As of March 2023, the U.S. Bureau of Labor Statistics reported that there were over 5 million employees in Georgia. The Georgia Secretary of State’s Office Corporations Division weekly report (04/26/2023) showed 1,436,687 active businesses in the state. About 1,082,917 of them are Limited Liability Companies (LLCs), 20,015 were partnerships, and 331,620 were profit, non-profit and professional corporations. As of 2022, Georgia had over 1.2 million active businesses. Approximately 99.6% of all businesses in the state are considered small businesses, with about 1.7 million employees. That same year, large and small businesses in Georgia employed over 4.6 million individuals.
Starting a business in Georgia can be daunting, however, intending entrepreneurs can navigate the process by following the steps below:
- Get professional advice: Small business owners can get resources from government agencies and nonprofit organizations to help them on their business journey. For example, local partners of the U.S. Small Business Administration (SBA) offer business counseling to small business owners. Similarly, the Georgia Department of Economic Development makes resources available to small businesses in the state.
- Make a business plan: Develop a business plan that reflects the needs of the business. It should include information about the business and how the business will grow. A good business plan can help businesses acquire financing. Review the SBA “Write a Business Plan” resource for a good business plan.
- Select a business structure: Determine the best structure that fits the business. Choose either a sole proprietorship, LLC, partnership, or corporation.
- Reserve your business name: Founders who are not yet ready to register their business can reserve a business name with the Georgia Secretary of State (SOS).
- Register with the SOS: After choosing a business structure, the next step would be registering the business entity with the SOS. Note that sole proprietorships and general partnerships do not need to register with the SOS. However, all limited partnerships (LP), limited liability companies (LLC), and corporations conducting business in Georgia legally must register with the SOS.
- Open a Business Checking Account: Business owners can open business checking accounts that help separate their personal and business assets, simplify business tax processes, and enhance the management of business-related finances. A federal EIN, social security number, and articles of organization or incorporation may be required to open such accounts.
- Register with the Georgia Department of Revenue (DOR): Business entities may be required to register with the DOR, especially if they have employees, sell goods, or sell products like tobacco or alcohol.
- Register with the Georgia Department of Labor (DOL): The DOL requires some businesses in Georgia to pay unemployment insurance taxes, even if they have no employees. Businesses can use the DOL’s Online Employer Tax Registration portal to determine if they are liable for unemployment insurance taxes. Liable businesses should register with the DOL.
- Get funding: Startups with insufficient money to start their businesses can look for financing options like loans or grants. The funding type and amount a business can get depends on the business plan, the market, and the business structure.
- Insure your business: Business owners can get commercial insurance policies to protect their businesses and employees. Common business insurance policies available in Georgia are property, liability, workers’ compensation, auto, life, and health insurance. Only auto and workers’ compensation insurance policies are mandatory in Georgia. Other insurance policies may be required when applying for business or professional permits or licenses. Individuals like product suppliers, customers, investors, and lenders may require evidence of insurance policies. Review the Business Guide to Insurance provided by the Office of Insurance and Safety Fire Commissioner for tips for commercial insurance shopping.
- Apply for permits and licenses: Some businesses are legally required to obtain specialized permits or licenses at various levels of government before they can operate in Georgia. Businesses that sell alcohol, for example, are required to obtain alcohol licenses at the federal, state, and municipal levels.
Step 1: What Kind of Business Should I Start in Georgia?
Deciding which kind of business to start in Georgia can be quite challenging because of the plethora of businesses available in the state. The right business to start depends on various factors like budget, available time and resources, scalability, market size and demand, industry, location, passion, and interest. Decisions made when commencing a business will significantly impact the company’s future performance. Consult with an accountant, lawyer, or business coach who can help decide the best business to start in your locality.
How To Do Market Research in Georgia
As of March 2023, Georgia had 23,185 new business applications. About 1,507 applications were from corporations. All these businesses were expected to conduct market research before forming their businesses. Market research is how companies gather information about their target market and customers to verify the success of a new product. It helps businesses know the gap their products or services are supposed to fill. Individuals can conduct market research using existing sources or do the research themselves by going directly to consumers. The U.S. Small Business Administration provides a few methods of conducting market research:
- Focus groups
- In-depth interviews
Step 2: How To Write a Business Plan
A business plan is like a business resume which is a written and detailed description of the business. It includes information on the business goals, objectives, financial standing, resources, decisions, and plans. A business plan can target investors, clients, or the general public. A business plan is relevant for communicating business ideas to others to secure loans and attract capital or investors. It serves as a guide to keep business owners focused on the company’s goals and objectively evaluate the feasibility of a new business idea. A business idea provides an operating plan to help in the day-to-day running of the business and improves the success rate. Typically, a business plan should contain the following information:
- The business name, address, and phone number
- Name and contact information of the principals
- An executive summary: discuss what the company is and why it will be successful. Briefly discuss the mission statement, product or service, and basic information about the company’s leadership team, employees, and location. Business owners who plan to ask for financing can include financial information and high-level growth plans in this section.
- The business: This is the section where business management and marketing aspects should be discussed. It should include the following details:
- Description of Business: talk about the business type, business status, business structure, products, and potential customers.
- Products/Services: state the type of product or service the business is or will be offering. Describe the product features, benefits, why customers will want to buy, and the uniqueness of the product.
- Market Analysis: State the purchasers of the product, market size, industry outlook, segments of users underserved by the competition, and the opportunities these underserved individuals present.
