How To Form An LLC In Georgia (Guide)

The first thing to research is if the name you planned for your business is available. It is not possible to file for a limited liability company (LLC) using the name of an existing company. Even having a name considered too similar to an established brand could cause plenty of costly complications down the road.

Avoid any foreseeable problems by performing a name search of Georgia businesses. If your research shows the name you want is available, you can file your LLC paperwork. If you’re not ready to file yet, you can submit an application to reserve the name for 30 days. The fee is $25 and the name reservation can be renewed.

When choosing your LLC’s name, keep the following tips in mind:

• Ease of spelling and pronunciation: Select a name that is easy to spell and pronounce to avoid confusion. For example, a name like “Tech Solutions” is straightforward and easy to remember, whereas “Teqk Solushunz” could lead to misunderstandings and difficulties in communication.
• Avoid intentional misspellings: Don’t misspell words to be cute, as this can lead to issues with recognition and searchability. For instance, “Kool Kars” might seem catchy, but it can create problems with search engines and brand recognition compared to the properly spelled “Cool Cars.”
• Uniqueness: Ensure your name is unique and distinctive to stand out without infringing on existing trademarks. A name like “GreenLeaf Consulting” is unique and distinct, whereas “Green Consulting” might be too generic and potentially problematic if another business has a similar name.
• Professionalism: Choose a name that reflects the professionalism and nature of your business. For example, “Smith & Associates Law Firm” clearly conveys the business’s professional nature, while a name like “Legal Eagles” might not project the same level of professionalism.

When you arrive at this stage, you’ll either file as a domestic or foreign entity. Foreign entities are businesses established in a different state that wish to legally operate in Georgia. They must file a different application and pay additional fees.

Domestic entities—businesses run in Georgia—submit Articles of Organization online or by mail to the Georgia Secretary of State. The process costs $100 online; physical filings require an additional $10 fee.

A registered agent is a person or organization authorized to accept legal documents on your LLC’s behalf. A registered agent can be a Georgia resident or a corporation or LLC authorized to do business in Georgia. The agent must be located at a street address in Georgia.

Georgia does not require a third party to act as your registered agent; you can represent yourself. It is also possible to ask an employee or trusted family member or friend to step into the role.

Otherwise, you can use a registered agent service that does the work for you. While Georgia does not require a third party to act as your registered agent, there are several compelling reasons to consider this option:

• Privacy: Using a registered agent service keeps your personal address off public records, helping protect your privacy.
• Reliability: A registered agent service ensures someone is always available during business hours to receive important documents, which can be challenging if you are frequently out of the office or traveling.
• Compliance: A registered agent can help keep your LLC in compliance with state requirements by reminding you of filing deadlines and other important dates.
• Professionalism: Having a dedicated registered agent can lend a level of professionalism to your business, reassuring clients and partners that you are organized and reliable.
• Convenience: If you move your office location, a registered agent service remains constant, so you don’t need to update your registered agent information with the state.

You can represent yourself or ask an employee or trusted family member or friend to step into the role. However, a registered agent service can handle these tasks efficiently, allowing you to focus on running your business.

Filing the paperwork to start your LLC isn’t everything you’ll need to do to set up your business. Several post-filing steps should be taken to maintain good standing and meet tax requirements.

Create an Operating Agreement

An operating agreement isn’t a requirement for setting up your Georgia LLC. Even so, operating agreements are useful tools. Creating one at the onset of your LLC will provide a professional foundation.

An operating agreement document holds a few key functions:

• Outlines the LLC’s financial and functional decisions
• Governs internal operations and lays out designated responsibilities
• Details methods for meeting the needs of the business owners

For Georgia LLCs with multiple members, a written agreement will prevent confusion, disagreements and other issues concerning policies and roles. The existence of an operating agreement can also provide an additional layer of liability protection. It further establishes your business as wholly separate from your personal finances.

Get an EIN

Most Georgia LLCs must obtain an EIN, or an Employer Identification Number. The EIN is the LLC’s tax identification number and is taxed on the members’ personal tax return. An EIN is required if your LLC has multiple members or has employees. You can get an EIN online through the IRS’s official website. For more info and a helpful guide, see our comprehensive guide on How To Get an EIN for an LLC.

The EIN allows the LLC to:

• Open bank accounts: Establish the LLC’s own bank accounts, separate from personal accounts.
• Set up payroll: Manage payroll for employees efficiently.
• File taxes: Submit federal and state tax returns.
• Apply for licenses: Obtain necessary business licenses and permits.
• Handle excise taxes: Deal with specific excise taxes if applicable.
• Apply for credit and loans: Establish and build business credit separate from personal credit.
• Process 1099 Forms: Manage tax forms for independent contractors.

