So you’ve decided to incorporate your LLC in Georgia. Great choice! Forming an LLC opens the door for tax savings and provides good operational flexibility. It also protects your personal assets from legal liability.
Georgia also offers many tax benefits to startups through tax credit schemes and the Georgia Enterprise Zone program, making it an excellent destination to incorporate your LLC.
This guide will walk you through every step in incorporating your LLC in Georgia. Keep reading to find detailed information about filing methods, costs, taxes, and everything else you may need.
Naming your Georgia LLC
Your LLC’s name gives it a unique identity and defines its brand image. It conveys your company’s core values. So finding a unique and memorable name for your LLC is a critical step in forming your LLC and creating a successful business.
While naming your LLC, you must follow all the naming guidelines the State of Georgia has laid down.
The words “limited liability company” or abbreviations such as Ltd Liability Co., LLC, or L.L.C. must appear in the name of your LLC.
Do not use any name that confuses your LLC with a government agency. For instance, you cannot name your company “Central Insurance Agency” and use the abbreviation ‘CIA.’
The name should also be unique and distinguishable from the name of another entity registered with the State.
Suppose your LLC’s name contains words like “bank,” “attorney,” or “university” you need to include the licensed individual (for instance, a lawyer, a doctor, etc.) into your LLC. You may also need permission from the respective regulators before using the name.
For example, if you wish to incorporate the word “bank” in your company’s name, you’ll need to get written permission from the Department of Banking and Finance.
Does your business require a DBA?
“DBA” is an acronym for “doing business as.” It is an assumed name under which your company operates. For example, if your company’s legal name is “Medicines & Cosmetics LLC,” you can apply for a DBA to incorporate its trading name as “Medicos.”
You would create a DBA if, for instance, you want to create a branding strategy for your business or to diversify into another market.
In Georgia, you must mail the application to the county clerk’s office where you do business. The cost and method differ slightly depending on the county, but the general pattern remains the same. So, for instance, if your LLC is located in Fulton, you will have to send a trade name statement to the County Clerk’s office of Fulton in the Superior Court.
In Georgia, you must publish a notice of your DBA name registration in a paper in circulation in the concerned county. This ought to be done once every week for two weeks.
Option 1: Contact Your LLC’s County ClerkContact County Clerk
Fee: Contact County Clerk
Doing a Name Search and Name Reservation
The laws in Georgia require that the name of your LLC be different from that of any other entity in existence. Perform a Business Search on the State of Georgia website to ensure that your company’s name is not already in use.
If you have decided on a name but aren’t yet ready to start on the formalities of incorporating your LLC, you can reserve the name of your LLC for 30 days by paying a fee of $25 and filling out the application to reserve your business name. You can file the application online or mail the requisite form.
Option 1: Reserve Your Name OnlineApply Online – OR –
Option 2: Reserve Your Name by MailDownload Form
Office of Secretary of State
Corporations Division, Name Reservation Request
2 Martin Luther King Jr. Dr. SE
Suite 313 West Tower, Atlanta, Georgia 30334
Registering Your Business Domain
Your business’s website address needs to match your LLC’s name. The address of your website is how customers find you online.
As a result, before you select a name for your LLC, it is recommended that you ensure that the domain name you need is also available. You should check the availability and register a suitable web domain.
Choose a Registered Agent in Georgia
Once you’ve picked a name for your LLC, the next thing you need to do is to appoint a registered agent. A Registered Agent is an individual or another business entity responsible for receiving all official communication on behalf of the LLC.
Your agent acts as the LLC’s first point of contact for your LLC in case of communications addressed to you LLC by the State. A registered agent also receives legal documents on behalf of the company.
Who can be a registered agent?
Depending on your preference, you may employ the services of a registered agent service provider or be your own agent.
The State provides specific requirements that your registered agent must comply with. The agent you select for your LLC must be:
- An individual State resident (above 18 years) or
- A business entity that has obtained authorization to conduct business in the State.
The registered agent should be available during business hours on all working days.
Individual v. Registered Agent Service
You can appoint yourself or any of your friends or family as the registered agent of your LLC. Alternatively, you can also hire a professional service. Hiring a commercial registered agent service gives you flexibility since you would need to be available during office hours all the time to receive legal papers. It guarantees that the necessary legal compliance is taken care of since a registered agent service will be well-acquainted with the procedures and documentation required from your end.
If you are a home-based business or are generally concerned about your privacy, having a registered agent service will ensure that your address is not present in the official records in the public domain.