- Marketing Plan: highlight what the business is selling, the target market, how the target market will be reached, and be motivated to buy. Also, talk about the product, pricing, and promotional strategies.
- Location: state the business address, if the building is owned or leased, and necessary renovations or modifications. Also, describe the property and why it is a good business location.
- Competition: list the business’s largest competitors, how the company’s operation will be better than the competitors, and provide statistics on the competitors focusing on their sales and profits.
- Management and operations: Discuss management qualifications and structures.
- Personnel: Discuss the current and future personal need, their skills, the training the business provides, if the people the company needs are available, their compensation, and the fringe benefits that will be provided.
- Application and effect of loan or investment: Outline the total investment the business need, how the loan/investment will be used, how it will make the business more profitable, and the loan repayment process,
- The business’s financial projections: This is where the potential profit of the business will be established. The capital the company needs should be determined and how it will be used. Also, Demonstrate the business can generate the cash to operate and repay loans.
- The business plan can include supplemental information or documents like historical financial statements, letters of intent, personal financial statements, facilities diagrams, resumes, reference letters, tax returns, purchase orders, and contracts.
Individuals seeking assistance writing a business plan can use the templates provided by most government agencies in Georgia. For example, the Georgia Department of Agriculture Food Safety Division provides a Food Safety Universal Business Plan template for Food Sales establishments.
Step 3: Do I Need a Business License in Georgia
Asides from registering a business with the SOS, most businesses often need local and federal operating licenses and/or state-level professional licenses. Sometimes, employees may also need to be individually licensed. In Georgia, business licenses are not issued at the state level. They can be obtained from the county and/or city where the business would be located. Contact the local chamber of commerce office or the county or municipal government to find out the agency that regulates business licenses in the county. An individual can determine whether their business requires a license at the state level by checking with the following agencies:
- Georgia Board of Dentistry (GBD)
- Georgia Department of Agriculture (GDA)
- The Georgia Composite Medical Board
- Georgia State Board of Pharmacy (GBP)
- Georgia Office of Insurance and Safety Fire Commissioner
- Georgia Department of Community Health
- Georgia Department of Banking and Finance (DBF)
- Georgia Real Estate Commission & Appraisers Board
- Georgia Secretary of State (Professional Licensing Boards Division and Securities Division
- Georgia Department of Revenue Alcohol & Tobacco Division
- Georgia Department of Early Care and Learning (DECAL)
- Georgia Department of Natural Resources Environmental Protection Division (EPD)
- The Georgia Department of Human Services (DHR) Residential Child Care Licensing (RCCL)
The requirements for obtaining a business license in Georgia may vary by county, agency, and business type. For example, persons, firms, or corporations conducting business in the Fulton Industrial District must obtain business licenses by applying for Business Occupational Tax certificates and paying the necessary fees and taxes required for the business.
Per O.C.G.A. § 36-60-6, no county business license will be issued to any county or municipal corporation required to obtain a state professional or business license until a copy of such licensure is presented. LLC, Corporation, or Limited Partnership businesses must submit copies of the Certificate of Organization / Incorporation and Articles listing all officers and agents issued by the GA Secretary of State. Per O.C.G.A. § 50-36-1, any individual applying for a business license to execute a signed and sworn affidavit verifying their lawful presence in the United States. Other acceptable secure and verifiable documents are a valid driver’s license, a U.S. Permanent Resident Card, or a U.S. Passport.
How Much Does a Business License Cost in Georgia
Every business must apply for a general business license from the county/city where the business is located, and many businesses need multiple licenses. The cost of a Georgia business license varies by business type and license type. For example, a Gwinnett County business license costs $80 for a Business/Occupation Tax Certificate and an additional $180 fee for a Certificate of Occupancy. Depending on the license type, the Department of Revenue charges varying business license fees. For example, a tobacco license costs $10 or $250, based on the business type. In contrast, an importer license fee costs either $500 or $1,000, depending on the type of beverage.
How To Register for a Sellers Permit in Georgia
A seller’s permit is called a sales and use tax permit in Georgia. Businesses must register for a sales and use tax permit online through the Georgia Tax Center (GTC) portal. The sales and tax permit registration can be done while registering a new or existing business with the Georgia Department of Revenue (DOR). During the business registration, filers would have to answer the questions about the Sales & Use Tax account after completing the “Verify your Address” section. After the online submission, a specific tax account number would be emailed to the filer within 15 minutes.
Step 4: How Much Does It Cost To Start a Business in Georgia?
The U.S. Small Business Administration estimates that most microbusinesses cost around $3,000 to start, while most home-based businesses cost between $2,000 to $5,000. The cost of starting a business in Georgia varies depending on various factors like business type, model, structure, location, licenses and permits, office space, equipment and supplies, legal costs, insurance cost, and taxes. Per Georgia law, all businesses are required to pay the following filing fees:
- Articles of registration filing fees: These fees are usually paid when registering a business with the SOS. The fee varies depending on the application methods. Online filing of Articles of Incorporation, Articles of Organization (LLC), and Certificate of Limited Partnership costs $100 each, and paper filing costs $110 each.
- Annual registration: online filing costs $50, while paper filing costs $60. However, the cost of annual registration for nonprofit corporations is $30 for online and $40 for paper. Foreign LLPs are expected to pay $25 for online filing and $35 for paper filing.
