How To Start an LLC in Georgia

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.

Chapte 590-7-19 to 590-7-27 of Georgia State Statutes outlines the rules for creating a Limited Liability Company. 

The first thing to do is to get prepared, and this entails: 

The second thing to do is to gather what is needed, which includes:

The third step is to create and file registration.  

The entire LLC creation process may be summarized in 6 steps as follows:

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.

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: 

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: 

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. 

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: 

To register by mail or in person: 

Office of Secretary of State

Corporations Division

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.

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:

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:  

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: 

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.