Separate Personal and Business Assets

If operating a single-member LLC in Georgia, you may not feel like you need a new bank account. However, the purpose of an LLC is to shield you and your personal assets from legal ramifications in the event of legal proceedings. You can use your new EIN to open a business bank account. If you have multiple members, consider a centrally located or online bank.

Establishing separate accounts not only aids in protecting personal assets but also simplifies accounting and tax reporting. For instance, having a dedicated business bank account allows you to easily track business expenses and income, ensuring accurate records for tax purposes and financial planning. This clear financial separation can be important during tax audits, providing straightforward documentation that distinguishes business activities from personal ones.

Additionally, having separate accounts builds credibility with customers and vendors. Payments made from a business account, rather than a personal one, can enhance your professional image. For example, “Smith Consulting, LLC” on checks and invoices reflects a more established and trustworthy business than a personal name would. This professional presentation can be vital in securing contracts and fostering business relationships.

Using separate credit cards for business expenses further reinforces this distinction. Business credit cards often come with benefits tailored to business needs, such as expense tracking tools and rewards for office supplies and travel. These cards also help in building a credit history for your LLC, which can be beneficial for future financing needs.

Maintaining distinct financial accounts is a fundamental practice for any LLC. It supports legal protections, simplifies financial management and enhances the professional stature of your business.

Fulfill Georgia LLC Tax Requirements

How you file and pay income taxes for your LLC depends on your LLC’s tax structure. If you’re a single-member LLC with a sole proprietorship tax structure, you’ll report income or loss on your personal tax returns. Multi-member LLCs taxed as partnerships will function in much the same way. If your LLC elects to be taxed as a corporation, your tax filing requirements will be different.

Filing state sales tax may also be a requirement if your business sells taxable goods. If your business’s sales are subject to sales tax, you’ll need to collect and then pay this tax. A Sales and Use Tax Number will be required in the state of Georgia. You can apply for this identification number online via Georgia’s Department of Revenue website. Sales tax is currently 4% at the state level, plus additional local sales taxes that average about 3% to 4%, depending on the jurisdiction.

In addition to sales tax, Georgia LLCs may be subject to other taxes, such as employment taxes if you have employees. This includes withholding state income tax from employee wages, paying unemployment insurance tax and contributing to Social Security and Medicare. Registering for these taxes can be done through the Georgia Department of Labor and the IRS.

Georgia imposes an annual registration fee for LLCs. This fee is due each year on the anniversary of your LLC’s formation and can be paid online through the Georgia Secretary of State’s website. Failing to pay this fee can result in penalties and eventually lead to administrative dissolution of your LLC.

Certain types of businesses may be subject to additional state-specific taxes or regulatory fees. For example, businesses involved in the sale of alcohol, tobacco or certain services may need to pay excise taxes or obtain special permits. It’s important to research any industry-specific requirements to ensure full compliance with state laws.

The devil may have gone down to Georgia, but even they can’t do business there without understanding some basic information about LLC filing, classification and taxation requirements.

How Are LLCs Classified in Georgia?

In Georgia, for federal income tax purposes, they classify limited liability companies and foreign limited liability companies as sole proprietors (also known as “disregarded entities”) or partnerships unless otherwise classified. Georgia follows the federal “Check-the-Box” classification system, thus limited liability companies and foreign limited liability companies are classified in the same way for Georgia income tax purposes as they are for federal income tax purposes.

Foreign Entities

Georgia-owned businesses fill out standard Georgia LLC forms and pay the applicable fees. But if you’re a non-Georgian hoping to do business as an LLC within the state, you are considered a “foreign entity.” This means you will have to submit separate paperwork and pay a $235 fee.

Some states allow for LLC domestication, but Georgia is not one of them. If you want to move your out-of-state LLC to Georgia, the process is more complicated than simply submitting a few forms, and you may have a few options for how to structure the transaction. Seek legal advice if you have a foreign LLC and you want to make Georgia your home state.

Annual Business Registration

Georgia requires LLCs to go through the Annual Business Registration process. The cost is $50. If the registration isn’t submitted on time, you will pay a $25 late fee.

Annual registration requires the following:

• The control number or business name
• The name of person filing the annual registration
• An email address
• The mailing address of the principal office
• Registered agent’s name and address
• Acceptable form of payment

Georgia accepts credit cards, checks (including certified checks) and money orders. If paying by credit card, be sure to include the three- or four-digit security code. The official website provides instructions for completing the process.

Georgia Business License Requirements

Georgia doesn’t require a business license at the state level, but all Georgia LLCs need a business or operating license from their city or county. Contact the government offices in your city or county to find out more about these local requirements.

You may need additional licenses or permits if state, federal or local laws regulate your business’s activities. Examples of businesses that may need additional licenses include bars, day care centers, plumbers, home inspectors, gun dealers and licensed professionals such as architects and lawyers.

