Forming a limited liability company (LLC) can be intimidating, but it is not as difficult as many people make it out to be. There are a few simple steps that you need to take in order to form your own company.
Here's everything you need to know about how to form an LLC in Georgia and what the process entails so that you know your business is set for success.
Choose a Name for Your Georgia LLC
Choosing a name for your Geogria LLC is an important step. However, you have to keep in mind that some terms are restricted unless you provide additional documentation.
Terms like indemnity, insurance, reinsurance, indemnity, surety, assurance, and reassurance require the Office of Insurance and Safety Fire Commissioner's written approval.
If you want to use the terms associated with banking (bank, shares, loans, savings, etc.), you will have to obtain the Department of Banking and Finance's written approval.
Education-related terms (university, college, school) require the Georgia Nonpublic Postsecondary Education Commission's written approval.
To check whether your desired name is already taken, make sure to browse through the Georgia Secretary of State website designated for business search.
You can even reserve your LLC name for up to a year before you form your Georgia LLC. You will need to complete the LLC Name Reservation Form at a $25 filing fee.
Find a Registered Agent in Georgia
A registered agent in Georgia is a person appointed by an organization to act on its behalf.
Registered agent service is the company that registers with the state of Georgia in order to provide this important legal function for companies, nonprofits, and other business entities.
A registered agent provides many services, including but not limited to providing correspondence addresses to allow mailings from both within and outside the state of Georgia to reach you, serving as a designated agent for service of process in criminal and civil actions against your company, safeguarding assets by establishing an address where all legal papers will be sent.
A registered agent is very important if you are doing business within or outside of the state of Georgia because they provide peace of mind for you and your company.
File Articles of Organization for Your Georgia LLC
Articles of organization for your Georgia LLC are important, especially if you want to be able to operate in other states through a foreign LLC.
Articles of Organization contain information about the company and what sectors it operates in.
You can find forms and articles for articles of organization on the Secretary of State website. The filing fee is $100.
The procedure to file articles is very simple, and you can file them online or by mailing them to the Secretary of State. Your articles will not go into effect until you file your articles.
The articles will be effective for one year and then expire, but you can renew them by filing a renewal form for annual registration.
Create a Georgia LLC Operating Agreement
LLC operating agreement is a document that sets out the rights and responsibilities of managers and members of your Georgia LLC.
An operating agreement is not required by law, but it's highly advisable to have one because it will set out the rights and responsibilities within your business structure.
Georgia LLC operating agreements are written with legal language to protect the company and its interests as well as its members.
Among other things, the LLC operating agreement should contain information such as:
- The name and address of the company.
- A provision that requires members to pay any debts of the LLC even if they don't have enough assets or funds.
- Information about what happens when one owner wants to leave an LLC operating agreement.
It should state whether you can buy out their shares, how much it will cost, and when the LLC operating agreement ends.
- A provision that requires all LLC members to vote on major decisions such as selling company assets or merging with another company.
The LLC operating agreement should also have provisions for:
- LLC members who want to sue LLC operating agreement
- LLCs that need more than one manager
- LLCs with no managers
- How often the agreement is updated, and by whom
Get Your Employer Identification Number (EIN)
LLC owners need Federal employer identification numbers to open a business bank account or hire employees.
The Internal Revenue Service (IRS) and other government agencies use the Federal employer identification number to identify taxpayer information needed for tax purposes, especially in cases where individuals are not eligible for Social Security Numbers (SSN).
It is made up of nine digits and is also known as a Federal Tax ID Number.
The Federal employer identification number (EIN) can be obtained by completing an EIN application, which the IRS provides online at their website.
There are different requirements for obtaining this identifier depending on whether or not you have already filed an SSN with the Social Security Administration or if you are a nonresident of the United States and do not have an SSN.
Acquire Georgia Business Licenses and Permits
Once your business entity has been approved and recognized as a Georgia LLC, you will need to obtain business licenses depending on the industry and location of your business.
Permits and licenses may vary from city to city or even county to county, so it's best to stay informed.
For example, if your business operates in the field of alcoholic beverages, health, zoning, or sales, you will need to contact that specific city/county and check for additional requirements.
Business owners who want to set up a professional LLC will also need additional documentation.
The safest way to ensure you have all the permits for your professional LLC is to visit the Georgia Secretary of State website and browse through their list of boards and licensed professions.
File Annual Report
Annual registration is required to pay taxes and file a report with the Secretary of State. The annual registration process takes 15 minutes to complete online.
The annual registration fee is $50.
Annual registration may be required if:
- You've changed the LLC name, address, or your registered agent service
- There has been a merger between two entities owned by an LLC, and it needs to file as a domestic entity
How Much Does It Cost to Start an LLC in Georgia?
