Incorporating a business in Georgia – Setup your business correctly

The basic steps to incorporate in Georgia

This article is about incorporating in Georgia so that it will be a little different from the others. Georgia is part of the United States, and if you want to include it here, here are the steps: contact your state government and find out what you need to do.

If not, contact your county government (if it’s an unincorporated city) or talk with the state secretary for incorporated cities. You will typically have to file Articles of Incorporation with these offices and pay a filing fee. The process should take no more than 15 days from start to finish once you have submitted all necessary documentation.

Foreign and Domestic Corporations

In Georgia, there is no difference between foreign and domestic corporations. You are not required to even use the words “foreign” or “domestic” in the corporation name reservation.

If you’re incorporating a business here, it’s best to follow the state guidelines as closely as possible because these government agencies probably get many questions about incorporations.

Suppose you intend to do business in multiple states. In that case, it’s a good idea to check with each State where you might be conducting business to see what that particular State has to say about corporations and how they operate within their borders.

I get the impression that Georgia is pretty open and friendly regarding business incorporation, but you would be well advised to check with your county or State just in case.

Naming a Corporation in Georgia

In Georgia, the name of your corporation must contain either the words “corporation,” “company,” or “incorporated.” This means that if you intend to incorporate a business as a limited liability company, then you may have some trouble.

It would help if you also used a name that does not imply you are conducting business in another state or country because, as far as I can tell, this is against the law according to Georgia statutes.

If you want to incorporate a business with a name that contains “limited” or “limited liability,” you can do this. You can also use those words to identify your business if you like.

Nothing prohibits you from using any of these terms in your corporation’s name, but there are guidelines for what kind of names are acceptable in Georgia.

Officers and documents in Georgia

The State of Georgia does not distinguish between an officer and a director. The Board of directors of corporations is known as officers in Georgia.

Georgia also does not have any laws about corporate bylaws or corporate resolutions, so it’s up to you what type of corporate policies you implement within your company structure.

That being said, State Secretary here only requires you to provide an original and a copy of your Articles of Incorporation when incorporating.

The Secretary of State we spoke with also stated that they do not require corporations to have corporate officers in place for the first year after incorporation. However, this is up to each corporation’s discretion, and such decisions can be made at the Board level.

I am unclear on this, but I understand that if you have a corporation here, it’s advisable to file an Annual Report with State Secretary at least once a year. This does not appear to be mandatory because corporations are only required to do so if they are profitable.

Georgia Corporations and Taxes

As far as Georgia taxes go, I did some research, and it seems like there are both local and state taxes associated with business incorporation in Georgia. This is general information and should not be used for specific tax advice.

Georgia has an income self-employment tax, but this only applies to incorporated entities engaged in a trade or a business here, either directly or through another subsidiary corporation. In this case, the parent corporation in Georgia is liable for all state taxes.

There are also franchise taxes for you to form a corporation in Georgia that must be paid to the Department of Revenue before you can incorporate. It’s $100 per year, but this can vary, so check with the Secretary of State first. There is also an annual tax return filing fee of $40 for corporations due during their first tax year.

For more information, I suggest you contact the Department of Revenue at 1-404-417-6710 or visit the Georgia Department of Revenue website.

My impression is that the State of Georgia has pretty relaxed and straightforward incorporation laws for businesses.

Common Registration Form of Georgia Business Organizations – how to switch?

Business structure is a crucial decision and should not be taken lightly. I’ve briefly touched on the subject in this post, but there’s much more information available than what I have already provided, so if you are interested, please take the time to do some research of your own. 

If you have any questions, please ask away. I aim to provide information and not a legal guide, so feel free to do your research as well. 

One issue that I would like to address here, though, is in regards to switching business structures. If you decide to form a Georgia limited liability company, can you change it back if you dislike the idea, or do you?

Forming a corporation online in Georgia is not that difficult, and you can do it yourself by visiting the Secretary of State website. There’s a $50 filing fee associated with this.