How to Get Business Funding in Georgia
Georgia business owners can fund their businesses through the following means:
How To Find Georgia Business Grants
Business grants are money awarded to businesses needing funding for growth, expansion, hiring, or development. A good place to begin searching for business grants is on federal and state databases. There are no state-wide grants available to businesses operating in Georgia. However, the Georgia Department of Economic Development lists federal grants business owners can apply for. A typical example of such is the Appalachian Regional Commission grants.
Can I Start a Business With No Money in Georgia?
Starting a business can be challenging, especially when no funds exist. However, it is possible to launch a business in Georgia with no money. Below are steps a person can take to start a business with no money:
- Research potential business opportunities
When starting a business with no money, the first thing is to research potential business opportunities. Look for businesses that require minimal startup costs, like service-based businesses, online stores, retail stores, and restaurants.
- Utilize free resources
Upon identifying potential business opportunities, looking for free resources is next. Aspiring entrepreneurs can find numerous resources on government websites that can assist them in making business decisions. For example, Local Small Business Development Centers (SBDCs) in Georgia offer various services, from business plan development to marketing assistance.
The next step is to look for opportunities to network with others. Attend local networking events to connect with potential customers, suppliers, and mentors. Intensing entrepreneurs can also speak with experienced entrepreneurs in their area to get insight into the necessary steps for success. They can also seek advice from successful businessmen doing well in the industry they want to enter.
- Negotiate free services
Negotiate free services by contacting vendors to inquire about discounts on services required to start the business. Vendors who cannot offer free services may be able to give products or services at a low cost.
- Leverage friends and family
Have family and friends on board to help with the business. Ask them for financial support or assistance with tasks like designing a logo or setting up a website.
How To Self-Fund a Business in Georgia
Self-funding, also known as bootstrapping, is when business owners use their personal funds to support their businesses. Founders self-fund by asking their family and friends for capital or using the money in their savings or retirement accounts.
How To Find Investors in Georgia
Investors are another way startups fund their businesses in Georgia. Investors are individuals or entities who put money into businesses for financial returns. Here is how to find investors in NC:
- Join a coworking space to network with others
- Ask friends and family
- Approach local business owners
- Talk to an established entrepreneur
- Contact local business schools
- Check online databases
- Start crowdfunding campaigns
- Place an ad in an industry trade magazine or investment publication.
How To Get a Loan To Start a Business in Georgia
Georgia entrepreneurs who want to retain total control of their businesses but lack sufficient funds to start can consider a small business loan. Consider having a business plan, expense sheet, and five-year financial projections to increase the chances of securing a loan. Having these tools in place gives an idea of how much the business will need to ask for and will motivate banks to give a loan to the business. Afterward, contact banks and credit unions to request a loan and compare their offers to get the best possible terms for the business loan. Businesses that have trouble qualifying for a business loan from banks and credit unions can consider applying for loans with the following organizations:
Individuals can get SBA-guaranteed loans to start or expand their businesses. To get these loans, borrowers must visit the SBA Loans page to find the loan that best suits their business needs. Enter a Zip Code on the Lender Match to find lenders in the area, then apply for a loan through the local lender. The lenders will approve and help the business owners manage the loan. Loans available for borrowers are:
- 7(a) loans: Businesses can use this loan for long- and short-term working capital, real estate purchases, refinancing existing business debts, establishing a new business or expanding an existing business, or purchase of equipment, machinery, furniture, fixtures, supplies, or materials. The maximum amount that business can receive is $5 million. Only businesses that meet the following requirement can qualify for the 7(a) loan:
- The business must be a small business (as defined by SBA) operating for profit.
- The business owner must be planning to or conducting business in the United States.
- The business must have reasonable invested equity and not be delinquent on any existing debt obligations to the federal government.
- The business must use alternative financial resources like personal assets before applying for a loan.
- The business owner must demonstrate a need for a loan and be willing to use the funds for a sound business purpose.
Businesses that meet the requirements above should gather the appropriate documents to apply for the loan. The necessary documents are SBA Form 1919, SBA Form 413, business financial statements, ownership and affiliations, business license or certificate, loan application history, income tax returns, business lease, business overview and history, and personal resumes of each principal. Additional documents may be required based on the purpose of the loan. Businesses can repay 7(a) loans with monthly payments of principal and interest. The payment will be static if it is a fixed-rate loan since the interest rate is constant. However, the payment amount for variable-rate loans may differ, especially when the interest rate changes. Review the Terms, conditions, and eligibility for more information on 7(a) loans.
- 504 loans: This program provides long-term, fixed-rate funds for the purchase/construction or improvement/modernization of assets that promote business growth and job creation. Such assets include land, utilities, new and existing facilities, streets, existing buildings or land, long-term machinery and equipment, parking lots, and landscaping. 504 loans are provided through Certified Development Companies (CDCs) certified and regulated by the SBA. The maximum amount for a 504 loan a business can receive is $5.5 million. Businesses needing the loan for some energy projects can get up to $5.5 million per project for up to three projects not exceeding $16.5 million. Only businesses operating as for-profit companies in the United States are eligible for 504 loans. Additionally, the business must:
- Have a tangible net worth that does not exceed $15 million
- Have an average net income that does not exceed $5 million after federal income taxes for the two years preceding their applications.
- Fall within SBA size guidelines
- Have qualified management expertise, a feasible business plan, and the ability to repay the loan.