Professional help lets you focus your energy and time on core business areas. If you are your own agent, you risk receiving sensitive documents like notice of a lawsuit in front of your employees or clients. Having a professional registered agent service helps you handle the situation discreetly. They receive such sensitive documents at their address and deliver them separately.
Filing the Articles of Organization with Georgia
The Articles of Organization are the legal documents that provide legal recognition to an LLC. The LLC formally comes into existence and is authorized to do business in the State of Georgia after the Articles of Organization are filled with the Secretary of State.
The Articles of Organization must detail the name, address, organization structure, and member’s credentials of the LLC. You can file the Articles of Organization by mail or online.
You can refer to the instructions guide provided by the State for more information. Also, remember, in case you are opting for a paper filing, it must include a Transmittal Information Form.
Option 1: File the application onlineApply online – OR –
File the application via mailDownload form
Corporations Division 2,
Martin Luther King Jr. Dr.
SE, Suite 313 West Tower,
Atlanta, GA 30334.
The State charges an Expedited Processing fee of $100.00 to have your application processed within two working days. The cost is $250.00 for same-day processing and $1000.00 for one-hour expedited service. For more information, read the Corporations Division Filing Fees manual.
Public Notice of Formation
As of now, the State does not have any provisions pertaining to a mandatory public notice of formation for your LLC.
Create the Operating Agreement for your Georgia LLC
An operating agreement is one of the most crucial documents you require for your company. It is an internal document that governs matters such as ownership percentage of different members, distribution of profits/loss among the members, how the company would pay taxes, how the dissolution of the company would take place, etc. An operating agreement acts as a guiding force in matters of the day-to-day functioning of the LLC.
Even though the laws in the State do not mandate an operating agreement, you should have one. It offers credibility to your enterprise.
An operating agreement eliminates the possibility of misunderstanding among members regarding profit/loss distribution and other matters of management of your LLC. Moreover, some banks may require an operating agreement before lending to the company.
There are no prescribed templates for an operating agreement in North Carolina, and you may draft one according to the needs of your business. However, irrespective of the nature of your business, it shall be advisable for your operating agreement to cover the following matters:
- Organization Details
- Duties of Members and Managers
- Management and Voting
- Capital Contributions
- Division of Profit and Losses
- Bookkeeping Procedures
- Procedure for adding new members
- Requirements concerning Meetings and Procedures thereof
Writing the Operating Agreement Yourself v. Hiring a Service
You can create your operating agreement, or you can purchase templates that you can customize to draft the operating agreement of your LLC. However, given the importance of the operating agreement, you should avail the services of a professional like an attorney to write an operating agreement for your company.
Since attorneys and other professionals are constantly engaged in such operating agreements, they can foresee some complications that may arise during the business. Moreover, they can help you draft an operating agreement that suits the needs specific to your business model.
Limits of Operating Agreement
An operating agreement will not extinguish the obligations of your LLC to carry out its business fairly and reasonably. You cannot also include anything prohibited by the State or Federal laws into your operating agreement. A court can intervene if it deems that the terms of your operating agreement are unreasonable.
Obtaining an EIN for your Georgia LLC
An EIN (Employment Identification Number) is a nine-digit number that serves as a tax identification number. It is allotted by the Internal Revenue Service (IRS).
An EIN is required for all multi-membered LLCs. It will also be necessary to open a bank account, file tax returns, and hire employees.
The IRS issues an EIN, and you can apply for it online or through the mail.
Option 1: Request an EIN from the IRSApply online – OR –
Option 2: Apply for an EIN by Mail or FaxDownload form
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935
File Annual Reports in Georgia
An annual report is a document used by the authorities to get the latest and updated information about all the business entities operating in the State. Every LLC in Georgia must file an annual report with the Georgia Secretary of State annually.
The annual report provides information about your LLC, such as the number of staff, members, registered agents, etc. You can file an annual report online on the State of Georgia website.
The due date for your annual report in Georgia is April 1st. The first annual report is due in the year following the incorporation. The State charges a filing fee of $50.
If you fail to file annual reports, the State will charge you a late fee of $25 as a penalty. If you continually fail to file the document for over two years, you risk your business getting shut down by the State.
Tax liability for your Georgia LLC
Depending on the type of business your LLC is engaged in, the tax liability accrued to your LLC in the State of Georgia may vary. Moreover, the federal tax accrued would also be influenced by the taxation structure adopted by the LLC. Let us look at federal tax liability first.
There are four ways in which LLC will be taxed:
- Sole proprietorship: a business owned by a single person
- Partnership: a business owned by multiple people
- C – Corporation: income is split or segregated for taxation
- S – Corporation: tax liability is split between the business and its owners
Federal Tax Liability
Depending on the taxation structure adopted by the members, an LLC will be treated differently for taxation purposes.