G.A. LLCs vs. G.A. Corporations

LLCs and corporations have a few similarities but also many differences. The main difference is that LLCs are generally pass-through entities where the income, deductions, and credit score simply “pass-through” to the owners or members of their corporation.

This means that there is generally no need for LLCs to pay taxes at the corporation level. On the other hand, corporations generate taxable income at both the corporation level and the personal level for profits distributed to shareholders.

Corporations are also subject to double taxation as opposed to LLCs, which only have a single-level surcharge.

LLCs are allowed limited liability protection, whereas corporations do not enjoy this same benefit. Limited liability is essential for the owners of a corporation because it prevents them from being personally responsible for any debts, losses, or liabilities incurred by their business.

This means that the owners (shareholders/ members) are only liable for damages up to their investment in their business. If you want to learn more about limited liability companies, click here.

Business structure affects many decisions, and I will be covering this topic much further later on. Before you rush into anything, though, I advise you to take the time to do your research and weigh the pros and cons of each option. I’ve done my best to provide you with some helpful information here, but this is still no substitute for actually doing it yourself. Good luck!

Georgia Incorporation Overview

Below, we’ll take a brief look at creating an LLC in Georgia and how to switch your business structure. Please note that this information is provided for educational purposes only, and I am not an attorney, so you should always do some additional research of your own before making any major decision involving your business.

Jurisdictions

All Georgia LLCs, corporations, and partnerships with more than one member must register with the Georgia Secretary of State.

Georgia Business Entities Being a member-managed LLC is very simple in Georgia, and there are no annual report fees to worry about. If you decide to form an LLC, you only need to file a copy of your articles of incorporation with the State to get started. However, if you want your business structure to be taxed like a corporation, you will have to file additional documents with the State.

The more complex your business structure will get, the more options there are for you to file and which one is right for you depends on many factors but mainly how much profit your business wants to generate annually. The Nonprofit Corporation Act also sets forth provisions for defining public charity status.

The most significant benefit of forming an LLC over an S-Corp is that LLCs are not subject to double taxation, which corporations are. Corporations are taxed at the corporation level and then again once distributed as dividends to their shareholders.

Essentially, taxes are paid twice on profits generated by a corporation in Georgia making it less attractive for investors than an LLC that only has single-level tax liability.

How to Incorporate in Georgia

You can incorporate a business in Georgia easily by filing Articles of Incorporation with the Secretary of State. You must also fill out an application for a Corporate Identification Number (CIN) and submit it to a background check.

State Secretary will then issue you your corporation in Georgia or LLC’s Certificate of Authority along with your CIN number and a corporation number if you choose to be treated as a corporation. You don’t have to list who your shareholders will be until you are ready to issue stock shares, so make sure you do this when you are prepared to add them.

G.A. Annual Report Requirements

None of the business entities registered in Georgia must file annual reports with the Secretary of State.

Georgia Business corporation Tax Returns

Corporations – Required to file and pay Georgia income tax. The form that needs to be filed is a 2007 Corporate Tax Return (Form CT-1). S – Corps – No state-level tax obligation, so you can use either Form 1120S or 1120 to report profits and losses. LLCs – No state-level tax obligation, so you can use either 1065, 1120, or 1120S to report gains and losses.

Some notes: If you have employees in Georgia, your business needs to have a Federal Employer Identification Number (FE IN). Your FEIN will be the nine-digit social security number assigned to you by the IRS. Once you have your FEIN, you should contact the IRS and request a Federal Tax ID Number (TID). You can use this TID in place of a FEIN moving forward as it is easier to remember.

Georgia Business Taxes.

Corporations- Required to file and pay Georgia income tax. The form that needs to be filed in the 2007 Corporate Tax Return (Form CT-1). S-Corps – No state-level tax obligation, so you can use either Form 1120S or 1120 to report profits and losses. LLCs – No state-level tax obligation, so you can use either 1065, 1120, or 1120S to report gains and losses.

There are some more perquisites for different types of businesses in Georgia as well. If you have employees in Georgia, then your business needs a Federal Employer Identification Number (FEIN). Your FEIN will be the nine-digit social security number assigned to you by the IRS.

you have your FEIN, you should contact the IRS and request a Federal Tax Identification Number (TID), which can be used in place of a FEIN moving forward as it is easier to remember.

