How to start a sole proprietorship in Georgia?

Sole Proprietorship in Georgia

Georgia has the ninth largest economy in the US with contributions from several top industries like agriculture, advanced manufacturing, tourism, aerospace, food and beverages, forearms, and heavy equipment among others. If you have a business idea then you can start a sole proprietorship in Georgia as the state offers just the right business climate. The state is also home to startup accelerators and incubator grant programs for small businesses, and state incentives programs.

What is a sole proprietorship in Georgia?

A sole proprietorship is a type of unincorporated business that is owned and operated by an individual. If you start a sole proprietorship in Georgia then there will be no distinction whatsoever between your company and you especially when it comes to filing taxes. You will be entitled to all profits made by the business and will also be responsible for all losses, debts, and liabilities of the company. This type of company is also known as individual entrepreneurship or sole tradership. If you want to know how to start a sole proprietorship in Georgia then first you will need to understand the various features of this form of entity structure.

Important features of sole proprietorship in Georgia

A sole proprietorship is one of the oldest business structures and is also known as a sole trade organization or entity. If you are thinking of filing a sole proprietorship in Georgia then there are several key features that you need to know about. The important features of a sole proprietorship are:

• This type of business is considered a one man ownership entity, which means that if you start a sole proprietorship in Georgia then you are the owner.
• It is not a separate business entity unlike LLC’s where the business and the owners are considered separate. There will be no distinction between the entity and the owner.
• Registering a sole proprietorship in Georgia means that all management, financial, and operational decisions will be made by the owner without any interference from others in the company.
• When it comes to Georgia taxes; a sole proprietorship will file taxes through the individual or owner’s income tax return.
• Starting a sole proprietorship in Georgia is easy and involves fewer formalities as compared to other forms of businesses like corporations, or LLCs.
• Filing a sole proprietorship in Georgia means that there will be an unlimited liability. As an owner, you will be personally liable for any losses or debts.
• Since there are no partners or co-owners in this form of business, the process of dissolution is also quite simple.
• If you are wondering how to start a sole proprietorship in Georgia then the answer is quite simple. You are not required to file any formation document for conducting business in the state unlike for corporations or limited-liability companies.

Are you ready to start a sole proprietorship in Georgia?

Steps to Start Sole Proprietorship in Georgia

If you are thinking of filing a sole proprietorship in Georgia then you need to first start with understanding the market, the state laws, and the requirements associated with conducting a business. There are certain requirements to fulfill and this can vary from one state to another like a sole proprietorship Georgia lookup for business names or knowing the licenses or permits that will be required by your company. Let us look into these important requirements in detail as they will enable you to set up a business and run it smoothly.

1. Prepare a business plan

One of the important and often undermined drivers of a sole proprietorship business is a good business plan. The need for such a plan lies in the fact that it can help your company to grow and become established after registering a sole proprietorship in Georgia. A business plan is considered a strategic plan and will help you in setting specific business related objectives based on market research, and even provides ways to develop new alliances. If you are planning to start a sole proprietorship in Georgia then a business plan should ideally focus on the following key areas:

• Executive Summary
• Mission, Goals, and Objectives
• Organizational Matters
• Personnel and Outside Services
• Risk Management Strategy
• Product or Services
• Target Audience
• Competition Analysis
• Situation Analysis
• SWOT Analysis
• Marketing Plan
• Distribution, Promotion, and Pricing
• Financial Plan

2. Choose a Georgia business name

When you start a sole proprietorship in Georgia or any new business for that matter, one of the first things to identify is a business name. The name of the company is integral to its very existence and hence needs to be well thought out. In a sole proprietorship, the company name is usually the personal name or the owners’ name although you can also opt for a fictitious name also known as the “doing business as” name. You can conduct a sole proprietorship Georgia lookup when choosing a name as there are plenty of examples available online. Some of the fundamental aspects of choosing a name for your company are:

• Keep the name as simple as possible
• The name should be easy to pronounce
• The company name should represent your product or service
• Conduct a copyright or trademark search for the chosen name
• Check for the availability of a domain name based on the company name

3. File Assumed business name

If you are wondering how to start a sole proprietorship in Georgia then the first step is to identify a name. Most sole proprietorships use a DBA name, which is also known as a fictitious name or an assumed name. It is because this form of business is not considered a separate legal entity from its owner. If you want to start a sole proprietorship in Georgia using any other name apart from your name then you will need to file a Georgia trade name.

For example: If your name is John Reese and you want to start a cookie store in Georgia, then you can simply use your name like ‘John Reese’. Alternatively, if you want to give it a more personal touch then you can name it “John’s Crumbling Cookies”. In such a scenario you will need to file a DBA or trade name before you can start a sole proprietorship in Georgia. We at IncParadise can help you with the filing of a DBA (doing business as) in this state.

4. Get EIN

Filing a sole proprietorship in Georgia means that you will be required to pay income tax on your personal return since the business and the owner are considered the same. Normally, you will need the Social Security number (SSN) to file personal income tax but in specific scenarios, you may be required to apply for and obtain an Employer Identification Number (EIN). After registering a sole proprietorship in Georgia, you may need to apply for an EIN if:

• Your company has employees
• You have a Keogh plan
• You are filing pension plan returns
• You have to file Chapter 7 or Chapter 11 bankruptcy
• You have to file sales tax in Georgia

5. Obtain necessary licenses and permits

Once you start a sole proprietorship in Georgia, you need to ensure the business is operational or you are able to transact in the city or county your company is based in. This is possible only when you have obtained the necessary licenses and permits. You may require multiple licenses or permits depending on the type of business activity. Business licensing can be categorized under:

• County or local licensing
• Professional or regulated licensing

6. Open a bank account for your Georgia business

A sole proprietorship business is a single owner driven and controlled business. Since the business and the owner are not considered separate entities like in an LLC; you will be required to file a personal income tax return. Hence, it is very important to ensure the revenue generated or expenditures of your business are separate from your personal bank account. This can be made possible by opening a business bank account using which you can make business related transactions. You can open this business account before or after filing a sole proprietorship in Georgia.

7. Report and pay taxes

Registering a sole proprietorship in Georgia means that you will be required to report taxes annually. As a sole proprietor, you will be required to establish a Georgia Tax Center (GTC) account with the Department of Revenue (DOR). You will need the following information for registering such an account:

• Social security number (SSN) or Employer Identification Number (EIN)
• Any recent federal adjusted gross income (FAGI) or Adjusted Gross Income (AGI)
• Your NAICS code
• The type of tax account you want to register for

Ready to Start a Sole Proprietorship Business in Georgia

A sole proprietorship is one of the simplest business structures that you can form. Filing a sole proprietorship in Georgia will not require you to register with the office of the Secretary of State but there will be a certain amount of paperwork involved in making your company operational. This is where IncParadise can provide expertise towards ensuring you are able to start your sole proprietorship business with ease in the state.