LLC, short for Limited Liability Company, is one of the business entities that can operate in the state of Georgia. Like corporations, this business structure allows its owners some degree of limited personal liability. Like a partnership, it also provides the potential for some “pass-through” tax benefits. As a result, an LLC is effectively a hybrid between a corporation and a partnership.
The first thing to do is to get prepared, and this entails:
- A thorough investigation to determine whether an LLC is the best type of business structure to use.
- Determine whether the business is domestic (founded for the first time in the state) or foreign (already existing outside the state).
- Choose a registered agent who will accept any service of process, documents, or other formal communications on the company’s behalf.
The second thing to do is to gather what is needed, which includes:
- LLC name or a legitimate reservation number
- Name and address of the LLC applicant
- A valid email address
- The mailing address of the principal office
- Name and address of the registered agent
- Name and address of each organizer
- Any optional provisions you need to add to your articles of organizations
- Depending on how you apply, a payment method could be a credit card, check, cashier’s check, or money order.
The third step is to create and file registration.
- Online registration is possible by setting up a user account, providing the necessary information, and paying the filing fees through the Secretary of State Office. This step typically takes seven business days.
- The founder must prepare the Articles of Organization for an LLC and the Transmittal Form, both available on the Secretary of State’s website. Then, mail or submit the forms in person, along with the filing fees by check or money order, to the Secretary’s Office.
The entire LLC creation process may be summarized in 6 steps as follows:
- Step 1: Naming The LLC
- Step 2: Appointing a Georgia LLC Registered Agent
- Step 3: Satisfy Georgia LLC Filing Requirements
- Step 4: Apply for The LLC
- Step 5: Get an EIN Number
- Step 6: Register for State and Local Taxes
What Is an LLC?
A limited liability company (LLC) is a business structure that creates a separate legal entity for a corporation. In other words, the owner(s) of the business cannot be held liable for debts incurred by the company or money judgments rendered against the company as a result of legal action.
Additionally, LLC owners benefit from several tax advantages over owners of other business models. An intending owner can decide whether or not an LLC is best by consulting a knowledgeable attorney.
Step 1: Georgia LLC Name Search
To be sure that the name they wish to use for their firm has not already been taken by another, interested parties should first do a name search before registering an LLC in Georgia. This is a crucial step when attempting to register an LLC to make sure the desired company name is distinctive and complies with Georgia’s standards for LLC names.
The criteria for choosing a Georgia LLC name are listed below:
- According to Georgia law, a corporation, LLC, or limited partnership (“LP”), business name must be recognizable from the names of other companies on the Secretary of State’s records. This is the norm in close to 40 states. For instance, if “a,” “an,” or “the” are the sole differences between two names, they cannot be distinguished. It is impossible to tell “The Auto Store, Inc.” apart from “Auto Store, Inc.”
- Before some terms may be used in an entity name, the Secretary of State may prohibit their use, demand approval, or demand more information. Some words are subject to laws that are not under the Secretary of State’s jurisdiction. Persons who wish to incorporate using these words must provide a letter of authorization from the relevant agency with their filing. For instance, the Office of the Commissioner of Insurance must be notified in writing before using any of the following phrases in the name of an entity: “insurance,” “assurance,” “surety,” “fidelity,” “reinsurance,” “reassurance,” or “indemnity.”
The Secretary of State’s online business search can be used to conduct a Georgia LLC name search to see if the chosen name is already taken. It is not intended to act as a formal name availability search and is simply being used for research purposes.
Interested parties can select a business name and select a few variations after doing a name search and carefully considering name reservation rules. Applicants are given the option to select three names. This eliminates the need to keep submitting applications with new names if the original choice is already taken.
The Secretary of State’s Office will conduct a thorough name search after a person submits a request for a name reservation using the name reservation form. The agency will search the names provided in the stated order of preference if the first name is already taken. If a name is accepted, it is held in reserve for 30 days. After 30 days, if the applicant still wants to reserve the name, they must reapply and pay an extra $25.00 ($35.00 if filing in paper format).