To apply for 504 loans, the business owner should speak to a CDC in their area, which can connect them with a qualified lender. 504 loan repayment can be made through check, wire, or the Central Servicing Agent, usually by ACH monthly draws. The repayment maturity terms are 10, 20, and 25 years and the interest rate is 3 % of the debt.
The SBA makes funds available to designated intermediary lenders, which are nonprofit community-based organizations that administer microloans to eligible borrowers. The requirements for applying for microloans vary by intermediary lender. However, some type of collateral and the personal guarantee of the business owner may be required to get the loan. Business owners should contact an SBA-approved intermediary who can help them apply for the loan. The average amount a business can get in the microloan program is $13,000, and the maximum amount is $50,000. Proceeds from an SBA microloan can be used for working capital, inventory, or purchase of furniture, machinery, equipment, fixtures, and supplies.
This federal initiative is designed to support small businesses and manufacturers in Georgia. The state has an allocation of $199,616,860 to strengthen the lending program. Georgia’s SSBCI offers the following programs:
- Georgia Loan Participation Program (GA LPP)
- Georgia Small Business Credit Guaranty (SBCG)
- The Georgia CDFI Program (GA CDFI)
- The Georgia Venture Capital Program (GA VC Program)
- The Georgia Equity Direct Program
Typically, there are no grants for small-business startups in Georgia. However, many lending opportunities are available to new and existing businesses. The Georgia Department of Economic Development has resources where individuals can find a list of traditional and alternative funding, federal loans, and grants.
Step 5: Choosing a Business Structure in Georgia
Individuals intending to start a business in Georgia must choose a business structure. A business structure determines how a business is organized. The structure of a business affects the type of taxes a business will pay, the level of liability, and other legal considerations. Business founders can seek the services of specialized attorneys to determine which type of legal entity is right for them. Below are the common business structures in Georgia:
- Limited Partnership (LP)
- Limited Liability Company (LLC)
- Sole proprietorship
How To Start a Sole Proprietorship in Georgia
A sole proprietorship is a business organization owned and controlled by one individual. The individual owner is seen as the business both legally and for tax purposes. The sole proprietor alone controls the business bearing all liabilities and profits. The problem with this is that the death of the sole proprietor automatically leads to the end of the business.
In a sole proprietorship, taxes are reported on the owner’s personal income tax forms. However, the sole proprietor can change to other business structures to reduce taxes as the business grows. A sole proprietorship has no administrative requirements, but maintaining adequate records is good for tax purposes and the smooth running of the business. Founders do not need to register their sole proprietorship businesses with the Georgia Secretary of State (SOS). Most times, a sole proprietorship registration can be done at the county and/or city where the business will be located. Sole proprietors can only register with the SOS to incorporate their business or establish a limited liability company or a limited partnership. However, sole proprietorships must register with the Georgia Department of Revenue (DOR) for tax purposes. They must have a Georgia Tax Center (GTC) account. The following information is needed to set up the GTC account:
- A NAICS code (if any)
- Social security number (SSN)
- Current federal adjusted gross income (FAGI)
- The types of tax accounts for which the sole proprietor is registering.
Sole proprietors who have filed a tax return in Georgia can establish GTC accounts to access their individual income tax accounts. Here is how to do so:
- Go to the GTC website
- On the homepage, click on Sign up
- Log in to the Georgia Tax Center with a username and secured password.
- Go to the “I want to” section and select “See more links…”
- Select Register as a Sole Proprietor
- Follow the prompts to complete the registration
- After completing the registration, select See More links.
- Select Register New Tax Account
- Select the account types for which the registration is needed
- follow the prompts to register accounts
Individuals who have not filed a tax return in Georgia must complete a New Business Registration as a Sole Proprietor on the GTC website. Here is how to do this:
- Go to the GTC website and log in
- Select Register a New Georgia Business
- Go to the“Business Type” drop-down list and select Sole Proprietor
- Follow the prompts to complete the registration and sign up for a GTC account
How To Start a Corporation in Georgia
A corporation is a for-profit or nonprofit business entity with limited liability and is separate from its owners (the shareholders). This type of business organization exists regardless of the status of the individual shareholders. Per Georgia Code § 14-2-401, the name of a corporation must contain the word “company,” “corporation,” “limited,” or “incorporated,” or abbreviated as “ltd.,” “inc.,” “corp.,” or “co.” The name must be 80 characters, including spaces and punctuation. A corporation consists of the following players:
- Shareholders: In a nonprofit corporation, shareholders are called members. The shareholders are the owners of the corporation, and they elect the directors.
- Directors: They handle the general affairs of the organization and appoint officers
- Officers: they are in charge of the day-to-day runnings of the corporation.
An individual can hold more than one position in a corporation. This is very common in small corporations. The corporation’s officers, directors, or shareholders are not liable for the debts incurred by the business. “For-profit” corporations (excluding S corporations) are subject to “double taxation.” The corporation pays tax on its income, and shareholders still have to pay tax on the dividends they receive from the business. An S corporation is taxed more like a partnership, so it is not subject to double taxation. For tax purposes, they are considered as a “pass-through” entity. This means that the corporation is not taxed but that the income of the S corporation is passed to the shareholders who pay personal income taxes for their share of the business. A founder who wants to form an S corporation must meet certain eligibility requirements and make a special election with the Internal Revenue Service (IRS). These eligibility requirements include:
- The number of shareholders must not exceed 75.
