How to Start an LLC in Georgia
The State of Georgia has a wide variety of industries, but agriculture, film, energy, automotive, and tourism are at the top of the list. If forming an LLC in Georgia is intriguing to you, there are some rules that you need to know about before heading south. This step-by-step guide explains all of the requirements and state laws you need to know about to establish a Georgia business.
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With 1 million small businesses located within its borders, Georgia can be competitive. These small businesses, many of which are limited liability companies, or LLCs, employ more than 1.6 million people, which make up almost half of all employees in Georgia.
Your Georgia LLC begins with creating a foundation of values, purpose, and standards for how the business will operate. One of the first things you need to do is pick a name and a registered agent and write an operating agreement. Here’s a closer look at the steps:
Name your LLC
Think you have the perfect LLC name? Check to see if it’s listed in the state’s business directory.
Georgia, like so many states, requires that your LLC name be unique from all other businesses in the state. You need to do some research to pick a unique name that suits your business. The first place to check is the Georgia Secretary of State website.
Georgia has a free name search feature so you can look at registered names. Enter the name you’d like to use to check on name availability. If the name is already registered, you can’t use it. If it’s not, it’s available.
It’s always good to do additional research by searching for your proposed name on search engines and social media.
You should also check for a matching domain name. For marketing purposes, you’ll want a domain or business URL that matches or closely matches your startup name.
It’s best to do this research before you register your business with the state of Georgia.
You can file a name reservation too. In Georgia, you can reserve a name for 20 days for a $35 fee.
Select a registered agent
Georgia requires you to list someone as a registered agent when you form your LLC. You can’t register your LLC without this information. A registered agent is a person who acts as your point of contact and receives official mail on behalf of the business. He or she might receive tax notices or service of process paperwork, for example.
There aren’t strict regulations on who can be a registered agent in Georgia. The business owner can fill the role, and so can a friend, a family member, a business partner, a member of your LLC, or an attorney.
This is a service you can hire out too. Registered agent services will take on this task for you, for an annual fee. They agree to receive important documents for your business and will notify you when something comes in.
To be a Georgia registered agent, you must:
- Be listed as the registered agent on the state registration form
- Be at least 18 years old
- Have a Georgia street address
- Be available during regular business hours
File Articles of Organization
Georgia requires that you file formation paperwork called Articles of Organization to establish your LLC. This document lists important information about the business and is filed with the Secretary of State, or more specifically, the Georgia Corporations Division.
You will need to provide certain Information when you file Articles of Organization for your LLC including:
- The business name
- The physical address
- Your registered agent’s name and street address
- Officer’s names and their mailing addresses
- The county where the business is located
- The number of shares the corporation is allowed to issue
Ready to fill out your business formation paperwork? Entrepreneurs can fill out and submit your LLC formation documents here.
The filing fee for processing the articles and registering your LLC in Georgia is $100. It can be paid by MasterCard, Visa, American Express, or Discover.
There are expedited filing services available for an additional fee ranging from $100 to $250, depending on whether you select two-day or same-business-day processing. All state fees are non-refundable.
You can also file by mailing in your paperwork or by having it hand-delivered. The state charges an additional $10 for processing paperwork by either of those methods.
Georgia processing time
The state doesn’t commit to a definite processing time as it is based on workload. Typically, those filing online will see their application processed in about a week. Expedited two-day processing and same-business-day processing is also available for those paying the additional fees. Those wanting same business-day processing must submit their paperwork before noon on a business day.
Create an LLC operating agreement
An operating agreement isn’t required by the state of Georgia, but it remains a key component of starting an LLC. This is a legally-binding agreement that sets all operational procedures for your business.
Most of all, an operating agreement protects your limited liability status, prevents misunderstandings among LLC members, and governs your business instead of rules falling to Georgia state law by default.
Anything not covered in the LLC will automatically revert to state law for direction, so you need to make sure everything is listed in order to avoid dealing with Georgia statutes.
Several items should be included in an operating agreement such as:
- The type of work your LLC will do
- A list of decision makers and who has voting rights
- Transferring a member’s interest
- Initial contributions
- Procedure for handling profits, losses and distributions
- Structure and management methods
- Compensation for members
- Methods for bookkeeping methods
- Procedures for dissolution
It takes a lot to run a business and it begins with how you set up the basics of your LLC from the beginning. Organization is key to getting things in place for federal taxes and state taxes. To help get organized, here’s a look at the thing you need to do to get up and running:
Get your EIN
A federal employer identification number is called an EIN. This is required for almost everything your LLC does from filing taxes to getting loans and hiring employees. It’s a social security number for your business.
You get your EIN through the Internal Revenue Service.
Be aware that getting an EIN should be one of the first things you do when creating an LLC. You can log on to the IRS website to get it. Simply log on, answer a few questions, and you get the nine-digit EIN, also known as a federal employee identification number, instantly.
There are a few circumstances where an EIN is not required. Sole proprietorships, for example, don’t need one. The following checklist identifies which businesses must have one. Businesses required to have an EIN are those that:
- Have employees
- File business tax returns
- Are listed as a multi-member LLC
- Are inherited or bought by you from someone else
- Offer a Keogh plan or solo 401(k) retirement plan
Need an EIN? Get your EIN by visiting the IRS website.
Open business bank accounts
Keeping separate bank accounts for business and personal use is an excellent business practice. It will help you during tax season, especially if there is ever an audit.
It can also keep others, including other LLC members, from accusing you of mishandling money or taking company money for personal use.
