If you’re searching for a step-by-step guide to creating an LLC in Georgia, you’ve come to the correct location. In this article, we’ll walk you through all of the steps involved in creating a company.
What is a limited liability company (LLC)?
A limited liability corporation (LLC) is a business entity that restricts the owner’s liability. It can be both exciting and daunting to start a new company or corporation. Although looking at all of the processes may make one feel sluggish, the process of creating a business in Georgia is reasonably straightforward. You will get through it and be running if you follow the proper steps. If you follow the steps outlined in this post, you will be ready to start your business legally. Georgia has specific criteria for creating an LLC, including naming your company, information about forms, and more.
Step 1: Give your LLC a name
Your Georgia LLC’s identity, credibility, and personality are all described by its name. It would be best to decide on a name appealing to consumers, which sticks into their minds. A distinctive name attracts new customers by piquing their attention. Names should be given priority since they will appear on your business cards, websites, logos, and other materials, and they convey the concept of your goods or services. You can be as imaginative as you like with the name, but keep in mind that there are some guidelines to follow:
• Limited liability corporation or the abbreviation LLC must be there in the name.
• It should be no longer than eighty characters.
• The words such as surety, insurance, assurance, and more should be avoided. You can use it after getting permission from the fire and security departments.
• Without the bank and finance department’s permission, do not use the words bank, a banking corporation, Banking, bankruptcy, and so on.
• Avoid the words university or college if you don’t have written permission from the Georgia Non-public Postsecondary Education Commission.
Also, the company’s name needs to be distinct from that of the competitors. Even if your selected name is identical to someone else’s, you can make it stand out by adding, removing, or modifying an entry.
Check to see if the name is open to use
Before moving on to the next move, always check to see if your selected name is available. Before taking any significant steps, it’s a good idea to double-check availability. With the Secretary of State’s website’s help, you can search to check if a company with your wanted name already exists. It may take some time to make the changes, or you may be fortunate and find a new name immediately. With the help of a name reservation request, you can reserve your selected name.
The company’s name reservation
You’ve found your dream name, but you’re still afraid that someone else will use it first. Relax; there’s an ideal solution to your dilemma. In Georgia, you can hold your name for thirty days. After you’ve found a different name, you can book it by mailing or delivering in-person the request for name reservation. For that, you have to download and fill the name reservation form and send it to the following address:
Office of Secretary of State
Corporations Division, Name Reservation Request
2 Martin Luther King Jr. Dr. SE, Suite 313 West Tower
Atlanta, Georgia 30334
You can also reserve the name online. Go to the State’s Secretary’s official website and create an account to fill out the form. You have to pay $25 for the online process, and it takes 3 to 5 working days to process. While paper form filings take 5-7 days, you have to pay $35 via cheque or money order. You also have choices for faster processing if you want to speed up the process. If you want the process to get completed within the day, you have to pay an additional $250; and for the two-day service, you have to pay $100. If States discover that your name is not suitable for use, they will give a rejection letter, and you will have to submit a different request for free within ten days. When you file the Articles of Organization, you will be given a reservation number until your name has been reserved.
Step 2: Appoint a Registered Agent for your LLC
If you want your LLC to run smoothly in Georgia, you’ll need a licensed agent to serve as a mediator for legal communications. A licensed registered agent is an essential part of your LLC because it manages all of the government’s diplomatic relations and handles all of the paperwork. He/she is the company’s mailbox who can be an individual or agency that receives process, records, or other formal communication on behalf of the LLC. The licensed agents handle everything from litigation to taxes to repairs. The agents make the job manageable because it would add to your workload if you were to do it yourself. He will ensure that no vital documents are lost.
However, bear in mind that having an agent is a requirement, not an option. In Georgia, the limited liability corporation must maintain a registered address and a registered agent for handling the formal documents and correspondence. You’ll need to get the agent’s permission after you’ve appointed your agent. Then write their name, title, and email id on the form submitted with the Article of Organization.
For the registered agent, there are two options:
- Anyone who is at least 18 years old and has a street address in the State will serve as the registered agent. So it’s not as if there’s any specialized education or expertise required. You can use lawyers or solicitors as your representative because they are familiar with operating an LLC; however, you can also use family members or friends. They’re both realistic options. You can also be your LLC’s registered agent if you satisfy these criteria and are willing to take on added duties.