The Office will notify the applicant by email, letter, or phone call if all three choices are chosen. Then, for an extra $25 ($35 if submitting in paper format), this person can reapply with three different name possibilities.
Step 2: Choosing an LLC Registered Agent in Georgia
A limited liability company’s (LLC) registered agent is a third-party agent who accepts service of process notices, government communications, and other formal notifications, such as litigation notices and tax filings, on behalf of the LLC.
They are also known as resident or statutory agents. Note the following requirements for a registered agent in Georgia:
- If the LLC does not have a physical address in the state where the LLC is registered, the LLC shall have a registered agent accessible to receive documents on the LLC’s behalf.
- The LLC’s registration state should be informed that there is a third-party contact person based there at all times.
- P.O. boxes are not acceptable addresses because a registered agent must maintain a physical street address in the state where the LLC is registered since a registered agent must be a real person.
- It is strongly advised, though not legally needed, to appoint a third party to carry out this crucial function. In reality, business owners can serve as their own registered agent. Having someone else in charge of receiving legal paperwork, however, ensures that deadlines and deliveries are never a concern.
- Regardless of whether a company is an LLC or a corporation, it is legally required to have the contact information of a business’s registered agents on file in every state to facilitate the easy receipt of litigation information.
- In addition to lawsuits, registered agents may also receive tax notices, subpoenas, and other kinds of mail. As a result, a registered agent may also be called a statutory agent or a process server.
How Do I Change Registered Agent for My LLC in Georgia?
Business owners can modify their registered agent by submitting an amended annual registration form to the Secretary of State Office. This request can take up to two weeks to process. Applications can be submitted online, in person, or via mail to:
Office of Secretary of State
Corporations Division, Name Reservation Request
2 Martin Luther King Jr. Drive Southeast
Suite 313 West Tower
Atlanta, Georgia 30334
Step 3: LLC Filing Requirements in Georgia
In Georgia, there are primarily two types of LLCs: domestic and foreign. The main distinction is that a domestic entity is one that is being established in Georgia for the first time. An entity that already exists outside of the State of Georgia is referred to as a foreign entity, whether it is in a different country or just another U.S. state. Both domestic and foreign LLCs must meet the same standards during filling.
- Name of the LLC or a valid name reservation number
- Name and address of the person filing for the LLC
- A valid email address
- Mailing address of the principal office
- Name and address of the registered agent
- Name and address of the manager
- A form of payment. Depending on how you apply, your form of payment will be one of the following: credit card, check, cashier’s check, or money order.
Do You Need a Georgia Address for LLC?
Yes, LLCs in Georgia must normally have a state-based principal office address. However, there are firms that can give the LLC a Georgia address in cases where the company does not have a physical site. A virtual office or mailbox service that can provide an address for the LLC’s legal requirements is one of these services, as is a registered agent service.
How To Get a Virtual Address for LLC in Georgia
The registered office must be a physical location in Georgia where the registered agent may receive service of process. Except where the registered agent can be personally served with documents, the registered office address may not be a post office box, post office drawer, mail drop, or rural route. The company’s major office or business location may serve as the registered office, but it is not required.
When selecting a virtual address for an LLC in Georgia, there are several factors to consider. Many virtual address providers offer postal handling services, such as package reception, letter forwarding, and scanning. Others provide co-working spaces, phone answering services, and conference room rentals, which may be a more affordable option for particular types of enterprises.
The LLC owner can compare plans and prices after investigating virtual mailbox providers, then sign up for the most appropriate one. Note, however, that a virtual address cannot be utilized as the registered agent for an LLC. Instead, each LLC needs to have a registered agent with a real street address in the state. A virtual address, however, can be used in place of a principal office address.
Step 4: How To File for an LLC in Georgia
Interested persons in Georgia can file for an LLC online, by mail, or in-person at the Georgia Secretary of State’s Office.
