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Step-by-Step Guide to Starting an LLC in Georgia [2022]

Georgia LLC Quick Facts

Georgia LLC Costs

Initial Cost – State LLC Filing Fee:
– Filing Online: $100
– Filing by Mail: $110

 

Recurring Cost:
– Annual Report Filing Fee: $50

Georgia LLC Processing Time

– Filing Online: 7-10 business days

 

– Filing by Mail: 2-3 weeks

 

Expedited processing is available for an additional fee.

Not sure about filing an LLC yourself?

Want an LLC, but not sure about filing the paperwork yourself? Let Zenbusiness, IncFile, or IncAuthority help guide you through the LLC formation process, so you know everything was done right.

IncFile and IncAuthority are both currently running a special where you only pay state fees for your LLC formation!

Overview

Guide to Starting an LLC in Georgia

If you’re thinking of starting a business in Georgia, you may be thinking about how to form an LLC. This guide will walk you through the process step by step. We’ll cover everything from registering with the state to naming your company. So whether you’re just getting started or you’re ready to take the plunge, keep reading for all the info you need!

What is an LLC?

The Limited Liability Company (LLC) is a popular entity structure for businesses starting in Georgia. The LLC provides personal liability protection and has the potential to save money on taxes. While it can be intimidating to form an LLC for the first time, with a little research and patience, you can learn how to form an LLC in Georgia without an attorney.

Unlike a sole proprietorship or partnership where the small business owner can be held personally liable for lawsuits against the business, the LLC is a separate legal structure, protecting the business owner’s personal assets.

Besides the liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration, and management flexibility.

Related: Guide to starting a business in Georgia

Steps to Form a Georgia LLC

Let’s break down the steps to complete the Georgia LLC formation process.

Total Time: 10 minutes

Step 1: Choose an LLC Name

The first step in forming a Georgia Limited Liability Company is to make sure the name you want is available.  LLC names have to differ from other registered entity names in the state of Georgia. While name registration isn’t required before filing for an LLC, it’s best to check on available LLC names in Georgia

In addition, there are a few name restrictions to be aware of. These include:
1. The legal name of the LLC must include one of the following at the end of the business name:
– Limited Liability Company
– Limited Liability Co.
– Ltd. Liability Company
– Ltd. Liability Co.
– Limited Company
– Limited Co.
– Ltd. Company
– Ltd. Co.
– LLC
– L.L.C.
– L.C.
– LC

2. Certain words are not allowed to be used in the name of an LLC without prior approval.  Some of these words include bank, credit union, insurance, assurance, indemnity, surety, fidelity, reassurance, reinsurance, college, or university.

3. The length of the name can’t exceed 80 characters, including spaces and punctuation.

If there is a name you want to use but are not ready to form the LLC, a name may be reserved by submitting a Name Reservation Request form and paying a fee of $25. The name reservation will hold the name for 30 days.

If you plan to use a different company name from the one that you register (perhaps you want to run multiple businesses under the LLC), you can use a trade name (sometimes referred to as a fictitious business name, assumed name, DBA, or Doing Business As name).  To register a fictitious name, a Registration Statement will need to be filed with the Clerk of the Superior Court in the county where the LLC operates out from.

You may also want to see if a domain name is also available to have a matching website address.

Step 2: Appoint a Georgia Registered Agent

Every LLC in Georgia is required to have a Registered Agent. A Registered Agent will act as a central point of contact to receive legal documents, tax notices, summons, subpoenas, etc., on behalf of the LLC.

The requirements to be a Georgia Registered Agent include either being a Georgia resident at least 18 years old or a corporate agent registered with the state of Georgia. The agent must also generally be available during normal business hours and have a physical address in the state.

Any individual meeting the requirements can be the agent; however, the agent’s name and address becomes public record, and with that comes a loss of privacy. This is more important for some entrepreneurs, especially when doing business from home or still employed.  Hiring a commercial Registered Agent service like Northwest Registered Agent will help keep the owner’s names from being publicly listed.

See more about the requirements of a registered agent in Georgia.