- You may also use a registered agent program to handle your business formation needs and provide you with a registered agent free of cost. If you want your company to be self-contained, you can opt for a national registered agent service. You may wish to replace your agent throughout your business, but keep the process smooth and straightforward, as doing business in the absence of an agent may lead to the official dissolution of your LLC.
Stage 3: Register the Articles of Organization
The Articles of Organization are a vital document that must be registered with the Department of State. This document grants permission to begin a business in the State and make your business legitimize. For this article, only a few items are required:
• The name of your LLC: this move can seem easy at first glance. However, it is crucial because the name you select would be your organization’s name for continuity. So be cautious and write the name exactly as you want to see it.
• The effective date: This may be the same day as the paperwork is filed or a later date. If you want a particular date, bear in mind that it must be within 90 days of Georgia’s filing date.
• Signature: The Article of Organization must be signed before it can be submitted. Anyone can be a good signee for your company, whether they are the organizer, manager, member, or attorney.
What is the best way to file the Article of Organization?
There exist three choices, and all three have a $100 filing fee.
You must use the electronic submitting system of the Corporation Division. First, you have to open an account and log in. The next step is to pick your business form and complete the registration by following all of the instructions.
You may also save your papers on paper. For these filings, you will require a transmittal information form, and Articles of Organization are necessary.
After you’ve completed both, give them to the Secretary of State’s office along with the bill.
2 Martin Luther King Jr. Dr. SE, Suite 313 West Tower
Atlanta, Georgia 30334
You can also personally deliver your papers and fee to the address mentioned above if you live nearby. The processing time varies from 5-7 days; however, it can take a longer time in some situations. However, if you want to speed things up, you can do so by paying $250, $100 for same-day and two days processing, respectively.
Step 4: Establish an Operating Agreement
This agreement is the glue that binds the LLC together; it specifies how the LLC’s operations, policies, and actions will be carried out. It functions as the corporation’s bylaws. Although the LLC’s operating agreement is not needed in Georgia, it is always good to have one. It’s a crucial document that helps you maximize the LLC’s productivity, legitimize the business, and safeguard your properties. Let’s take a peek at an example: Assume that a business owner wishes to sell a portion of his company. The operating agreement will determine how the company’s assets will be divided among the members in dissolution.
However, if the owner refuses and insists on sole primary possession, the operating arrangement may be used as evidence in court. It will illustrate that the LLC’s assets are distinct from personal assets. The operating agreement also supervises everything from taxation to member responsibilities. As a result, it is needed.
Operating arrangements have the following benefits:
- They secure the company’s limited liability status.
The members’ responsibility could be jeopardized without the cover of the operating agreement, and if there is a legal action, their properties may be at risk.
- Resolve conflicts
There will come a time when the couples will have differences. In that case, getting your business agreements in writing gives you something to relate to and will help you fix the problem. It is often easier to have the words written down rather than taking them orally.
- In the eyes of the State, protect the business agreements.
Your company is unique, but without an Operating Agreement, your LLC would be subject to Georgia state law. The law is intended to cover all LLCs created in the State.
You must have understood the significance of the agreement after reading all of this. You should draught one at this stage. If you desire to be confident that you are not missing any information, you should hire an attorney to write or examine the agreement. He or she will make sure that it is compliant with the law and contains all necessary material. You can do it yourself if you want to. And don’t be concerned; it’s not that difficult. You can find a variety of free models on the internet. You can compose a successful letter with the aid of these models. You can save both time and money by doing so.
Step 5: Obtain an Employer Identification Number (EIN)
The most crucial aspect is yet to come: taxes. To prevent any problems with the government, you can pay all of your taxes on time. The LLCs titleholders do not deliver corporate tax returns; instead, they include the losses and gains on their income tax returns. However, there are particular conditions in which LLCs must file federal taxes, such as when they hire workers, classify as a company or association, or sell merchandise.
The Employer Identification Number is a nine-digit number used by the Internal Revenue Service (IRS) to classify a business’s tax accounts. As a result, having an EIN is needed for everyone who pays business taxes. But, aside from business requirements, there is another explanation why an EIN is required:
- Business banking accounts: To open a business bank account, you must first obtain an EIN.
- Recruiting workers: If you want to hire employees, you’ll need an EIN to keep track of federal and State taxes.
