How to Form an LLC in Georgia: An 8-Step Guide – NerdWallet

If you want to reap the benefits of launching a small business in Georgia, you ’ ll necessitate to decide what character of business entity structure your ship’s company should have. Limited liability company ( LLC ) is a democratic structure among small-business owners because it offers flexibility, tax advantages and elementary requirements than a pot. This scout explains how to form an LLC in Georgia with bit-by-bit instructions.

How to form an LLC in Georgia

Forming an LLC in Georgia is relatively childlike. You ’ ll want to register your clientele with the Georgia secretary of department of state, who defines the rules and procedures for LLC formation in the state.

Step 1: Choose a name for your LLC

The beginning decision you ’ ll have to make its choosing a name for your company. You might already have a name in mind or might need to come up with one from scrape.

Name requirements

The list of your LLC must be distinguishable from other businesses that are registered with the Georgia repository of express. In summation, the name must end with one of the surveil words : limited indebtedness company, restrict company or the abbreviations LLC, L.L.C., LC or L.C. You can abbreviate limited as “ Ltd. ” or “ Ltd. ” and company as “ Co ” or “ Co. ” The use of certain words in your company name is prohibited and requires extra approval from the state. These include words associated with policy, bank and education. For model, you can not use any of the following words in your LLC ’ south name unless you have particular permission : insurance, security, bank, trust, college and university. You besides can ’ t practice words like “ pot ” or “ circumscribed partnership, ” which might suggest that the company is another type of business entity. Georgia ’ s LLC legislative act allows licensed professionals, like doctors and lawyers, to form LLCs. In some other states, there are restrictions on the types of businesses that professionals can start, but there ’ s no limitation in Georgia. Georgia doesn ’ deoxythymidine monophosphate recognize the Professional LLC ( PLLC ) as a legal business structure. Professionals can, however, form a professional corporation ( personal computer ).

Name reservations

once you narrow down a name for your commercial enterprise, you can head over to Georgia ’ sulfur commercial enterprise search web site to see if the name is available. If it is, you can reserve the business mention for up to 30 days by submitting a identify reservation request form, either on-line or by mail. There ’ s a $ 25 fee for name booking in Georgia. Keep in mind that reserving a appoint doesn ’ deoxythymidine monophosphate guarantee that the diagnose conforms to trademark laws or federal laws. If you have any doubt about a name ’ mho suitability, it ’ randomness best to consult a lawyer . source : Georgia Secretary of State

Step 2: Choose a registered agent in Georgia

The future step to LLC formation is to choose a register agent for your Georgia LLC. A register agent is a person or administration that accepts official mail and service of work on your company ’ second behalf. If the state or a legal claimant needs to contact you, they will use the register agent ’ s savoir-faire, which is called the registered position. A penis of the LLC can serve as the registered agentive role, but for hardheaded purposes, most companies use a business lawyer or register agent avail. If you use an individual as your Georgia LLC ’ randomness registered agentive role, they must be a nonmigratory of Georgia and available to accept mail during convention business hours. Every registered agent must maintain a read position in Georgia with a physical address ( no P.O. boxes ). Should you need registered agent serve, we recommend Incfile. It will include one class of detached register agent avail with LLC formation.

Step 3: Obtain Georgia business permits

In holy order to operate your business in Georgia, you ’ ll need to obtain a general business license from the city or county. Certain professional industries require special license. LLCs with employees will besides need to apply for a Georgia state of matter taxpayer identification number and workers compensation policy. Unlike many states, Georgia does not require statewide fabricated business name/DBA filings. however, if your business operates under a trade diagnose that ’ south different from your business ’ sulfur legal name ( e.g. Joe ’ south Bakery and Restaurant, LLC operating as Joe ’ s Bakery ), then you ’ ll need to file a registration statement with your county ’ south superior court salesclerk.

Step 4: File articles of organization and transmittal form

Until you file your articles of arrangement, your Georgia LLC international relations and security network ’ metric ton officially set up even. The articles of organization control basic formation and contact information for your company and authorize your company to operate in the state. You can file the articles of administration on-line or by chain mail, along with a filing tip of $ 100. The appropriate shape for domestic LLCs — those that are organized under the laws of Georgia — is Form cadmium 030. Compared to early states, Georgia ’ s articles of organization document is identical inadequate. All you need to note down is the LLC ’ randomness name and the signature of the person filling out the shape. That could be a extremity, director, lawyer for the LLC or another organizer. business owners who choose to submit the articles of constitution by mail will besides need to file a completed transmission form. The transmission form contains more information about the company, including the legal name, business address, penis names and addresses and registered agent information. A transmission shape is not needed if you file your articles online. Your business officially starts on the day that the secretary of submit receives your articles of organization. The secretary of department of state will process your filing and mail a security of organization to your business address within five to seven business days. occasionally, process can take up to 12 occupation days. If you formed an LLC in a different country and now want to operate in Georgia, most of the same rules apply, but you ’ re considered a extraneous LLC. In this case, you ’ ll motivation to fill out a unlike mannequin in stead of the traditional articles of organization. This form is Form 241-Application for Certificate of Authority for Foreign Limited Liability Company. The file tip for alien LLCs looking to do business in Georgia is $ 225 . source : Georgia Secretary of State