- None of the shareholders must be a non-resident alien
- Only one class of stock is required of an S corporation
Legally, an S corporation is similar to other corporations. The organization, operation, and characteristics are the same. However, an S corporation differs from other corporations regarding taxation. In Georgia, forming a corporation requires registering with the Georgia Secretary of State (SOS) and Department of Revenue (DOR) and taking other actions required by the Code. All corporations registering with DOR must register as new businesses via the Georgia Tax Center (GTC). The following information would be required to complete the process:
- NAICS Code
- Contact email address
- The business’s legal name, location, and mailing address
- Federal Identification Number (if any)
- Business type (corporation or subchapter s corp)
- The name, address, and Social Security Number(s) of shareholders, partners, or officers
To register, go to the GTC website and log in. Select Register a New Georgia Business and follow the prompts to complete the registration. Registering a corporation with the SOS differs from that of the DOR. Individuals must prepare and gather all the necessary documentation before registering their corporations with the SOS. Individuals can register their corporations with the SOS via the following methods:
Online registrations can be done on the SOS’ online services page. Users must create an account and log in with their user ID and secured password. After logging in, select “Create or register a business.” then select “I am creating a new domestic business” and choose the desired domestic corporation: domestic profit, domestic professional, or domestic nonprofit. Fill out the required information about the business entity, including:
- The corporation’s name or a valid name reservation number
- The filer’s name and address
- A valid email address
- The mailing address of the principal office
- The registered agent’s name and address
- Each incorporator’s name and address
- Number of authorized shares for a profit corporation
The filing fee for online application is $100, payable by credit card (Visa, MasterCard, American Express, or Discover). The processing time is 7 business days. Applicants can expedite registrations by paying additional fees. For example, applicants must pay an extra $100 for 2 business days of processing time. Processing in the same business day costs an extra $250.
An applicant must draft an Articles of Incorporation. Review the sample in the Filing Procedure – Corporation for guidance. Complete the Transmittal Form – Corporation (CD 227) available on the SOS website. Mail the completed documents (articles of incorporation and transmittal form) and a $110 filing fee by money order or check to:
Office of Secretary of State
2 Martin Luther King Jr. Dr. SE
Suite 313 West Tower
Atlanta, GA 30334
The processing time for mail applications is 15 business days. Expedited processing attracted extra charges. For example, applicants would have to pay an additional $1,000 if they want their applications processed in one hour.
Applicants must draft their own Articles of Incorporation and complete a Transmittal Form – Corporation (CD 227). Afterward, they can visit the SOS Corporations Division to submit the forms alongside a $110 filing fee. In-person applications should be made from Monday to Friday (excluding state holidays between 8 a.m. and 5 p.m.
Provided all information is accurate, a Certificate of Incorporation will be sent to the applicants within the specified processing time. Each corporation must file an initial annual registration that lists three principal officers with the SOS within 90 days of incorporation. The filing fee is $50 for for-profit and professional corporations and $30 for nonprofit corporations. Any corporation created between October 2 and December 31 must file the initial annual registration of the next calendar year between January 1 and April 1. After the initial registration, the corporation must continue to file annual registration every year between January 1 and April 1. Refusal to do so may lead to the administrative dissolution of the corporation.
How To Start an LLC in Georgia
A Limited Liability Company (LLC) is a business entity that combines partnership and corporation characteristics. An LLC provides limited liability to its members like a corporation and a “passthrough” taxation like a partnership business. An LLC can only be excluded from “passthrough” taxation if it elects corporate treatment for federal tax purposes.
An LLC is owned by one or more members (interest holders), and any of them can exercise management rights. Members can manage the business or designate specific managers who may not be members to manage the business. Like a corporation, an LLC has a “perpetual” existence. This means that the business operations of an LLC can continue despite the death of one of its members. Ownership interests are transferred easily from one member to another. LLC owners only risk their investment and not personal assets in the business.
Per Georgia Code § 14-11-207, the name of an LLC in Georgia must contain the words “limited company” or “limited liability company” and can be abbreviated as “limited” or “ltd.” and the word “company” as “co.” abbreviations like “L.C.,” “LLC,” “LC,” and “L.L.C.,” are also acceptable. Additionally, the name of an LLC must not exceed 80 characters, including spaces and punctuation.
A one-member LLC is usually taxed as a disregarded entity. In contrast, a multiple-member LLC is taxed as a partnership unless it chooses to be taxed as a corporation. The income of an LLC that is treated as a partnership is apportioned to its owners and taxed at their personal tax rates. All LLCs in Georgia are advised to have an “operating agreement,” which need not be filed with the Georgia Secretary of State (SOS). This operating agreement helps determine the conduct of the business. It outlines the rights and powers of all LLC members, managers, and employees. LLCs who want to conduct business in Georgia must register with the SOS and Department of Revenue (DOR). Follow the following steps to register an LLC with the DOR:
- Go to the Georgia Tax Center website
- Click the “Register a New Georgia Business” link
- Select the Business Type from the drop-down list and follow the prompts. Click the Next button.
- Enter the Business Location Address and click the “Verify your address” button to validate the address.
- Enter a different mailing address (if different from the physical address), then click the Next button.
- Select the account(s) to register and Click the Next button.
