Mon 28 Mar 2016 | By:

Why and How to Start an LLC in Georgia

How to Form an LLC Online

Are you thinking about starting an LLC in Georgia? In this article, we’ll discuss the top advantages of an LLC and how it will benefit your business in the short and long term. After that, I will walk you through the entire registration process if you decide it is the right business structure for you.

However as a quick note, if you are nervous about the filing process and would rather professionals handle it to make sure everything is filed properly, look into a service like IncFile (for $49) or LegalZoom (for $149).

Both services use online questionnaires that take you less than 15 minutes to fill out and they take care of the rest.

If you’d like to handle the incorporation process yourself, keep reading for our step-by-step guide. Otherwise look into one of the incorporation services mentioned above. Do what you feel most comfortable with.


Why Form an LLC in Georgia

1) Protection Against Liabilities

Any business owner understands the risk of starting a business and this includes liabilities. However, you don’t necessarily have to be accountable for the mistakes and problems of your business because you can avoid them if you incorporate your business in the state of Georgia. An incorporated business is considered an independent and separate entity; it is given its own rights and is in-charge of its own transactions.

By forming an LLC, you’ll be able to protect yourself from personal, legal and financial liabilities. Your personal and real estate assets are safe because you and your business are considered separate entities.

In the same way that you are able to gain protection as a business owner, your Georgia LLC will also be given due process and it can air its side fairly during lawsuits or credit investigations.


2) Minimizes Tax Burden

During the initial stages of launching your Georgia small business, it won’t be profitable right away so you need to save and cut on costs as much as possible.

Molding a business takes a lot of time and you may lose thousands of dollars during the first few years of operations. To be able to ease this financial blow, many entrepreneurs form their businesses as LLC’s to save on tax.

With the default partnership taxation exclusive only to LLC’s, the losses incurred by the business flows through the owners using them as deductions for income.


3) Builds Business Credibility

Building your startup’s reputation takes time; it requires a mix of hard work and genuine sincerity towards your customers. If you start your Georgia startup unincorporated, you’re not helping in building its credibility.

Consumers are very particular when it comes to their protection and rights and the only way that they can exercise these is if a company is legally registered in the state of where it is conducting business.

To give your business an added boost of credibility, incorporating it can help a lot. People will trust your business more, purchase and support your products/services and enable you to establish a solid following of loyal customers.


4) Easy to Customize Your Small Business

Forming a Georgia LLC is highly advantageous because it is adaptable to any kind of situation. An LLC is very flexible, you can write your operating agreement that best fits your needs, you can create your own rules and manage your business in whatever way you want.

The state doesn’t impose too many formalities and requirements on LLC’s as well, unlike when you run a corporation. Corporations are subject to stiff corporate formalities and an unbending management structure.


5) Looking for Funding is Easy

Forming a Georgia LLC makes raising capital easier because it is the entity of choice when it comes to seed or angel capital. While venture capitalists prefer to invest in corporations, small investors like Limited Liability Companies better.

The partnership pass-through taxation, which is a feature of an LLC, enables investors to deduct their contributions, which is beneficial if your startup is not making profit yet because they can use the losses to offset income. Even if the business fails, they’ll still be able to get a nice deduction although their investments can’t be taken back.

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How to Start an LLC in Georgia

1) Make a Name for Your Georgia LLC

Choose a Business NameThere’s no specific rule when it comes to naming your Georgia LLC, however, you need to make sure that you create a business name that does not cause confusion to the public. When naming your Georgia small business, you have to include the words LLC or L.L.C. after your business name.

Once you’ve made a concrete decision as to the name of your business, check for any duplicates through the state’s business name research database.

You can also make a reservation for your business name; you simply have to file an application for reservation before the Georgia Secretary of State’s Office.

Prepare $60 for the filing fee; please be reminded that your business name can only be reserved for 120 days.


2) Hire a Georgia Registered Agent

Choose a Registered AgentThe next step to fully form your Georgia LLC is to hire a competent Georgia Registered Agent who will take care and receive documents on your behalf.

A Registered Agent has a great role to play in your business, without one, you’ll have to receive the sensitive documents and prioritize mails yourself – which is a little too time-consuming if you’re still in the initial stages of your business.

However, if you hire a Georgia Registered Agent, you’ll be able to focus on running your business instead of distributing your attention to many different tasks. Two of the most important things that you need to remember when hiring a Registered Agent is track record and experience.

With any kind of service comes professional fees and it can cost you a lot, but if you choose to  incorporate your LLC with IncFile you’ll be able to take advantage of a free registered agent service for one full year.


3) Get an Employer Identification Number (EIN)

Get an EIN for Your LLCAn EIN is equivalent to a Social Security Number in individuals. All businesses operating within the state of Georgia are required by the Internal Revenue Service to obtain this requirement.

The EIN is essential for the IRS to monitor your business activities, especially your state taxes. It is also important if you’re hiring employees and applying for a business bank account. The EIN can be obtained through online application for free.


4) File Your Articles of Incorporation

Register an LLCAmong all the requirements to file a Georgia LLC, this by far is the most important. To complete this requirement, download a copy of the Articles of Organization form and fill it out with the correct information.

When filling out the form, make sure to verify all the information to avoid making mistakes. You can send the form online, or you can mail it in the address placed in the form. Prepare $120 for the filing.


5) Draft an Operating Agreement

Create an Operating AgreementAlthough an Operating Agreement is not a mandatory requirement in the state of Georgia, it would be best if you make one for your startup. An Operating Agreement is a document that outlines the management, operating procedures and ownership of your business.

If you want to make an Operating Agreement but have no idea how, check out this site to assist you in making  a customizable Operating Agreement.


Additional Requirements

1) Create a Solid Business Plan for Your Georgia LLC

Write a Business PlanA business plan is not required to start an LLC in Georgia, however, making one will boost your chances of success.

A business plan is like a blueprint, a game plan, where you set objectives and create strategies to achieve them. Having a business plan will enable you to have a clear path and direction towards your business objectives/goals.

Quick Links to Writing a Business Plan


2) Pay Your Georgia LLC Taxes

Small Business TaxesA supplementary requirement that is mandatory in Georgia is paying your LLC’s taxes. As a small business owner, you need to understand Georgia tax regulations so you’ll be able to know your responsibilities as a taxpayer and the advantages and benefits that you can gain.

To be able to continue your business’s operations, you have to stay compliant, pay your taxes on time and complete required tax documents. Failure to pay your taxes promptly will result in sanctions, penalties and extra charges.


3) File Your Annual Report

File Annual Reports & Publication RequirementsAll businesses in Georgia are required to submit an annual report before the state government. You need to do this on the first day of your anniversary month every year. To maintain your good standing and business reputation, you have to make sure that you file your annual report every year for the rest of your business’s existence.

As you can see, starting an LLC in Georgia involves numerous steps, however, if you just follow this simple guide, forming your company as an LLC will be easy.

It’s best to remember that not all businesses have the same needs and a Georgia LLC may not be right for you, so before you learn how to form an LLC in Georgia, make sure that you know the reasons why.

After reviewing the reasons, if you feel like an LLC is the best choice for a business structure, you have to prepare and plan ahead for the legal process. Make this guide as your reference, I’m sure it will help you a lot. Good luck!

Please keep in mind that this guide is not meant for legal purposes and is not legal advice. If you want specific answers for forming an LLC in Georgia, consult with a professional.

About Ryan James

Half hardworking hermit, half avid adventurer, Ryan founded Startup Savant to simplify entrepreneurship and pay it forward by donating a portion of all revenue to support children's education via