Step 3: File the Georgia Articles of Organization

The paperwork to create an LLC in Georgia is called the Articles of Organization. To file, either create a user account with the Georgia Secretary of State, Corporations Division, and register the LLC or download and mail the Georgia LLC Articles of Organization (Form CD030) and the Transmittal Form (Form 231).

Related: How to fill out the Georgia Articles of Organization

If mailing, send the form and a check or money order payable to:
Georgia Secretary of State, Corporations Division
2 Martin Luther King Jr. Dr. SE
Suite 313, West Tower
Atlanta, GA 30334

If you have questions, contact the Georgia Secretary of State, Corporations Division, at 404-565-2817 or
http://sos.ga.gov/index.php/corporations

Estimated Cost: 100 USD

When filling out the Articles of Organization, there are a few sections that can be difficult to answer when seeing them for the first time. Let’s go over a few of those sections.

Business Purpose – This section is used to classify the industry or primary business activity.  If you choose to list your business industry, select a NAICS Code that matches the closest to what the business will do from the drop-down menu.

The NAICS (North American Industry Classification System) code is a six-digit number that classifies and categorizes different businesses.  This information is used in reporting statistical data for each of the industries in the U.S.  Remember this number as you will need it when filing annual tax returns.  Find your NAICS number here.

If your business activities aren’t specifically listed, but you want to answer, select the industry that is the closest or “Any Legal Purpose.”

Principal Office – In this section, enter the street address, city, state, zip code, and country of the initial principal office. This address can be the LLC’s physical address, the address where the business records are kept, or the address of the Registered Agent. You may not use a PO Box for the principal office.

Effective Date – The next area asks about the effective date of the LLC.  By default, the LLC is effective on the date submitted.  If you prefer the LLC to officially start at a later date (up to 90 days), enter that date in this field.

Consider using an LLC formation service like Zenbusiness, IncAuthority, Northwest, or IncFile to guide you through the LLC formation process, so you know everything was done right.

IncAuthority and IncFile are currently running a special where you only pay state fees for your LLC formation and they do the rest!

You have a Georgia LLC! Now what??

Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.

Prepare a Georgia LLC Operating Agreement

The operating agreement is a document that governs the framework of an LLC.  This document covers items like ownership rights, member (LLC owner) responsibilities, how profits and losses are distributed, and more.

Most states do not require an LLC to have an operating agreement, but it is still worth considering. Without an operating agreement:

  • The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit.
  • Member’s personal liability protection may be diminished.
  • LLC members may not fully understand their roles and responsibilities, which could lead to costly disputes in the future.

Related: Georgia operating agreement template

Obtain an EIN

The EIN or Employer Identification Number (also called a Federal Employer Identification Number or FEIN) is a unique 9-digit tax identification number assigned to a business by the Internal Revenue Service (IRS). Similar to a social security number for an individual, the EIN identifies business entities for tax purposes. The EIN will be needed to hire employees, open a bank account, register for business licenses and permits, file tax returns, and more.

There is no cost for the EIN when registering through the IRS. The number is available immediately when applying through the IRS website; however, you can also register by phone, fax, or mailing IRS Form SS-4.

Related: How to Apply for an EIN

Open an LLC Bank Account

Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.

Several documents will be needed to open a business bank account, such as:

  • A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
  • Copies of the certificate of organization paperwork from the state showing the creation of the LLC (or Certificate of Authority if a foreign LLC).
  • Driver’s licenses of the members.
  • Depending on the LLC age, a Georgia Certificate of Good Standing may be needed to prove the LLC is active and in good standing with the state.

Related: How to Open a Business Bank Account for your LLC

Elect the LLC’s Form of Federal Income Taxation

One of the significant benefits of the Limited Liability Company is the tax flexibility it provides.  When applying for the Employer Identification Number, you will choose how the entity will be taxed for federal income tax purposes. While there are some limitations, an LLC may be classified for federal income tax purposes as a:

  • Sole proprietorship
  • Partnership
  • C-corporation
  • S-corporation

While this may sound confusing, this refers to how the LLC is taxed, not the legal structure.

Related: How can an LLC be taxed?

By default, the taxation of an LLC is called pass-through taxation, which means the profits or losses of the LLC flow through to the members.