There are many types of LLCs available to start in Georgia. These include:

• Single-member LLC: Single-member LLCs are ideal for solo entrepreneurs. This structure protects personal assets from business liabilities, providing a clear separation between personal and business finances. The setup is straightforward, with fewer formalities than corporations. Georgia requires minimal paperwork, making it accessible for new business owners.
• Multimember LLC: A multimember LLC is suitable for businesses with two or more owners. This structure offers liability protection for all members. Profits and losses can be distributed flexibly according to the operating agreement, which can be advantageous for businesses with varied investment contributions. Georgia’s regulations allow for both equal and proportional ownership arrangements.
• Professional LLC (PLLC): A professional LLC is tailored for licensed professionals such as doctors, lawyers and accountants. This structure allows professionals to provide services while enjoying limited liability protection. The state requires that all members be licensed in the profession the PLLC is established to serve. This ensures compliance with state regulations while offering tax benefits and operational flexibility.
• Series LLC: Series LLCs allow the formation of separate series or cells within a single LLC, each with its own assets and liabilities. This structure is beneficial for businesses with multiple product lines or real estate holdings. Each series operates independently, protecting the assets of one series from the liabilities of another. Georgia’s adoption of the Series LLC model provides a versatile option for complex business structures.
• Low-Profit LLC (L3C): The low-profit LLC is designed for organizations that prioritize social goals alongside profit. L3Cs bridge the gap between nonprofits and traditional for-profit businesses. They attract investment from foundations and other entities interested in social impact. In Georgia, L3Cs must state their social mission in their formation documents, which ensures clarity of purpose and mission-driven operations.
• Domestic LLC: A domestic LLC operates primarily within the state of Georgia. This structure is the most common for small to medium-sized businesses. It provides a balance of liability protection, tax benefits and operational flexibility. Forming a domestic LLC involves registering with the Georgia Secretary of State, obtaining necessary permits and adhering to local regulations.
• Foreign LLC: A foreign LLC is an out-of-state business that wishes to operate in Georgia. To do so, it must register with the Georgia Secretary of State. This structure allows businesses established elsewhere to expand into Georgia while maintaining their original formation. The process involves submitting a Certificate of Authority and ensuring compliance with Georgia’s business laws.

Each type of LLC offers unique benefits tailored to different business needs. Whether you’re a solo entrepreneur, a group of professionals or a social enterprise, Georgia provides a supportive environment for establishing and growing your business.

Choosing the right business structure is essential for your venture’s success. Here’s a comparison of popular business structures in Georgia, outlining their key features to help you make an informed decision. Each business structure offers unique features suited to different business needs, providing various levels of liability protection, tax treatment and management flexibility.

Sole Proprietorship

• Ownership: Single owner
• Liability: Owner personally liable
• Taxation: Income reported on personal tax return
• Formation: No formal registration required
• Management: Owner has full control
• Continuity: Ends with owner’s death or withdrawal

Partnership

• Ownership: Two or more owners
• Liability: Partners personally liable
• Taxation: Income passes through to partners’ personal tax returns
• Formation: Requires a partnership agreement
• Management: Shared among partners
• Continuity: May dissolve upon partner’s death or withdrawal

Corporation (C-Corp)

• Ownership: Shareholders
• Liability: Limited to investment
• Taxation: Double taxation (corporate profits and dividends)
• Formation: Articles of Incorporation filed with the state
• Management: Managed by a board of directors
• Continuity: Perpetual existence

S Corporation (S Corp)

• Ownership: Limited to 100 shareholders
• Liability: Limited to investment
• Taxation: Pass-through taxation (profits taxed at shareholder level)
• Formation: Articles of Incorporation and IRS S-Corp election
• Management: Managed by a board of directors
• Continuity: Perpetual existence

Nonprofit Corporation

• Ownership: No owners; governed by a board of directors
• Liability: Limited to the corporation
• Taxation: Tax-exempt if approved by IRS
• Formation: Articles of Incorporation with nonprofit status
• Management: Managed by a board of directors
• Continuity: Perpetual existence

Limited Liability Partnership (LLP)

• Ownership: Two or more partners
• Liability: Limited for all partners
• Taxation: Income passes through to partners’ personal tax returns
• Formation: Registration with the state
• Management: Shared among partners
• Continuity: May dissolve upon partner’s death or withdrawal

Limited Partnership (LP)

• Ownership: General and limited partners
• Liability: General partners fully liable; limited partners liable up to their investment
• Taxation: Income passes through to partners’ personal tax returns
• Formation: Registration with the state
• Management: General partners manage; limited partners have limited involvement
• Continuity: May dissolve upon partner’s death or withdrawal

The process of creating a Georgia LLC can be a challenge. Here are a few resources to help with forming your business in Georgia:

• Best Georgia Registered Agent Services
• Best Georgia LLC Services
• How To Start a Business in Georgia
• Georgia Business Entity Search