LLC Georgia - How to Form an LLC in GA
Establishing a limited liability company has many advantages, which are often too tempting to ignore. For instance, owners have limited liability compared to a sole proprietorship, and responsibilities of a limited liability company are much easier to handle compared to a corporation.
Similarly, Georgia law allows LLC to select different models of profit distribution. Such varying form of profit distribution makes it easier for owners to streamline their business operations according to the respective roles of individual owners. Unlike a common partnership model, members of Georgia LLC can split the profit in the desired percentage without any limitations.
In Georgia, a limited liability company is not required to keep formal minutes. It means that owners and partners are not obligated to attend and record meetings, which makes running LLC much easier.
Here are the steps that will guide you on how to form an LLC in Georgia:
- Choose the name of your company
- Prepare Articles of Incorporation for LLC Georgia
- Name a registered agent
- Register your business with state revenue service
- Obtain Business License
- Pay Annual Registration Fee (Post-Registration)
- Request EIN (Post-Registration)
Choosing the Name of Your LLC Company
Georgia has its own rules and regulations regarding how you can name your limited liability company. From an owner’s perspective, you can select the name of your company if it is unique and none of the other companies own the name. Officially, every limited liability company has the abbreviation LLC at the end of its name.
There is often some confusion about the uniqueness of names. When registering a business name most U.S. States such as Georgia will allow you to register a name if someone else hasn’t registered that name in Georgia. In fact, you may be able to register the name of your company in Georgia even if there is another company with the same name in another State.
For instance, if your LLC is named, WXYZ Limited Liability Company, it will still be unique if someone else has the same company name in another state. The only thing you need to ensure is that the name is unique in Georgia. You can’t register your company if there is another business in Georgia with the same name.
Still, business experts suggest that a truly unique name will ensure that you do not enter into legal repercussions once your company extends to other States or it becomes a nationwide chain. If such a business expansion occurs, you will likely enter into legalities associated with the name change and brand identification. Therefore, if you seek to open a new business in another state, it is better to come out with a unique name that will help you extend your business beyond the state of Georgia.
According to state legislation, every company name should be less than 80 characters including punctuation and special characters. When registering, make sure that you understand the requirements because the name will be rejected if you do not abide by the instructions.
For convenience, you can visit the Georgia LLC search database at https://ecorp.sos.ga.gov/ to check if your name is available for registration. If the name is available, you may file papers to register it instantaneously or reserve it before making a decision. If someone has an identical name that exactly matches your name, the database will not allow you to register it. In certain circumstances, you may also not register a specific name, which is very similar to another name. Usually, it happens if there are legal proceedings against a particular name.
You can also reserve your name on the website, which will ensure that your name is reserved for you if you are still brainstorming ideas on giving your company a unique name. Mostly, you don’t need to reserve your name unless it is a popular name that you think may be taken by another individual or entity. For name reservation, you will need to request authorities to reserve the name. The process may take a week to initiate, and you will also need to pay $25 for name reservation.
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Prepare Articles of Incorporation
After deciding and registering the name, it’s time to prepare articles of incorporation. Sometimes, articles of incorporation are also known as articles of organization. Articles of Incorporation are official papers that specify the name of the company, its owners, type of business, and other legal information. You can download the forms from the official website of Georgia; however, if you’re not sure you can also get help from a reputable professional service to help you fill the pertinent forms.
Once done, articles of incorporation will be the official proof that your company is registered in the state of Georgia. You can also ask a professional company to file articles of incorporation, especially if you have more than one member in LLC. Instead of filling these forms online, you can mail them to the authorities. Irrespective of the mode of communication, you will be required to pay a separate fee for incorporating.
If it’s the first time you’re registering LLC, it is better to consult a professional because experts can easily sort the paperwork for you by charging a nominal fee. Since the formation of a company is an important milestone for many of us, it pays to ask questions and get answers to important issues by asking someone who is adept at establishing LLC.
Once the article of incorporation is completed, it can take more than a week to get an official answer from the state authorities. Mostly, the process is very streamlined because you will get your incorporation certificate within a matter of days. You can display the organization certificate in your office or keep it at a safe place for your records.