The online application involves the following steps:
- Applicants should visit the Secretary of State’s online services page
- Create a user account
- Select “Create or register a business. ” Choose a domestic limited liability company when starting a new domestic firm.
- Provide the necessary details regarding the business entity.
- Pay the $100 filing fee with a Visa, MasterCard, American Express, or Discover credit card that has been accepted.
To register by mail or in person:
- Create the Articles of Incorporation or download and complete the LLC articles of incorporation (CD 030) form.
- Complete the Transmittal Form — Limited Liability Companies (231).
- Submit or mail the completed Articles of Organization, transmittal, form, and $110 filing fee by check or money order to:
Office of Secretary of State
2 Martin Luther King Jr. Drive, Southeast
Suite 313 West Tower
Atlanta, GA 30334
How To Create an LLC Online in Georgia
Visit the Secretary of State’s online services page.
- Create a user account.
- Select “create or register a business.” Create a new, domestic business and choose a domestic limited liability company.
- Fill out the required information about your business entity (listed above).
- Pay the $100 filing fee by approved credit card: Visa, MasterCard, American Express, or Discover.
- Processing Time: 7 business days; Processing in 2 business days costs an additional $100. Processing on the same business day (if submitted before noon on a weekday) costs an additional $250.
Can You Have Multiple Businesses Under One LLC in Georgia?
Yes. It is possible and legal to operate more than one business under a single LLC. One LLC may be used to operate two or more enterprises as DBAs (“doing business as”). However, the names and finances of the businesses under this umbrella must be separate. Each business must also meet registration and licensing requirements relevant to it.
Note that between January 1 and April 1, LLC owners must file an annual registration form with the Secretary of State. Otherwise, the LLC will be administratively disbanded.
How Long Does It Take To Set Up an LLC in Georgia?
In Georgia, the processing time for setting up an LLC is dependent on the application method deployed by the applicant. The time for the online filing through the Secretary of State portal is seven business days. Online applications can be expedited to two days by paying $100. If the application is received on a weekday before noon, processing on the same business day will cost an extra $250.
For registration by mail, the processing time is 15 business days. An extra $100 is charged for processing in two business days. A further $250 is charged for processing the order the same business day (if it is delivered before noon on a weekday). Processing in an hour costs an extra $1,000.
For in-person requests, processing time varies. An extra $100 is charged for processing within two business days. A further $250 is charged for processing the order the same business day (if it is delivered before noon on a weekday). Processing in an hour costs an additional $1,000.
Step 5: How to Get an EIN for LLC in Georgia
A corporate entity is identified by an Employer Identification Number (EIN), also called a Federal Tax Identification Number. Most businesses require an EIN from the Internal Revenue Service. Interested persons may apply for an EIN. The applicant will receive their EIN right away after all validations are complete. Getting an EIN is free.
Step 6: Do LLCs Pay Taxes in Georgia?
LLCs are, by default, exempt from paying income taxes. However, their members must. In some circumstances, LLC owners elect to have their company handled for tax reasons like a corporation. Making this decision entails submitting IRS Form 2553 to the IRS.
How Are LLCs Taxed in Georgia?
The Georgia Department of Revenue is responsible for all tax related matters within the state. Unless otherwise specified for federal income tax purposes, domestic and foreign LLCs are categorized as a partnership for income tax purposes in Georgia. Only when an LLC is considered a corporation for income tax reasons is it subject to the net wealth tax.
Tax Benefits of an LLC in Georgia
LLCs in Georgia come with certain benefits:
- Georgia limited liability companies are taxed as pass-through entities by default. In essence, the LLC itself does not pay income taxes at the level of the business organization. The members, who declare their income on their personal tax returns, bear the tax burden as it “passes through” to them. Both state and federal income taxes are subject to this tax scheme.
- The “double taxation” of a conventional corporation, in which the profits of the firm are taxed both at the business level and again on the tax returns of the individual owners, is not present in pass-through taxes.