Single-member LLCs will, by default, be taxed as a sole proprietorship. The members can also elect to change the taxation to a C-corporation or an S-corporation.

Multi-member LLCs will, by default, be taxed as a partnership. The members can also elect to change the taxation to a C-corporation or an S-corporation.

In general, the difference between being taxed as a corporation and being taxed as a sole proprietorship or partnership the profits and losses are passed to the member’s federal income tax returns based on their percentage of ownership.  As a result, the owner will pay self-employment taxes on all business profits.  As an alternative, electing to be taxed as a corporation allows the members to take a reasonable salary and then pay payroll taxes.  Any remaining profits are distributed and aren’t subject to payroll taxes, resulting in potential tax savings. Note that a disadvantage of an LLC taxed as a corporation in Georgia is an annual corporate tax, and net worth tax will be assessed, in addition to double taxation for C-corporations.

Before electing how your LLC will be taxed, be sure to talk with an accountant to assess which one will be best for you, as tax laws are complicated and several factors need to be taken into account.

Apply for Business Licenses and Permits

Depending on what your business does and where it is located, there will likely be various business licenses and permits needed. Some common registrations include:

  • Business License – Some cities require businesses to obtain licensing before they can start.
  • Professional License – Certain services such as barbershops, accountants, salons, and others must be licensed.
  • Sales Tax Permit – To sell products and certain services, registration with the Georgia Department of Revenue will be necessary.

Related: What Business Licenses are Needed in Georgia?

File the Annual Registration

LLCs are required to file an annual registration with the Georgia Secretary of State, Corporations Division.  The cost of the initial registration is $50 and will be due between January 1st and April 1st of the year following the formation of the LLC. The annual report updates ownership information and other details.

Related: How to File a Georgia LLC Annual Registration

Common Questions To Starting an LLC in Georgia

How much does it cost to start an LLC in Georgia?

The Georgia Secretary of State’s filing fee for an online filing is $100, while forms sent by mail will cost $110.

Is there a yearly fee for an LLC in Georgia?

Each year LLCs will need to file the Annual Report and pay the $50 annual report fee.

How long does it take to start an LLC in Georgia?

It normally takes 7-10 business days for an LLC to be approved in Georgia for online filings and 2-3 weeks for mailed-in filings, though for an additional fee, expedited processing is available.

Where do you check if your Georgia LLC name is available?

Find available Georgia LLC names by searching the Georgia Secretary of State name database.  

Do you need a Registered Agent for your LLC in Georgia?

Every LLC in Georgia must have a Registered Agent under Georgia law.

Anyone can act as a Registered Agent, provided they are at least 18 years old, reside in the state, and are generally available to receive documents during normal business hours.

Related: What are the requirements of a Registered Agent in Georgia?

Does an LLC need a business license in Georgia?

It’s sometimes thought that the LLC and business license are the same in Georgia, but they aren’t. An LLC is referred to as the business entity, which is how the business is organized to conduct business. A business license is an approval from a government entity to legally operate.

Related: What business licenses are needed in Georgia?

What is a Foreign Limited Liability Company?

An LLC that is physically operating in states outside of where it was formed. Physically operating means having a presence, such as having an office or employee. The LLC will need to register as a foreign LLC in each state where it plans to operate.

Learn more about the foreign LLC.

What is a Professional Limited Liability Company?

Businesses that require state licensing, such as accountants, attorneys, podiatrists, physical therapists, acupuncturists, etc., often must file as a Professional Limited Liability Company (sometimes referred to as a Professional LLC or PLLC) instead of an LLC. Filing for a PLLC is very similar to that of an LLC.

Learn more about a professional LLC.

Is an LLC the same as a corporation?

The LLC is one of four main types of business entities. You can learn more about each here:
What is a sole proprietorship?
What is a general partnership?
How to form a Georgia corporation

Should I use an LLC formation service or do it myself?

Following our guide, most people will be able to form an LLC on their own, however, LLC formation services like IncFile and IncAuthority will guide you through the process and guarantee it’s done right – and it doesn’t cost any extra to do so!

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