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Georgia is a great place to start a business. Many small businesses exist in Georgia. When creating your business in Georgia, decide whether you want it to be a sole-proprietorship or corporation. Starting a corporation in Georgia is as simple as filing Articles of Incorporation with the Secretary of State.
This article will show you how to set up and maintain your LLC in Georgia. LLCs are popular because they’re easy to form and have legal protections for their owners.
Step 1: Choose the Name For Your Georgia Company
When it comes to something as simple as choosing your Georgia LLC name, you may be surprised to learn that there are many rules around the business naming process. Here are a few guidelines to help you name your company:
- Names for LLCs cannot include words that are often reserved for government agencies.
- Your name can be no longer than 80 characters.
- The following words can trigger an automatic declination letter from the Georgia Department of Banking and Finance: banque, bank, banc, banker, banking house, banking company, bancorp, bankruptcy, etc.
- You must get approval from the Georgia Office of Insurance and Safety and Fire Commissioner to use one of these words: insurance, surety, assurance, fidelity, reassurance, reinsurance, or indemnity.
- You must get approval from the Georgia Nonpublic Postsecondary Education Commission to use’ university’ or ‘college’ in your name.
Ask a lawyer if you’re not sure of a name’s propriety. You can find guidelines for naming your LLC on the Georgia Secretary of State’s website. You may also want to read the Georgia statute covering LLC names.
Step 2: Find a Georgia Registered Agent
To create an LLC, one should pick a person or organization to be their registered agent. This individual will accept official documents for the business and keep them coming in and accept court notices for that company. The registered agent’s address is called the registered address or registered office.
When choosing a registered agent for your Georgia LLC, ensure that they are available during regular business hours and maintain a physical address.
If you’re going to form an LLC in Georgia, consider using a service provider who can create the LLC and find a registered agent for your business. The service is often available for a low monthly fee and assists with your business paperwork.
Step 3: Obtaining Your Georgia Business Licenses
You need a general business license from the city or county to operate in Georgia. In addition, special licensing is required by specific industries.
Before establishing an LLC with employees, business owners must apply for Georgia workers’ compensation insurance and a Georgia state taxpayer identification number.
A statewide fictitious business name or DBA filings are not required in Georgia. Still, if you operate under a trade name different from your legal name, you can go to your county’s superior court clerk for a registration statement.
Step 4: Filing Your Georgia LLC’s Articles of Incorporation
You need to file the Articles of Organization, which contain company information and authorize your company to operate before you can formally set up your Georgia LLC, which you can file online or in person, as long as you pay the $100 online filing fee ($110 if it’s mailed or done in person).
Georgia’s form for domestic LLCs is relatively short and easy to fill out. However, it would be best to have the LLC’s name and the person filling out the form’s signature, which can be a member, organizer, or lawyer for the LLC.
Suppose a business owner decides to turn in the articles of organization by mail. In that case, they will also need to file a transmittal form, including information such as the company’s legal name, address, and members.
Within five to seven business days, the state will mail you a Certificate of Organization to confirm your filing, which can take up to 12 days in rare cases.
If you have a foreign LLC form, you need to fill out Form 241 for the Certificate for Authority of Foreign Limited Liability Company. The filing fee is $225 if done online and $235 if mailed or done in person.
Step 5: Drafting an LLC’s Operating Agreement
An LLC operating agreement is a contract between the members of an LLC that outlines the rights and responsibilities of each member. It also leaves clear instructions on handling finances, what happens when one owner dies, and other important situations.
If you want to avoid conflict within your business and protect your interests, getting an LLC operating agreement should be high on your list — although it isn’t mandatory.
There are a few key things that your LLC operating agreement should cover:
- The roles and responsibilities of each member
- How the LLC will be managed
- How decisions will be made
- How profits and losses will be distributed
- What happens if a member leaves the LLC
- What happens if the LLC is dissolved
You can either draft your own LLC operating agreement or hire an attorney to do it for you. If you choose to draft it yourself, a few resources can help, including the Small Business Administration’s website and books like The LLC Operating Agreement Book: An Expert Guide to Drafting Operating Agreements for Limited Liability Companies.
Step 6: Choose Your Tax Entity
Georgia LLC taxes depend on how LLCs decide to be taxed. LLCs are taxed as sole proprietorships if they have only one member and as partnerships if they consist of multiple members. Therefore, income is divided among the partners and reported on their individual tax returns.
If a business chooses to be taxed as a corporation, it is subject to income tax. In addition, the company also may have to pay taxes on the net worth of its assets.
Georgia companies are responsible for paying payroll taxes in addition to income taxes. The payroll tax rate varies from 0.04% to 8.1%.
There is also a sales tax of 4% in Georgia, which you should be aware of if you’re selling products or services. There are additional local taxes throughout the state.