- The following account types will prompt additional questions:
- Sales & Use Tax
- Withholding Tax
- Withholding Misc
- Withholding Misc Film
- Alcohol License
- Tobacco License
- Motor Fuel Distributor Tax
- International Fuel Tax
- Composite Tax
- Corporate Income Tax
- Public Service Commission
- Public Utilities and Airlines
- Qualified Timberland Property
- Railroad Equipment
- Transportation Services Tax
- Some account types require registration fees or tax payments during registration. Provide the payment information and click the Next button.
- Complete the “Additional Business Information” section, enter a NAICS code(s), and click the Next button.
- Click the “Add Officer/Responsible Party” link to add officers and/or responsible parties.
- Enter the “Officer/Responsible Party” information. To enter additional officers, click the “Add Officer/Responsible Party” link and click the Next button.
- Users may need to submit documents during registration for some account types. Click the Add Attachment hyperlink to upload the required documentation.
- Select the Type of attachment. Click the “Choose File” button to locate the file on a computer, and Click the OK button.
- Enter a Login, Password, Secret Question & Answer, and Contact Information for the person who will be using the login. Click the Next button.
- Review the summary of the request and click the Submit button.
- Click OK to confirm that the request has been submitted
- Write down or print off the confirmation number that appears on the page, then click OK.
Additionally, individuals must register their LLCs online, by mail, or in person with the SOS. The registration process and filing fees are the same as that of a corporation. However, the documents to be submitted for mail and in-person applicants differ. Mail and in-person applicants must draft their own Articles of Organization or download and fill out the Articles of Organization for LLC (CD 030) form from the SOS website. They must also complete the Transmittal Form — Limited Liability Companies (231). These two documents and the required fee of $110 (payable by check or money order) should be mailed or submitted in person at the SOS Corporations Division. Articles of organization will be sent to the filer within the specified processing time. The LLC must file an annual registration with the SOS every year between January 1 and April 1. Failure to do so attracts penalties.
How To Start a Business Partnership in Georgia
Pe O.C.G.A. § 14-8-6, a business partnership is an entity with two or more persons who are co-owners conducting business for profit. Partnerships are “pass-through” entities for tax purposes. All partnerships are required to be registered with the Georgia Department of Revenue (DOR). The registration is done online via the Georgia Tax Center. A business partnership comes in two types:
How To Form a General Partnership in Georgia
A general partnership comprises two or more persons (general partners) conducting business for profit. Each general partner can participate in partnership management and share in the partnership’s profits. All general partnerships are advised to have partnership agreements that encourage specificity or business operation. Note that this written agreement is not legally required. The interest of the business cannot be transferred without the permission of the other partners. A general partnership can easily be dissolved by a general partner’s death or withdrawal. Each general partner is held liable for the GP’s debts and obligations. They consider their share of the business’ income, losses, deductions, and credits in determining their personal tax liability. To create a GP, founders do not need to state filing requirements or register with the Secretary of State (SOS). The only obligations required are a trade name registration, permits, and a business license.
How To Start a Limited Partnership in Georgia
Per Georgia Revised Uniform Limited Partnership Act, a limited partnership (LP) is a business structure with one or more limited partners and one or more general partners. Per O.C.G.A. § 14-9-102, an LP’s name must include the words “limited partnership” or abbreviated as “L.P..” The distinct characteristic of the LP is that limited partners can invest money in the business and share in the profits without being held liable for the company’s debts and obligations. In Georgia, limited partners can participate in controlling and managing the business but do not share in the company’s liabilities. General partners also have equal rights to participate in managerial duties and have the power to bind the LP in transactions with third parties. A general partner has unlimited liability. To avoid this unlimited liability, most LPs make corporations their general partners. Some may limit the general partner’s liability by electing LLLP status by filing the required documentation with the SOS. The LP itself does not pay tax. Rather, each partner is taxed directly based on their respective share of the company’s profits. This does not apply to LPs who elect to be taxed as a corporation. LPs are governed by limited partnership agreements created by the partners. In Georgia, LPs are required to register with the SOS. Registrations can be done online, by mail, or in person. A mail or in-person submitter must draft the LP’s Certificate of Limited Partnership, complete a Transmittal Form — Limited Partnership (246), and mail or submit them in person alongside the required fees to the SOS Corporations Division. The Division will send the filer a certificate of limited partnership. The partners are expected to file an annual registration for their LP between January 1 and April 1 every year. The LP can be placed on inactive status if the partners fail to file annual registration for three consecutive years.
How To Start a Nonprofit in Georgia
Per O.C.G.A. § 43-17-5, all charitable organizations seeking to operate in Georgia must register with the SOS unless are exempted from registration pursuant to Georgia Charitable Solicitations Act. Registrants must submit Form C-100 and attach any of the following documents:
- Financial Statements (for organizations that have received any charitable contributions during the preceding fiscal year)
- No Funds Received Statement (for newly formed nonprofits or those who have not received any charitable contributions)
- IRS 990 Forms (IRS Form 990 or Form 990EZ)
- IRS Determination Letter for 501 (c)(3) Tax Exemption
The application packet can be filed through the online filing portal of the GA Charities Division or by mail. Mail applications should be submitted alongside the registration fee of $35 to:
Securities and Charities Division
Office of the Georgia Secretary of State
2 Martin Luther King Jr. Drive SE
Suite 317 West Tower
Atlanta, GA 30334
This registration is valid for 2 years from its effective date and must be renewed on or before its expiration date. Review the SOS “How-To Guide: Charities” page for information on charitable organization renewal, expiration/reinstatement, withdrawal, and amendments
Step 6: Choosing a Business Location
Choosing a business location is a vital step in business formation. This is because the location of a business determines the zoning laws, taxes, and regulations the business will be subject to. The U.S Small Business Administration (SBA) highlighted several things that should be put into consideration when choosing a business location:
- Costs, benefits, and restrictions of different government agencies
- Target market and business partners
- Region-specific business expenses
- Local zoning ordinances
- State and local taxes
- State and local government incentives
- Federal government incentives
What Kind of Business Can I Run From Home in Georgia?