- Georgia does not have a franchise tax. A net worth tax applies, but it only affects the taxable income of corporations (or LLCs that choose to be treated as corporations for federal income tax purposes). The tax is not owed by non-corporate enterprises. All things considered, a Georgia LLC pays relatively little in state taxes.
- The ability to choose the tax status that is most advantageous to you is another tax advantage of creating an LLC. It happens automatically to be taxed as a sole proprietor (for single-member LLCs) or a partnership (for multi-member LLCs). However, the business may file for a C Company or S corporation tax status, depending on which is more favorable.
Do You Have To Renew LLC Every Year in Georgia?
Yes. Business owners must submit an annual registration form for their LLC between January 1 and April 1. Failure to submit this registration will cause the LLC to be administratively disbanded.
How Much Does It Cost To Start an LLC in Georgia?
Filing for an LLC in Georgia requires applicants to pay some fees for processing and for obtaining the needed documents. The $100 state registration fee ($110 for in-person or postal filings) is the main expense associated with forming an LLC in Georgia.
However, the expenses continue from here. Additional costs could include paying for an annual report, a registered agent, and, sometimes, company permits. For example:
- Articles of Organization: Online filing costs $100; hardcopy filing costs $110.
- Annual registration: $50 for online and $60 for paper filing.
- Certificate of Authority to Conduct Business in Georgia (for foreign LLCs): $225 for electronic filing; $235 for paper filing.
Can You Form an LLC In Georgia for Free?
No. LLC formation is not free in Georgia. Any applicant can reduce costs by managing some of the filing procedures, such as the job of a registered agent, which can be handled by any dependable friend or relative. The incorporation of an LLC always carries associated administrative costs.
How To Start an LLC in Georgia at Minimal Cost
Georgia LLCs cannot be formed for free, but there are ways to lower the costs. An applicant must cover all associated costs, including filing fees and registered agent fees when forming an LLC in Georgia. These fees must be paid in accordance with Georgia laws and regulations.
That said, the applicant can save money by using a close friend or relative as a substitute registered agent. However, per Georgia Rules and Regulations Rule 590-7-19(11), it is against the law for an entity to act as its own registered agent. Also, keep in mind that online filings are always less expensive than paper filings.
What Businesses Should Consider Forming an LLC in Georgia?
Small and medium-sized enterprises should choose LLCs in particular since they offer a more straightforward form and have fewer administrative burdens than corporations. An LLC also permits various ownership and management structures for businesses with multiple owners. In the end, practically any kind of business can create an LLC as long as it is legitimate and runs in accordance with the laws of the state where it was created.
What Are the Benefits of An LLC in Georgia?
The benefits of forming an LLC in Georgia are as follows:
- For enterprises of all kinds, whether it’s a one-person shop or a small firm with a team of employees, the benefits of an LLC include potential tax benefits as well as legal protection.
- A Georgia LLC can typically be created quite rapidly. This makes it a good solution for business owners looking to launch their enterprises quickly and effectively.
- An LLC also has the benefit of offering a high level of secrecy. Personal information about LLC owners is kept private and shielded from the public eye since an LLC is a different legal entity from its members. This helps to improve the company’s general trust and reputation while also providing protection against potential privacy violations. For people or corporations looking to maintain their anonymity in commercial operations, LLCs are an enticing alternative because of the privacy protection they provide.
- LLCs give business owners a degree of flexibility that gives them the right to make decisions about the operation of their own company without restrictions.
- While S corporations, for example, have the benefit of pass-through taxation, they are also subject to a number of ownership restrictions, such as a cap of 100 shareholders and an exclusion of foreign and corporate owners. In contrast, LLCs enjoy pass-through taxes with greater flexibility and inclusivity due to the fact that there are no limitations on the quantity or kind of owners.
How Does an LLC Work in Georgia?
An LLC may function as a single-member company or a group of members. Due to this, LLCs differ from other commercial entities, such as corporations and partnerships, which are solely held by a single person (sole proprietorship) or by a group of people (corporation and partnership). A limited liability company (LLC) is a type of business structure that provides owners with a low level of personal liability.
