Liability Companies. The initial cost to file an LLC in Georgia is $100. Apart from the initial cost, there will be costs attached to Annual Registration, Business Licenses, Name Reservation, and hiring a registered agent among others.

What is the processing time to form an LLC in Georgia?

Once you file a Georgia LLC registration, the processing time will vary depending on how you have submitted the documents. If you file an LLC in Georgia online then the processing time is 5-7 business days. If you submit your articles of organization by mail or in person then the processing time will be a maximum of 15 business days. You can also avail of expedited processing by paying an additional fee like an additional $100 for 2 business days of expedited service.

How can I check if my Georgia LLC name is available?

A business name is crucial to help with Georgia LLC filing online but you will have to reserve the name. In order to reserve the name, you need to check if such a name is available. The business name availability check can be conducted through the Georgia Corporations Division portal for business search. If your chosen name is available then you can reserve it and if it is not available then you will have to think of a new name and conduct the name search again.

Do I need a business license for my Georgia LLC?

Yes. If you are planning to conduct your business in the state of Georgia then you will have to apply for a county or city license also known as a business tax certificate. It will be issued in the county or city your business is based in. You may also be required to obtain a certificate of occupancy from the city or county zoning department as well as licenses or permits for regulated occupations and industries. You can subscribe to our Business License Research Report service as it provides detailed information on several aspects of licensing in the state.

What taxes does an LLC pay in Georgia?

Once you form a Georgia LLC, depending on the tax status you choose, you will be required to file business taxes in the state. Some of the taxes applicable for a Georgia LLC are:

• Sales and Use Tax
• Withholding tax if you have employees
• State income taxes for certain small businesses

Can I register a foreign LLC in Georgia?

Yes, The Georgia LLC filing requirements for a foreign company require you to obtain a Certificate of Authority pursuant to GA Code § 14-11-702 (2020). The filing fee for a Certificate of Authority is $235 and you have to apply with the office of the Georgia Secretary of State, Corporations Division. This process is known as the “Qualification of Foreign LLC” and without it; you will not be allowed to conduct business in the state.

How do I dissolve my Georgia LLC?

After you form a Georgia LLC, there can be many reasons why you would want to dissolve your company. According to state laws, GA Code § 14-11-602 (2020), the dissolution can happen if reasons or events have been specified in the articles of organization or the operating agreement. The process of dissolution will require you to file a Certificate of Termination (Form CD-415) with the Georgia Secretary of State, Corporations Division. There is no fee for filing a Certificate of Termination.

Ready to form a Georgia LLC?

There are different types of business structures that you can choose to form in the state of Georgia although one of the most popular is an LLC. A limited liability company has many advantages over other business structures including tax benefits. If you want to form a Georgia LLC then IncParadise can assist you with the process of registration of your new business in the state.