Many Georgia cities/counties have adopted a home occupation provision in their code of ordinances to provide guidelines for individuals who want to conduct their businesses from home. Permitted home occupations typically have limitations or exceptions like the number of employees, automobile traffic, and parking. Common home occupations allowed in most Georgia counties are:
- Barber and beauty shops
- Musician’s and artist’s studio
- Photography studio
- Family day care home (not more than 6 children at a time)
- Tutoring (limited to four pupils at one time)
- Home crafts like model making, rug weaving, and lapidary work.
- Internet sales/mail order sales
- Professional advising and counseling Services
- Office facility of a salesman, sales representative, or manufacturers representative provided no manufacturing, production, or storage occurs on the premises.
- Office facility of an engineer, architect, insurance agent, lawyer, physician, real estate agent, land surveyor, dentist, computer programmer, broker, and other similar professions for consultation.
- Painting, sculpturing, composing, and writing.
- Telephone answering service and office service to include typing, bookkeeping, transcribing, and data entry.
- Operation of any wholesale or retail business conducted entirely by mail (excluding sale, shipment, or delivery of merchandise on the premises).
Prohibited home occupations in most Georgia counties are:
- Antique sales
- Medical doctors
- Private clubs
- Pawn shops
- Tire sales and storage
- Tanning salon
- Funeral services
- Tattooing, body or ear piercing
- Massage therapy, on-premises
- Special event facility.
- Ambulance service
- Restaurants and taverns
- Tow truck services
- Veterinary uses
- Automobile and related vehicular sales lot
- Major appliance repair
- Chemical storage and manufacturing
- Repair service (lawn mower, small engine, and appliance).
- Catering establishments (i.e., businesses providing contract services consisting of food and banquet preparations prepared internally and delivered to customers off the premises)
- Vehicle repair/mechanic’s garages and automobile detailing
- Commercial greenhouses or nurseries
- Automobile, motorcycle, boat/watercraft, and/or farm/construction equipment repair or service/maintenance, on premise.
Generally, businesses acceptable as a home occupation in Georgia counties differ. Therefore, it is recommendable to review the code of ordinances of a county before starting a home business.
How Do I Start a Small Business From Home in Georgia
Starting a small business from home is called home occupation in most counties in Georgia. A home occupation is carried out in residential dwellings, and the employees must be limited to the resident family members. In Georgia, businesses can operate from home if they meet zoning criteria and follow the county Home Occupation Standards. All home occupations must meet the following legal requirements:
- The smaller of 750 (1,000 in some counties) square feet or 25% of the floor space of the dwelling unit may be used for a home occupation.
- Individuals can use accessory buildings and structures for home occupation.
- No home occupation shall generate traffic, fumes, electrical interference, smoke, smell, noise, vibration, light, or dust that is offensive.
- Individuals should not have any signs on their property advertising the home occupation.
- Individuals engaging in home occupations must have the appropriate licenses (occupational and business licenses).
- Resident participants of the home occupation should not permit up to two clients or patrons on the premises simultaneously (excluding Family Day Care Homes where six clients are allowed).
- Vehicles kept in the home occupation premises should be used by residents only.
- All home occupations will be subject to periodic inspections by the Department of Development Services.
- Only residents of the household can be onsite employees for the home occupation.
- Off-site employees of the home occupation are prohibited from congregating on the premises or parking their personal vehicles at the location.
- Only goods and services produced on the home occupation premises should be sold, except for mail orders or home marketing services.
- No more than two home occupations should operate within a single dwelling unit.
- The transporting of goods by truck is not allowed.
- Individuals can use up to two vehicles for their home occupation, and only one vehicle should be parked at the site.
Any business that meets the requirements above can obtain an Occupational Tax Certificate from the Development Service Center in the county where the home occupation will be located. For example, first-time applicants must visit the Cherokee County Development Service Center to obtain a Home Based Occupation Tax Certificate. The following documents must be submitted alongside the required fees to retrieve the Certificate:
- Completed home occupation tax certificate application
- S.A.V.E. affidavit, included in the application packet (notarized)
- Private employer affidavit (included in application packet)
- Copy of Certificate of Incorporation if applicable (for corporations and LLCs)
- Copy of registration of business with Deeds & Records (if not a corporation or LLC)
- Copy of Professional State license (if applicable)
- Sales and use tax identification number (if applicable)
- Federal Employer Identification Number (if applicable)
- Proof of residential address like
- Voter registration card
- bank statement or utility bills issued within the past 60 days
- Employer verification or check stub stating name and address.