Step 7: Get Your EIN
To obtain your tax identification number in Georgia, you have to fill out an SS4 form and send it to the IRS. If you are experienced filling out government forms, it shouldn’t be a complicated process to complete and submit form SS4 yourself.
However, this leads most people not to fill out the application form themselves, and instead, they hire a company.
With a company, you’re less likely to get rejected by the IRS when you fill out your forms, and there is one less worry for small businesses throughout Georgia.
You can get an EIN online yourself by following the IRS process online.
Step 8: Remember to File Your Annual Report
Companies are responsible for filing an annual registration statement with the secretary of state. This process is required to maintain up-to-date information, such as a registered agent, registered office, and business address. Filing the statement online has a $50 fee, while forms can be mailed in for no additional fee.
If you want to update your information, you should file an amended annual registration statement.
If your company has a Georgia LLC, you must file with the secretary of state once a year to keep the business information up to date. You may file online or print an application form and mail it in. The filing fee for annual registration in Georgia is $50.
Once your registration statement is submitted, if any relevant information changes (e.g., such as your registered agent), then you must turn in an amended annual registration statement with a $20 fee.
Step 9: Ensure Federal Compliance
In Georgia, LLCs will have to comply with state laws and federal laws. For example, if an LLC is organized as a corporation and has employees, it must apply for a federal employer identification number (EIN) for tax purposes.
You will have to pay federal income taxes and payroll taxes in Georgia.
Employers have to pay taxes on Medicare and social security. 7.65% is the payroll tax on Social Security, while another 7.65% goes toward Medicare. These taxes cover a business worker’s social security and medical coverage.
Cost to Start an LLC in Georgia
It will cost you $100 to file the Articles of Organization. For $25, you can reserve your LLC name with the Georgia Corporations Division.
Filing on your own is often cheaper than hiring a lawyer, but you can save money by using an online filing service while maintaining the same quality. Many people choose to use an online filing service due to its convenience, speed, and low costs.
The total cost to start an LLC in Georgia without a lawyer or service provider will be $125. Additional charges may include:
- A Registered Agent Service, usually around $50 per year
- Filing Fees, at $50 per year
These are just estimates, though. The actual costs for services will vary.
What To Do After Forming Your LLC in Georgia
After forming your LLC in Georgia, you will need to keep your LLC in good standing with the Secretary of State by filing annual and biennial reports and paying the required fees. You will also need to comply with all state and federal laws and regulations.
Finally, it would help if you considered operating your LLC as a separate legal entity from your personal finances, which entails opening separate bank accounts. Doing this will help protect your personal assets from liability for debts and obligations of the LLC.
See the Georgia Secretary of State’s website for more information.
How to Keep Your LLC Compliant in Georgia
Keeping your LLC compliant in Georgia is vital to maintain your business status and avoid penalties. To keep your LLC compliant, you must file an annual report and pay the annual registration fee. You must also keep your LLC’s registered agent information up to date.
If you need help keeping your LLC compliant in Georgia, you can hire a lawyer or an online service to assist you with deadlines and paperwork.
How to File an LLC Annual Report in Georgia
Every LLC in Georgia is required to file an annual report. You must file the annual report with the Georgia Secretary of State. The annual report is due by April 1 every year. To file your annual report, you will need to provide the following information:
- The name and address of your LLC
- The name and address of your registered agent
- The name and address of your principal office
- The names and addresses of your members and managers
- The name of your LLC’s authorized representative
- Your LLC’s federal tax identification number
- Your LLC’s Georgia business license number
You will also need to pay a filing fee of $50. The annual report can be filed online, by mail, or in person.
Tax Filing Requirements for LLCs in Georgia
If a Georgia LLC wishes to be taxed as an incorporated entity, the LLC will also be required to pay the Georgia franchise tax. The annual report filing fee is $50.
All LLCs with more than $5,000 in annual revenue must file a sales and use tax return. LLCs with less than $5,000 in annual revenue may file a sales and use tax return but are not required.
LLCs that engage in retail sales or lease property in Georgia must obtain a state sales tax license. The license application fee is $50.
Frequently Asked Questions
Here are a few answers to frequently asked questions about Georgia LLCs.
How long does it take to register a Georgia LLC?
Processing time for an order is typically 15 business days. Processing in 2 business days costs an extra $100. Processing on the same day (submitted by noon on any weekday) costs an additional $250.
What tax structure should I choose for an LLC in Georgia?
Taxes for a Georgia LLC depend on the type of LLC and the members involved. A default tax is a sole proprietorship for single members or a partnership if there are multiple members, but other choices exist.
Should you hire an LLC formation service in Georgia?
There is no requirement to hire an LLC formation service in Georgia, but doing so may save time and ensure that the formation process is completed correctly. You can read our recommendations for the top LLC services for some good options.
Filed under: Georgia Business Guides