LLC vs. S Corp in Georgia
The first thing you need to understand when comparing the S Corporation vs. LLC in Georgia is that the S Corporation is a tax treatment rather than a business structure. A founder must create a registered business entity (a corporation or LLC) before choosing the S Corp tax status. As a result, it is possible to form an LLC and choose to pay taxes as an S Corporation. This way, the company is technically both an LLC and a S Corporation.
The S Corporation doesn’t alter the fundamental business because it is a chosen tax status. Because their personal assets are legally shielded from their corporate liabilities, many business owners form LLCs. Choosing S Corp treatment alters the tax payment method, it has no impact on personal liability protection.
To become an S Corp, the founder must submit Form 8832 and Form 2553 to the IRS. A federal S Corp election is valid in Georgia unless the LLC has non-resident owners. A Georgia income tax return must be filed in that situation, and all owners must certify their agreement on Form 600S-CA.
LLC vs. Sole Proprietorship in Georgia
The sole proprietorship is the simplest, most widely used, and least regulated type of business structure. Legally and financially, the business is owned by the individual. The business is completely under the sole proprietor’s control. However, all of his or her possessions, both personal and business, are in jeopardy. Although the business must collect or pay taxes in the same way as other businesses, income taxes are recorded on the sole proprietor’s personal income tax forms. The Georgia Secretary of State does not have a record of sole proprietorships.
Meanwhile, a Limited Liability Company (LLC) is a type of business entity that, like a corporation, allows its owners some degree of limited personal liability. Like a partnership, it also provides the potential for some “pass-through” tax benefits. As a result, an LLC is effectively a hybrid between a corporation and a partnership.
The legal status of LLCs is thought to be separate from that of their owners or members. Income from sole proprietorships must be distributed among the partners in some way, and they are taxed separately from LLCs. Income from a sole proprietorship goes only to the owner, although it is taxed as personal income.
LLC vs. Corporation in Georgia
A corporation is a legal entity that conducts business independently of the shareholders who control it. The shareholders, directors, and officers are just three of the organizations that make up this organization. A corporation is only partially liable. In general, the officials, directors, or shareholders cannot be held liable for debts made by the corporation. Dividends received by shareholders and profits produced by for-profit corporations are taxed.
Smaller businesses may also choose to become S-Corporations by filing a choice with the Internal Revenue Service. Since an S-Corporation is treated more like a partnership than an individual, it can aid a company in avoiding double taxation.
A board of directors is given legal authority over the operations and affairs of a corporation. Only extremely specific situations—such as when every shareholder signs an agreement to do so—and certain statutory requirements must be met before a board of directors can be dissolved.
Business License vs. LLC in Georgia
A business license is a document that grants a person or organization the authority to conduct business, whereas an LLC is a sort of corporate structure that is created by filing a document with the state government. An LLC is not formed by it.
While registering with the Corporations Division is a requirement for many businesses in Georgia, businesses also frequently need municipal operating licenses, federal operating licenses based on the type of operation, and/or state-level professional licenses. In some circumstances, employees might also need to obtain separate licenses. The county and/or city where the primary place of business would be located in the State of Georgia is where business licenses can be obtained.
Do I Need a Business License if I Have an LLC in Georgia?
Yes, most businesses need a company license or permit after creating an LLC in Georgia. The needs are influenced by the sector and the location of the company. A general state business license is not required for a Georgia LLC. However, the LLC may need a business license depending on the kind of products or services it provides.
How To Dissolve an LLC in Georgia
A Georgia LLC can be terminated by submitting Form CD-415, Certificate of Termination, to the Corporations Division of the Georgia Secretary of State (SOS). To terminate, the LLC must still be in good standing with the SOS. The Georgia SOS accepts money orders, certified bank checks, and checks for expedited processing. Checks should be made out to the “Secretary of State.” Cash is not accepted at the SOS.