Managing operational expenses is easier if it remains in a separate checking account. It’s easier to collect information for accountants, loan officers, and other financial professionals when you are looking at buying, selling, or borrowing.
While a checking account pays for the daily business operations, a savings account can help your LLC save money to buy equipment, inventory, or pay for future expansion. It also can smooth out a ruffled cash flow and prevent checks from being overdrawn, which results in bank fees.
A growing LLC in Georgia also needs a credit card. Credit cards can be used to offset immediate payments required for equipment and inventory so it will help with cash flow. Many offer good incentives and rewards for businesses.
Review LLC tax rules in Georgia
Georgia is one of the better states as far as taxes go. The state’s corporate income tax rate is 5.75% and its state sales tax is 4%. Additionally, local communities can also impose a tax rate with a maximum of 4.90%.
Georgia’s tax credits
Some businesses qualify for tax credits in Georgia. Telecommunication and manufacturers that remain in Georgia for three years can qualify for an investment tax credit. Companies wanting to use new technology can qualify for a tax credit to pay for re-training employees.
Georgia has a Job Tax Credit that gives businesses credit for five years for every new job created. The credit ranges from $1,250 to $4,000 per year for each newly created job. It can lower payroll withholding obligations in some areas.
A Personal Protection Equipment (PPE) Tax Credit Bonus helps those that manufacture PPE and hand sanitizer in Georgia. Eligible manufacturers can get $1,250 in credits for each new job every year for five years.
Companies in the import and export business that uses a Georgia port can qualify for a Georgia Job Tax Credit or an Investment Tax Credit and the Port Tax Credit Bonus if it increases products through the ports by at least 10% when compared to the previous year or base year.
The Quality Jobs Tax Credit is available to all Georgia companies. Companies that create designated “high-paying jobs” may qualify for a higher jobs tax credit. Higher-paying jobs are those that pay at least 10% above the average wage of their home county.
Those in research and development can get a great tax benefit from the Georgia R&D tax credit. Businesses that quality includes many types of innovation beyond labs such as prototyping new products or testing equipment.
Georgia has more tax credits than this available including tax relief for film companies and the entertainment industry. Investigating any of these tax credits can find the money for your LLC.
File an annual report
The state of Georgia requires all business owners to file for annual registration renewal. Renewals can be filed on Jan. 1 but are due on April 1. You can file for one, two, or three consecutive years at once.
Georgia has easy, one-click annual registration renewals at the Secretary of State website. It costs $50 for an LLC to file an annual registration online and $60 if filing by mail. The late fee is $25.
The state will eventually administratively dissolve your business if you fail to register annually or pay the yearly fee. Once it’s administratively dissolved, you will need to either pay the back fees and submit to be approved or start fresh with a new registration using the same name or a different one.
You can file a Georgia annual report with the Georgia Secretary of State’s office.
Get insurance for your LLC
Insurance is one of those things a business can’t exist without. It not only protects the business but also protects the business owner or the members of the LLC. While an LLC does provide personal liability protection, businesses should still consider getting additional liability coverage, along with workman’s compensation.
Liability insurance is crucial as it protects you and your business during a lawsuit. If a vendor or a customer slips and falls at your business, for example, this kind of insurance provides a safeguard. Georgia doesn’t require businesses to have liability insurance, but most of those you do business with, especially other businesses, require proof of insurance with typically more than $1 million in coverage.
Workers’ compensation, unemployment insurance, and disability insurance are required by the federal government. However, the State of Georgia handles it from a regulatory perspective. Unemployment and disability are paid monthly to the federal government by the business and are paid to claimants either through federal agencies or through the Georgia Department of Labor.
Workers’ compensation comes as a private insurance policy the business must get from a local insurance agent. According to Georgia law, businesses with three or more part-time, seasonal, or full-time employees must get workers’ compensation. Failing to have it when you open and hire employees will result in a fine.
Additional resources to help you set up a business in Georgia
Those who need more help setting up their business in California have many resources to guide them and answer questions.
What is considered a small business in Georgia?
A small business in Georgia is one that is independently owned and operates with fewer than 300 employees. It can also be considered a small business if it earns less than $30 million in yearly revenue.
Can you run a business from your home in Georgia?
Yes, you can have a home-based business. Georgia law defines home occupation if it meets the definition listed in Zoning Ordinance Section 8.7.11. All home occupations must turn in a business location approval application and sign the Home Occupation Agreement.
Do I need a permit to run a remote or gig business out of my home?
Solo entrepreneurs, remote, and gig workers don’t need any special licensing or zoning permits, depending on the business, equipment, and traffic it generates.
Do I need a business license if I register my business with the state?
Yes, you will still need a business license. State registration just creates your business. Local cities and counties require a business license when you’re doing business as an LLC.
How do I get a tax ID number in Georgia?
You can register your business entity online through the Georgia Tax Center (GTC). It’s a secure self-service portal. You will receive your Georgia tax account number within 15 minutes by email after you submit your application.
How much is a sales tax permit in Georgia?
Georgia doesn’t charge to apply for a sales tax permit.
Do I need a business license to sell on Etsy in Georgia?
You don’t need to register with the state for this type of business. The local county or city may require you to have a business license or permit. Some federal agencies regulate certain businesses so it’s good to check with the federal government too.
Can I get help setting up my Georgia Limited Liability Company?
Yes, you can work with a company that offers formation services, like ZenBusiness. These companies can help you select a business structure, help you understand naming requirements, handle any LLC filings like Georgia Articles of Organization or a name reservation request, and even serve as your company’s registered agent.
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