Following is a detailed explanation of contents required to complete article of incorporation:
Georgia LLC Cost
To establish a limited liability company, you will need to pay a fee of $100 to register the company. This fee is separate from the fee that you pay to register the name of the company. Compared to some other states, Georgia does not charge high fees to register your business. For instance, in some states such as California, you will need to pay $800 to register a franchise.
In general terms, articles of incorporation are simple papers that anyone can fill within a few minutes. As such, you are required to disclose information that includes the name of the LLC, the name of the owners, and the address of the company and the registered agent. While it is very easy to file such documents, it is better to consult with a professional company if you’re filing articles of incorporation for multiple partners. Due to the importance of these papers, it is usually cumbersome to change details once you have filed the original papers.
Name a Registered Agent for LLC in Georgia
A registered agent is someone in the state of Georgia who can accept all the legal documents on behalf of the company. The registered agent must have a physical presence in the state of Georgia. You cannot designate a registered agent with a P.O. Box.
If you live outside Georgia or you operate an online website that has its headquarters in Georgia, you must also name a registered agent who has a physical address in Georgia. For online businesses, registered agents can help them keep track of their mails and provide additional services to achieve the company’s objective. These days, you can easily find a reputable company that offers registered agent services to businesses and entrepreneurs from around the world at a nominal cost.
Who can be a Registered Agent?
A registered agent can be anyone who has a physical address. You can even pick an individual to be your registered agent. A member or an employee of a company can also act as a registered agent if they are over 18 years of age. In addition, you can also hire an outside agent to act as your registered agent. Most professional companies that help you register the business also offer registered agent services.
Why Registered Agent is Important?
The role of the registered agent is to collect and maintain the legal documents of the company. Due to the importance of this role, you should be careful when designating someone to act as your registered agent because the agent must be present at the address 24 hours a day, 365 days a year. If you have a running business, you can’t afford your registered agent to go on a long vacation because you will likely miss your mails and other important documents. Besides, the registered agent has a lot of other responsibilities apart from sorting mails.
Some of the important duties of a registered agent include notifying the important members of mails and documents that require their immediate attention. Sometimes, registered agents are also given additional duties to safeguard important paperwork such as keeping records of an article of incorporation. Professional registered agents provide online access to owners enabling to keep in touch with the agent any time of the day.
Most often, a registered agent is busy as they need to sort and email tax documents, legal papers, and other important files. It is one of the reasons that most companies do not want an individual to act as a registered agent. According to the state legislature, a registered agent must be present to receive legal documents of a company in a timely manner. Most individuals are busy taking care of other tasks, which can make them forget their duties related to a registered agent.
If you don’t have a registered agent, you can quickly lose your LLC status because the law requires LLC to appoint a registered agent. Failure to comply with the rules can have severe negative repercussions for the company and its owners.
According to experts, an LLC functioning as its own registered agent may not be able to enjoy the privacy enjoyed by other LLCs that choose other companies to serve as registered agents. For instance, LLCs that do not use another company or the person as the registered agent of the company can face an awkward situation if the documents of claim are delivered in front of customers, suppliers and customers.
Create an Operational Document (Optional)
An operational document establishes an organizational structure, duties of respective members, the role of each member, goals, and objectives of the company. You don’t require an operational document for an LLC; however, if you have more than one member in the company, it can be very beneficial to submit a brief overview of the authorities. During legal battles, such operational documents can come handy because they can highlight the responsibilities and duties of each member.
Register your Business with State Revenue Service
For a Georgia LLCs to file tax returns they must register with the Georgia Department of Revenue. To register, you must complete the state tax registration application form CRF-002. In order to complete the registration process, you will be asked to provide your social security number or EIN of the registered company.
You will also need to provide the location and physical address of your company. If you’re an online business, you can easily get a physical address with the help of your registered agent. Usually, online businesses and out-of-state entities use the physical address of the registered agent.
The Revenue department will also ask you to identify the start date of the company. You can find such dates in article or incorporation or on the business certificate. The contact information for the managers of your LLC is also needed. According to Georgia’s law, a single owner can be the owner and the manager of a company, simultaneously.
Obtain a Business License or Operating Permit for your Business
Depending on the location of your LLC and the type of business, you may need to apply for additional permits and licenses from the state and local governments. For example, a restaurant would need health and safety permits, and a doctor will require a pertinent license from the authorities. Often these licenses and permits are displayed in the offices.