- Limit your liability: An EIN separates your company and personal finances.
- Avoid fraud: When dealing with suppliers, you must prove your social security number or employer identification number (EIN). The EIN for a company allows you to protect your details from identity fraud.
You can ask for an Employer identification number in one of the following ways:
This is the most time-saving and effective form. Monday through Friday, between 7 in the morning and 10 in the night, you can apply for an EIN. You will obtain your number instantly after completing the process. You must also have a legitimate personal taxpayer number for the procedure.
You can fax our application if you are not satisfied with the online process; to do so, download and complete Form SS-4 and send it to (855) 641-6935. Within four business days, you will obtain your EIN.
There’s also the option of sending mail that never expires. However, keep in mind that this option is the most delayed route, with processing taking about four weeks. You must download and complete Form SS-4 and mail it to the following address:
Internal Revenue Service Operation
Attn: EIN Operation
Cincinnati, OH 45999
We’ve taken all of the necessary steps at this stage. However, a few other steps must be completed, which are equally critical when forming an LLC. So, please don’t give up; we’re almost at the end.
Step 6: Income Taxes, Permits and licensing
After following all of the above measures, the LLCs get recognized, but strict maintenance standards must be met to keep the LLC in Georgia in a good state. So, before you embark on your journey, make sure you review the following requirements:
Federal Income Taxes
As previously reported, the LLC does not have to pay federal taxes directly. As a result, the owners exclusively have to record both company gains and losses on their tax returns. Since LLCs are taxed differently than corporations, you can opt to have your LLC taxed as a company. You must pay a corporate income tax return if you choose this option.
State and Local Taxes
Georgia’s state taxes are as straightforward as the government taxes, which is fortunate for you. Instead of a different corporation, the LLC’s owners must disclose gains and losses on their tax returns. If you want to handle your LLC as a company, however, things change. The best thing is that there are no right or franchise taxes in Georgia.
You would have been pleased with the state tax, but now it’s time to keep your horses because there are a few more company taxes to come. If your LLC follows those criteria, it may be required to pay indirect taxes. Whether you sell goods, you must pay sales tax; if you buy goods from outside the city, you must pay use tax. If your LLC hires personnel, you’ll still have to pay unemployment and withholding taxes. Finally, your LLC location determines whether or not you must pay local taxes to your county, city, or municipality.
If you have any concerns about the taxes, you can go to the Georgia Department of Revenue’s official website or contact them at 877-423-6711.
Obtaining a license
You may be asking, “Which license?” The Articles of Organization have already established your company’s legitimacy. However, before starting a company, your LLC will require you to get a permit. The kind of license you need will be decided by the sort of company you operate. If you own a café and want to serve beer, you’ll need a liquor license, and if you’re going to open a grocery shop, you’ll require a Food Sales License and business license from the State.
To see if your company needs licensure, go to the Secretary of State’s license website. The license and permit are issued mainly by cities and constituencies, so you’ll need to reach the county government or the local commerce chamber for more information.
Step 7: Making a report
This, to your delight, is the final move. With a bit of patience, you’ll be up and running, closing deals and expanding your company. One significant thing to bear in mind is that Georgia needs you to file an annual registration form. The LLC must file an Annual Report every year between 1st January and 1st April; the fee is $50. You can submit the report in two ways: online or mailing the form. You can send it to a similar address as the Articles of Organization. If you need assistance, the State Secretary offers a filing guide, which you can look at.
You should take a look at it. If you don’t apply, the State will dissolve your LLC administratively, so make a note of it on your schedule, phone, or planner. Also, bear in mind that restoring a dissolved LLC costs $250; this charge can be avoided by filing the reports on time.
What are the benefits of forming an LLC in Georgia?
For different people, creating an LLC is different, but it is always for development and advancement. Individual members are protected from liability and taxes by the LLC’s legal system, which is relatively inexpensive and straightforward.
• Like a company, the LLC in Georgia has the advantage of being able to continue operations even though one of its members dies. Transferring ownership interests from one member to another is easy. The business’s owners and members are putting their money on the line. Their property is safe.
• The profits are split among the partners and taxed at their rates.
We’ve finally come to an end. Congratulations! You are now able to get up and start your business after completing all of these steps. These steps might look long and tedious, but once you start following them, it will be a breeze to set up your LLC.