Step 5: Draft an LLC operating agreement

adjacent up on your list is to create an LLC operating agreement. Although Georgia doesn ’ deoxythymidine monophosphate ask LLCs to have an operational agreement, you should consider this an all-important step. An LLC operate on agreement lays out the rights, responsibilities and profit and loss shares of each owner in an LLC. even if you have a single-member LLC, an engage agreement is highly recommend because it summarizes the operate procedures of the LLC. This is where you turn to in order to document your meet agenda, voting rights and tax preferences.

Step 6: Pay taxes, and comply with other state requirements

Taxes for a Georgia LLC depend on how the LLC ’ s members choose to be taxed. By nonpayment, LLCs are taxed as lone proprietorships ( if single-member ) or partnerships ( if multi-member ), in which case business income and losses are reported on each business owner ’ s personal tax return. Each business owner pays Georgia income taxes on its plowshare of the business profits. If the LLC chooses to be taxed as a pot, then the LLC will have to pay an annual state corporate tax. LLCs taxed as corporations besides have to pay a net deserving tax based on the assets of the company. Remember, it ’ s not good income taxes that a company has to pay. Georgia businesses with employees besides should be prepared to pay payroll taxes. The Georgia payroll tax rate presently ranges from 0.04 % to 8.1 % on the first $ 9,500 of wages.

Step 7: File annual registration report

Georgia LLCs must file an annual registration instruction with the secretary of state. The aim of this annual file is to ensure that your clientele address, registered agentive role and file office information are up to date. The annual registration statement is due between Jan. 1 and April 1 of each year ( the first statement is due the calendar year following your year of formation ). You must either file your registration statement on-line or print a form from the web site to mail in. The file fee for annual registration is $ 50. once you submit your registration instruction, if any relevant business information changes ( e.g. such as your file agent ), you must submit an rectify annual adjustment affirmation with a $ 20 fee.

Step 8: Comply with federal requirements

LLCs organized in Georgia must comply not entirely with state requirements but besides with federal requirements. For exercise, LLCs taxed as corporations and any LLC with employees must apply for a federal employer identification number ( EIN ) for tax purposes. You ’ ll besides need to pay federal income taxes and payroll taxes. federal income taxes differ based on whether the LLC is taxed as a pass-through entity or pot. If your LLC is taxed as a pass-through entity, federal law allows you to deduct 20 % of your LLC ’ mho income before paying personal income taxes on any business profits. Corporations are taxed at a flat 21 %. Federal payroll taxes cover Social Security and Medicare. LLC members typically have to pay the employer and employee partake of these taxes — called self-employment taxes — on any distributions from the business. They besides have to withhold payroll taxes from employees and pay the employer tax on employee wages. presently, the employer tax for Social Security and Medicare is 7.65 %, and the employee tax for Social Security and Medicare is 7.65 %.

Advantages and disadvantages of forming an LLC in Georgia

Every state has unlike requirements for forming and maintaining a business. The well news is that you can form your clientele in any state, even if it ’ s not where your headquarters or chief office is located. Every state allows out-of-state, or “ foreign LLCs ” to do business in its department of state vitamin a long as the business pays taxes and complies with other state regulations. If you ’ rhenium plan on forming an LLC in Georgia, evaluate the pros and cons first :

Advantages

  • LLC members enjoy restrict personal indebtedness for commercial enterprise debts and obligations .
  • LLCs can choose their tax treatment .
  • Online file is available for all LLC forms in Georgia .
  • An LLC operational agreement international relations and security network ’ t legally required in Georgia ( though hush highly recommended ) .
  • Georgia has relatively low-cost LLC file fees ( $ 100 ) and annual registration fees ( $ 50 ) .

Disadvantages

  • Georgia LLCs taxed as corporations must pay an annual corporate tax and internet deserving tax .
  • Georgia payroll taxes are relatively high compared to other states for LLCs with employees .
  • LLCs require more paperwork than a sole proprietorship or general partnership .
  • It ’ mho hard to raise investor money for an LLC, compared to a pot .
  • The file tip for foreign LLCs in Georgia is relatively high gear ( $ 225 ) .

source : Incfile

If you need extra guidance, we suggest consulting a occupation lawyer or using a business constitution avail such as Incfile. Starting for equitable $ 49 plus state file fees ( $ 100 in Georgia ), Incfile will file all geological formation paperwork on your behalf, give you an electronic replicate of the filed paperwork and provide one class of free cross-file agent serve. For an extra tip, Incfile will even draft a custom LLC operational agreement for your company. A adaptation of this article was first published on Fundera, a auxiliary of NerdWallet .

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