If you’re a single-member L.L.C., your default taxation type will be that of a sole proprietor or ‘disregarded entity.’ The L.L.C. has to report its activities under Schedule C, Schedule E and/or Schedule F of Form 1040.
A multi-member L.L.C. is treated as a partnership by default for tax purposes. In such a case, the partnership rules will apply for tax purposes, which means that partners will not be personally liable for taxes. In this case, apart from filing Form 1040, you’ll have to file your partnership return in Form 1065 and provide information in the K-1 of each partner.
Corporate tax rules apply if the company is a corporation, and the company must file Form 1120. Unlike a partnership, the income of an L.L.C. is taxed. If the company is an S-corporation, the L.L.C.’s income is not taxed, but individual members are taxed on their allocated share of income. For tax purposes, an S-corporation must file Form 1120-s.
All the forms will ask you to provide information regarding the assets, liabilities, total profits, and net revenue of the L.L.C. One must keep the financial records of the corporation handy.
If you want to change the manner in which your L.L.C. is taxed, you can do so by filing Form 8832.
State Tax Liability
If you choose to treat your LLC as a corporation, then your LLC will be required to pay corporation tax. The corporate income tax in the State is charged at a rate of 6% of federal taxable income. Additionally, Georgia also charges a net worth tax on specific entities.
If your LLC provides consumer goods, you must register the company with the Department of Revenue. You would have to fill out Form CRF -002. You can do so online by visiting the Georgia Tax Center. After registering, you would receive a sales and use tax number.
If your sales tax collection is more than $200 in sales tax per month have to report sales taxes monthly; if the sales tax collection falls between 50 to $200, then taxpayers have to report sales tax quarterly, and if the sales tax is less than $50 then taxpayers have to report annually.
However, taxpayers can change the return frequency by sending an application to the Department of Revenue. The deadline for filing tax returns falls on the 20th of every month unless it is a holiday, in which case the deadline shifts to the next working day.
If your LLC has hired employees, you must sign up for Unemployment Insurance Tax and Employee Withholding Tax.
Business Licenses and Permits
An LLC operating in North Dakota must comply with State and Federal regulations. Accordingly, your business will be subject to three licensing jurisdictions: Federal, State, and Local.
Federal Licensing requirements will depend on the business activity carried on by your LLC. If your company is engaged in any area of business regulated by the Federal Government, you will be required to obtain relevant Federal Licenses and Permits.
Some business activities requiring Federal Licenses and Permits are:
- Alcoholic beverages
- Firearms, ammunition, and explosives
- Fish and wildlife
- Commercial fisheries
- Maritime transportation
- Mining and drilling
- Nuclear energy
- Radio and television broadcasting
- Transportation and logistics
In Georgia, you must obtain a seller’s permit if your LLC sells specific physical products or services to which sales tax applies. It can be obtained online from the Department of Revenue’s website. In certain cities, such as Atlanta, you must obtain a separate general business license from the City.
Additional permits may also be required depending on the kind of business your LLC is engaged in. For instance, if your company is engaged in a food processing business that might require a food permit by the State’s health department.
Depending on where you operate your business, you may also be required to get the local government’s license and permit. In Atlanta, you need to obtain a general business license. To know more about local licensing requirements, get in touch with the office of your local administration.
For more information regarding;
- Federal Permits and License
- Georgia Professional Licensing Boards Division
- Georgia’s Official State Page
Business Bank Account & Phone Number
It is critical to have a separate bank account for the LLC. The LLC and its members are treated as separate financial entities. It’s also quite handy in terms of taxation. Double-check that you have a separate corporate and personal account after forming an LLC.
When you open a bank account, you will receive a credit and debit card. The credit card helps build your LLC’s credit history, which makes fundraising and applying for loans much more accessible.
Instead of using your home or mobile phone, you may get a low-cost “virtual business number” specifically for your Georgia LLC. You can then forward calls to this company number to your smartphone. Utilize any service that may assist you with personalizing call forwarding, setting up pre-recorded instructions, and so on. This unique phone number also protects your privacy from intrusive public record websites.
With the last step, you will complete all the procedures required to form an LLC in Georgia. However, if you are hesitant about any procedure, you can always use a professional service that suits your needs.
Georgia offers excellent benefits, especially to small businesses and startups. For instance, under the Georgia Enterprise Zone program, you are eligible for property tax and other tax exemptions if your business is located in a designated enterprise zone. Do ensure you check your eligibility for these programs and apply accordingly. Enjoy your new LLC!