The cost of running an LLC in Georgia depends on many factors. The cost will largely depend on the type of your Georgia LLC.
Roughly speaking, the only initial investment you need to make is $100 for Georgia LLC Online Filing Fee and $50 for your Georgia Annual Registration Fee.
Georgia law requires additional licenses and permits for professional business formation, but the cost will depend on location and industry.
Lastly, if you are already an LLC owner but in a different state and want to expand your business to Georgia, you will need to register as a foreign LLC.
Registering a foreign LLC in Georgia is $225, and you need to file your registration through an Application for Certificate of Authority for Foreign Limited Liability Company (Form CD 241).
How Fast Can I Get an LLC in Georgia?
In most cases, obtaining the Articles of Organization from the Georgia Secretary of State can last for up to a week if you file online or twice that much if you file by mail.
However, acquiring legal documents for your limited liability company in Georgia will largely depend on the speed the Secretary of State processes your paperwork.
You can also opt for expedited filing at an additional fee. This will shorten the waiting time significantly.
Is Georgia a Good State for LLC?
Georgia is a good state to set up an LLC for several reasons, most notably for offering flexibility in how business owners can manage their business.
You can choose how you want to be taxed - as a single-member LLC (taxed as a sole proprietorship) or multi-member LLC, and a C corporation or S corporation.
LLC is a pass-through business entity, meaning that members are required to pay self-employment and federal income tax, even if the company made no business income.
However, choosing corporate taxation means that the business entity is required to pay federal corporate income tax, but the members will only have to pay the tax if they receive profits.
How Much Taxes Does an LLC Pay in Georgia?
It depends on the type of your Georgia limited liability company.
For example, if you set your Georgia LLC as a limited liability partnership or a sole proprietorship, only you (and other members) pay income taxes. In other words, LLC is not taxed, but its members are.
However, unlike single-member LLCs, C corps and S corps must pay both federal taxes (corporate income tax) and net worth tax. The corporate tax rate in Georgia is 6 percent.
Does Georgia Recognize Single-Member LLC?
Yes, Georgia recognizes single-member LLCs. In fact, you can opt for any type of LLC, depending on how you prefer to be taxed.
If you are not sure what option is the best for your business, make sure to seek legal advice and find a suitable registered agent service.
Can a CPA Firm Be an LLC in Georgia?
You can form an LLC in Georgia as a Certified Public Accountant, but you have to keep several things in mind.
Georgia law doesn't have a specific statute that explains the regulations for professional LLCs (surgeons, dentists, accountants, etc.). Still, it does briefly state that such business entities can operate in GA.
The chances are you will need to browse through the relevant state licensing board to see if CPA LLC approval is required to file for the state license and other legal documents, such as Articles of organization with the Georgia Secretary of State.
Read More: How Much Does a CPA Cost?
What Is a Domestic LLC in Georgia?
A domestic LLC in Georgia is an LLC that is set up and registered for the first time in Georgia.
Domestic LLCs and foreign LLCs (those registered in a different US state or country) need to follow different procedures to conduct business in Georgia.
Can a Minor Have an LLC in Georgia?
Yes, minors can have an LLC in Georgia.
However, it's best to check with the Georgia Secretary of State if a minor can be the organizer of the LLC or just a member because the statute has no specifications regarding this matter.
How Long Does LLC Filing Take in GA?
LLC filing in Georgia takes between one to two weeks, depending on whether you filed online, by mail, or in person at the State Corporations Division.
The quickest turnaround time is for those filings made online (usually between seven to ten business days).
However, you can opt for expedited filing for an additional fee.
As of July 2021, you can pay $100 for two business days of expedited service, $250 for same-day expedited service, and $1000 for one-hour expedited service.
Can I Be My Own Registered Agent in GA?
Yes, you can be your own registered agent in Georgia, but there are several things to keep in mind.
A registered agent must be of legal age, and their physical street address must be in Georgia.
A registered agent does not necessarily have to be a member of your LLC. It can also be someone from outside the business.
However, unless you know exactly what you are doing, we recommend hiring a professional, registered agent.
Georgia LLC Requirements: Conclusion
Starting an LLC in Georgia is easy, but you need to follow certain procedures and comply with Georgia law.
Georgia is a good state to form an LLC because it offers a low-cost filing process, no franchise tax, and minimal annual report requirements.
Additionally, there are no restrictions on the number of members, and you can have any type of LLC: a single-member LLC, multi-member LLC, or even an S corp.
All things considered, LLCs in Georgia are a great option for businesses of any kind.