The fees will also vary depending on the type of permits and licenses you need. It is illegal to start a business without obtaining such permits. You may ask a business professional or the company representing you to see if you require such licenses from the state of Georgia.
Local Small Business Administration SBA and Chamber of Commerce can also guide business owners in the right direction. If you think you will require a license, it is better to pay a professional company to register your business because of these companies have the know-how on such business requirements.
Annual Registration Fee (Post Registration)
Once the filling requirements are taken care of, there are other important considerations for you to understand. For instance, you will need to pay an annual registration fee for your business once every year. Unlike the initial registration fees paid to register the business, the annual registration fee is the fees that all LLC registered in Georgia must pay on an annual basis.
Please note you will need to pay the annual registration fee irrespective of the status of your business. It means that you must pay $50 annual fee to the state for enjoying the privilege of Georgia LLC formation. If you’re not doing any business or you haven’t made any transactions, you will still need to pay the annual fee.
Many business owners forget that the annual registration fee is a part of doing business. You will need to pay the fee until you send a formal notice to the state that you are closing the doors on your business. If you fail to submit the annual registration fees, the state has the right to put you as a defaulter in the state. As a result, you will have a bad reputation in the business sector of Georgia if you conduct business in the state.
It is important to understand that the annual registration fee bill will be sent to the registered agent’s address. If you have appointed a third-party to act as your registered agent, it is the duty of your registered agent to mail you the annual state tax. In certain cases, the documents can also be emailed to you at your designated email. Once you receive the documents, you must file the annual registration fee.
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Request EIN, Employer Identification Number (Post Registration)
After registering the business, you should get an employee identification number for yourself. Getting EIN is optional, but it can give you many benefits as you grow your business. In fact, getting EIN is as simple as filling an online request. Also, if you have more than one member in your company, EIN becomes mandatory as every member must have an individual EIN for tax purposes. If you have an EIN, you will be taxed as a corporation and avoid double-taxation associated with the sole owner.
Besides tax, there are many other advantages to getting EIN. For instance, commercial banks and insurance companies require EIN number to open an account. Similarly, it can also prove useful in scenarios such as identity theft when you need to deal with the red-tape.
If you are the sole owner of a business, EIN is required to initiate business contacts with suppliers, partners, and other business community. Usually, the business community likes to interact with individuals who have EIN because otherwise the other party will be required to retain 28% of your payments for tax purposes.
By acquiring EIN, you can also represent yourself as a member of a company instead of a sole owner. In fact, there are almost endless advantages to getting EIN. If you employ workers, EIN is needed for every employee working in the company so you can withhold tax. EIN is also needed for workers who are employed by trusts, and non-profits.
You should get EIN because it is free, and it may take only a couple of minutes.
Steps to Obtaining EIN
As with every important company document, there are a few steps you need to follow to get your EIN number.
You will need to contact the IRS to acquire EIN. Either you can request EIN online or you can submit a formal application using fax, phone or registered mail. When calling IRS, you just need to provide the agent very simple answers to get EIN. If someone else is helping you register your business, they will usually take care of getting EIN for you.
Regarding EIN request, most of the questions are straight-forward and easy to understand. They include letting IRS know about the legal structure of your business such as a corporation, LLC, partnership, equity or sole proprietorship. Besides your business stricture, the relevant form will ask you to describe the reasons for requesting an IRS number. These reasons can range from forming a new business to requiring a commercial bank account. You will also be asked to provide your name and social security number.
At the end of the questionnaire, you will receive EIN that you can start using immediately. At the same time, you will also receive an official IRS document that confirms the successful completion of the application. It is advisable that you keep a copy of your records in case you ever lose it or need it as a reference.
Overall, establishing a limited liability company is extremely easy and cost-effective. Due to flexible state laws and the reputation of Georgia as a business-friendly state, you can set up a business within a few days.
Most professional companies can file papers to register a business for a nominal fee. They can also act your registered agent and help acquire any trade permits. These companies are an all-in-one shop for your business needs; therefore, review the fee structure of these companies before doing it yourself. In fact, if you can find a reputable professional company to assist you in filling the required form, you may save a lot of time because a tiny mistake may require a week or two to rectify. Hopefully, this guide will put you on the right path to achieve success. Check out our next guide on setting up LLCs in Hawaii.