If your business is making more than $500,000 in revenue per year and you are a corporation, you will be required to pay 3% of your net income as a state franchise tax.

If your business is making more than $250,000 in revenue per year and you are an LLC or S-Corp, you will be required to pay 1% of your net income as a state franchise tax.

In addition to filing your Georgia income tax return, the same forms that you use for your Federal taxes will also be used to file Georgia business taxes which are 1065 for LLCs or 1120 if you report as S-Corp or 1120S if you report a corporation.

Corporate Bylaws and Articles of Incorporation in Georgia

If you choose to incorporate, then Georgia requires that your corporate bylaws and articles of incorporation match with the Secretary of State. Corporate bylaws are written rules that govern the behavior and decisions of a corporation. Articles of incorporation generally contain information on tax it, where meetings will be held, corporation names and addresses of officers, etc.

Corporate Officers in Georgia

Georgia requires a corporate officer to be registered with the Secretary of State. The Officers needed to be written President, Vice-President, Secretary, and Treasurer if you choose for your corporation to have them.

You can list additional people as officers as long as they meet all the requirements listed in the Georgia statutes. For example, a corporation in Georgia does not have to have a secretary. There can be only one Georgia registered agent for each business entity, and it must be someone who resides at the same address as the business itself.

Corporate Seal or Stamp

Georgia law requires that a corporate seal or stamp contain specific language including if applicable: “Name of Corporation,” “P.O. Box,” the State of incorporation and the year of its incorporation, the amount paid for state franchise tax, and “Notice—All communications of any nature whatsoever intended for this corporation in Georgia should be addressed to….”

Corporate Records

Georgia law requires that a corporation in Georgia keep current information on filings, including a copy of your articles of incorporation, bylaws, and corporate seal or stamp. Copies of minutes for every annual meeting, special shareholders meeting, and a corporate resolution passed during the year.

Listing each stockholder’s name and a number of shares held for at least three years from the date of document being recorded (in addition to your state business license) in a book that is kept in a secure place and only allowed to be accessed by authorized people.

Corporate Annual Report in Georgia

Georgia requires a corporation to deliver an annual report to each shareholder which contains all of the following if applicable: State license, name, and address of the registered agent, names and addresses of all agents authorized by appointment or statute to accept incorporation service of process.

Description of business and nature of products or services, amount of net worth, description of where the principal office is located, and how to access it, including a phone number or address for each location in addition to the corporate mailing address.

Selecting a Business Name for an LLC

Georgia requires that a business name database contain descriptive words but not use words or names to mislead the public. Examples include “Eastcoast Carpet”, “Carpet Atlanta” and “North America Produce.” If you use a name that is not available and/or already in use by another business, the Georgia Secretary of State will not allow it.

Georgia LLC Operating Agreement

Electing to have an operating agreement will not affect your taxes in Georgia. The operating agreement only becomes important if you decide that a membership interest is being sold and then it needs to be recorded or in the case of a legal dispute on whether there was a fraud, breach of contract, or similar wrongdoing, which would then be decided by referencing the operating agreement.

There are many reasons to have an LLC operating agreement. The primary reason is if you and other members want to leave future business decisions up in the air or require a unanimous vote among the shareholders before making a decision such as selling your membership interest.

An example of where a straightforward operating agreement would be helpful is if a member wanted to contribute additional cash for a business expansion and the other members did not want to contribute an equal amount.

Georgia LLC Articles of Incorporation and Additional Requirements

Georgia requires that articles of incorporation be filed with the Georgia Secretary of State, which includes an LLC name, address, and registered agent. The cost is $50 plus additional affiliate commissions if you require a certified copy in order to record it in your county recorder’s office.

A “legal description” or physical street address is also required for the primary location of your LLC.

Georgia requires that if the business has more than one location, there is a registered agent in each county where you conduct business. If a primary place of doing business is lost by foreclosure or sale, unemployment, etc., then another LLC must be formed to maintain continuity.