- Current valid rental contracts and/or receipts for payments made within the last 60 days for rent payments with valid Cherokee County residence address
- Deed, mortgage statement, homeowner insurance policy, or property tax bill for the current year
- Auto-insurance policy, including the applicant’s name and current residential address
- Georgia driver’s license (the license holder must also be present for identification)
Starting a Business Online in Georgia
An online business is an enterprise that involves selling and buying goods and services over the Internet. Individuals must obtain business licenses and permits from any County Development Service Center to start an online business. Also, if the online business involves offering professional services would have to get professional licenses. Any individual or entity operating a business online must register for a sales and use tax number and certificate of registration with the Georgia Department of Revenue. All online businesses (excluding sole proprietorships) must register with the Georgia Secretary of State (SOS).
Step 7: Legal Requirements for Starting a Business in Georgia
Below are the legal requirements that must be met before starting a business in Georgia:
- All businesses must register with the Georgia Department of Revenue
- LLCs, Corporations, and Limited Partnerships must register with the Georgia Secretary of State (SOS)
- The individual or entity must obtain a business license from the city/county where the business will be located. Per O.C.G.A. § 50-36-1, licenses are only issued to individuals 18 years of age and are U.S. citizens, legal permanent residents, qualified aliens, or non-immigrants.
- Some businesses may have to obtain professional licenses at the state level.
How To Get an EIN Number in Georgia
An Employer Identification Number (EIN) is a unique nine-digit number used by the Internal Revenue Service (IRS) to identify businesses for tax reporting. Businesses must first determine if they need EIN by reviewing the resources provided by the IRS before applying for one. Applications for EIN can be made online, by fax, or by mail. All fax and mail applicants must submit a Form SS-4 to the appropriate fax number or mailing address:
(For US applications)
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935
(For applicants with no legal residence or place of business in the US)
Internal Revenue Service
Attn: EIN International Operation
Cincinnati, OH 45999
Fax: (855) 215-1627 (within the U.S.)
Fax: (304) 707-9471 (outside the U.S.)
International applicants can apply for EIN by phone at (267) 941-1099. The calls can be made Monday through Friday from 6 a.m. to 11 p.m. (Eastern Time). Note that an EIN is not needed to register a business entity with the SOS but might be required for registration with the Georgia Department of Revenue (DOR).
How To Get a Georgia Registered Agent
A registered agent is an individual or entity residing in Georgia that a business designates to receive any service of process, documents, or other official communication on its behalf. The registered agent must be located at a street address in Georgia. Businesses cannot use post office boxes or “mail drop” as the registered agent address.
Georgia law requires all businesses to have a registered agent and registered office in Georgia. Businesses can contact their attorneys or hire professional corporate service companies as registered agents. A business can not be its own registered agent. Therefore, business owners, shareholders, or offers in a company cannot be registered agents.
Individuals or entities that can be registered agents for businesses in Georgia differ depending on the business structure and if the business is domestic or foreign. Information on registered agents is available on the following Georgia Code:
- O.C.G.A. § 14-2-501 and 14-2-1507 (profit corporation)
- O.C.G.A. § 14-3-501 and 14-3-1507 (nonprofit corporation)
- O.C.G.A. § 14-8-46 (foreign limited liability partnership)
- O.C.G.A. § 14-9-104 and 14-9-902.1 (limited partnership)
- O.C.G.A. § 14-11-209 and 14-11-703 (limited liability company).
Patents, Trademarks, and Copyrights in Georgia
Patents, trademarks, and copyrights are different types of intellectual property used by businesses to protect their brand, goods, and works legally.
A patent is a legal protection given to businesses for their technical inventions. Patents can be obtained for chemical compositions like pharmaceutical drugs, machine designs, or mechanical processes like complex machinery. Applications for patents must be made online on the United States Patent and Trademark Office (USPTO) website.
Per O.C.G.A. § 10-1-440, a trademark is a word, symbol, name, or device or any combination thereof adopted and used by businesses to identify goods they produce or sell which distinguishes them from goods made or sold by others. To register a trademark in Georgia, submit an application online or by mail. Mail applicants must submit an Application for Registration Trademark or Service Mark to the Corporations Division.
A copyright is a legal protection for original works of authorship produced by a business. To register a work, fill out an application form, pay the required filing fees, and a nonreturnable copy or copies of the work to be registered. Registration can be done online or by mailing the required forms to the U.S. Copyright Office:
Library of Congress
101 Independence Avenue SE
Washington, DC 20559-6000
Georgia Business Tax
The Georgia Department of Revenue (DOR) imposes taxes on businesses. These taxes differ by business type, structure, and location. Below are the common business taxes in Georgia:
- Sales and Use Tax
- Corporate Income and Net Worth Tax
- Withholding Tax
- Film Tax
- Motor Fuel
- Approved Software Providers
- Important Business Tax Updates
- Alcohol and Tobacco Taxes
- State Hotel-Motel Fee
- Fireworks Excise Tax
- Prepaid Wireless 911 Charge
- Non-prepaid 911 Charge
- Transportation Services Tax
Are Business Records Public in Georgia?
Under the Georgia Open Records Act, business records are public records. Therefore, anyone can inspect or copy property records unless they are specifically exempted from disclosure under the law. A business records search can be conducted online or in person at the Georgia Corporation Division’s Office. Although business records are public, some may not be publicly available. Per O.C.G.A. § 50-18-72(34), Any trade secrets obtained from a person or business entity are not subject to disclosure. Similarly, business records containing tax information are confidential (O.C.G.A. § 50-18-72(43)).