The Georgia Secretary of State charges $50 dollars an hour for them to draft your articles of incorporation. The State will normally allow you to submit a form or letter that lists your name, address, registered agent, and operating agreement, which is approved by all members at no additional charge.

If you were incorporated under an existing LLC in another state and the name is not available for use in Georgia, then there may be an additional charge of $50 dollars.

Companies are required to file a form with the Georgia Secretary of State that allows them to be taxed at a single rate instead of paying income taxes on revenue from each county in which they conduct business.

Do corporations have to register with the Georgia Department Of Revenue?

Yes, a corporation registered in Georgia is required to register with the State of Georgia Department of Revenue. The cost for registering a corporation with DOR is $50 dollars.

How can I submit the Georgia Articles of Incorporation?

The Georgia Secretary of State provides a link that will walk you through the process to submit your documentation electronically. The cost is $50 dollars plus additional charges if a certified copy is required for recording with the county recorder’s office.

Do I need to get an EIN in Georgia?

Georgia requires all corporations and LLCs conducting business within their State to get an EIN from the IRS. The cost is $5 dollars.

Does Georgia have a “business privilege tax?”

You must apply for and obtain a State of Georgia Sales & Use Tax License in order to collect sales taxes within the State of Georgia. You will not be required to charge sales or use taxes if you are only conducting business within your home state and do not have a physical presence such as renting office space or having an employee in Georgia.

Advantages for New Businesses – LLC or Corporation?

Corporations and LLCs are taxed differently. If a single-member corporation is not conducting business in another state except for banking purposes, you are not required to be registered as an out-of-state corporation by the Secretary of State in Georgia or any other state.

If you want to operate your business under corporate status and have decided on an LLC, you have already met the requirements of an S-Corp by being a “single-member limited liability company.” This is largely due to there not currently being any IRS regulations for how an LLC needs to be structured. An S-Corp offers some legal advantages over other forms of entities in many jurisdictions.

There are several different types of corporations in Georgia. The most important one for small business owners is the “S-Corp.” The S Corp prevents double taxation at both the corporate and shareholder level. They have to meet some stringent requirements which are very similar to those of an LLC (page 3).

There are advantages with both types of entities, but it is highly recommended that you consult an attorney to weigh the pros and cons of either type of business entity.

What is a “single-member limited liability company?”

A single-member LLC has exactly one member or owner. A sole proprietor could be considered a single-member LLC if they wish to register as an S-Corp. The advantage of an S-Corporation over a sole proprietorship is that it can be taxed under Subchapter S. The disadvantage of an LLC is that they don’t have limited liability protection from personal assets such as real estate or vehicles.

Are there any special rules for Georgia organizational meetings?

Yes, Georgia requires that the first meeting of the LLC take place within 30 days after filing is submitted to the Secretary of State. At this meeting, any one person can handle the corporation and name approval process. The shareholder must be 18 years old or older. If you are younger than 18, your parent or guardian may sign on behalf of the LLC or C corporation.

This name approval can take place by registered mail, email, or online. It does not specifically require that this first meeting take place in Georgia either though it is recommended you attend the meeting in person for your own protection.

Does Georgia have a minimum capital requirement?

No, there is no specific amount set forth by the State of Georgia in regards to the minimum capital requirement.

Do I need bylaws for my Georgia corporation?

Georgia does not require a corporation to have bylaws. If you choose, you are legally allowed to make your own corporate rules such as voting rights and board elections during the first meeting.

Can I form an LLC or Corporation online?

Both new business entities may be registered online with the Georgia Secretary in Atlanta, Georgia. If you prefer to register forms in person, you may do so at the location listed below.

What is a registered agent?

A registered agent is an individual who agrees to accept official communications and legal documents on behalf of your LLC. Your business cannot be legally filed until you have designated a registered agent to act as a liaison between you and Georgia’s Secretary of State.

The registered agent can be an individual, a business, or even another LLC. Just make sure that the registered agent holds a current and valid physical address in Atlanta, GA to receive all communications from the Secretary of State’s office. You are also legally required to place your registered agent’s name and address on the Articles of Incorporation (page 4) and Annual Reports.

Do I need to renew my Georgia C corporation or LLC in person?

Yes, all new corporations and LLCs formed in Georgia must be renewed annually with the Secretary of State’s office in Atlanta, GA. You may renew online, but you are required to pay by certified check or money order in order for your business to be renewed. The fees are $50 for corporations and $30 for LLCs.

What is a Registered Agent?

Registered agents are people who sign up as the authorized representatives of your business. They essentially act as your company’s legal address by receiving important legal documents that you may need to know about, such as notices of lawsuits or tax information. Registered agents can be an individual, agency, or even another business.

What is a Certificate of Good Standing?

In order to open a bank account or contract for a loan, you may need proof that your Georgia LLC/Corporation is in good standing within the State’s Secretary of State office. To do this, you may request a Certificate of Good Standing from the Georgia Secretary of State’s office, which is $20 and available to view online.

You are also legally required to place your registered agent’s name and address on the Articles of Incorporation (page 4) and Annual Reports.

What are the Georgia Initial and Annual Registrations?

Georgia requires all new businesses to register within the State’s Secretary of State office in Atlanta, Georgia. The initial registration fee is $50 for a corporation and $30 for an LLC. After this, annual registrations must be renewed with the State each year to maintain active standing.

When is the Georgia Initial Annual Registration due?

All Georgia corporations and LLCs must be registered by May 1st of each year.

What are the directors’ names filed with the State of Georgia?

The Secretary of State requires that the name, address, and contact information for at least 3 board members be reported. The Secretary of State’s website has a list of all business entities formed in Georgia and their directors’ names.

Whether you are a brand new business or one that has been around for many years, it’s always a good idea to let your clients, friends, and customers know about any changes in your legal structure. With the help of our simple yet efficient forms, you can announce your LLC conversion or C corporation registration with ease!

How to Incorporate in Georgia vs. How to Start an LLC

When you’re starting a business, you’ll be faced with many decisions. One of the biggest decisions will involve choosing your entity type — whether to go with a C corporation or an LLC. Both types of businesses provide limited liability protection for their owners (also called members), so how do you decide?

Incorporating in Georgia vs. Filing for an LLC

In order to register a new business with the State of Georgia, you must choose either a corporation or an LLC. You cannot register both. Technically, a corporation is owned by shareholders, and an LLC is owned by members. The differences between incorporating in Georgia vs. starting an LLC are fairly minute and the differences boil down to a few key items.

Corporations must have at least one shareholder, while LLCs are not required to have members or may only have one member. The advantage of having shareholders? A corporation’s owners can be held liable for business debts and obligations up the amount of their investment in the company — that is, they are responsible only for the amount they put into the company.

Corporations are more heavily regulated by state authorities and may be required to hold meetings, while LLCs need not. Also, in a corporation, business profits (called distributive shares) must go directly to shareholders before being distributed among officers or owners — that is, the corporate form doesn’t allow for an owner’s salary.

With an LLC, owners may take a distribution for salary or profit. A corporate officer can be held personally liable in some instances for debts or claims against the company; however, an officer of an LLC is generally not on the hook unless he or she acted with gross negligence or outside professional conduct.

How to get A Business License in Georgia

The Georgia Secretary of State does not handle business licenses. Each city and county in Georgia has its own licensing procedure that you must follow to operate your business within their area. A good place to start is by contacting the office of the mayor, or maybe the county board of commissioners if it’s a rural area. They will be able to direct you to the right place.

Business Licenses in Georgia – A Closer Look

General business license — If your business is involved in general trade and does not operate any motor vehicles, then you will need to apply for a general business license. Professional licenses are required if your company’s activities involve engineering or other fields that require special licensing.

Business License Renewal in Georgia 

Your business license renewal notice is mailed by the end of March. If you do not receive your renewal, contact the county registrar’s office or contact the Secretary of State. The due date for renewing a general business license is 90 days before it expires, and professional licenses are 90 days after their expiration date.

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