Your Georgia Business-of-One is flourishing like a peach farm in high summer – and you’re thinking “It may be time to take my company to the next level by forming an LLC.” This might be the part you’ve been putting off because you’re not quite sure how to form an LLC in Georgia – or anywhere, for that matter. The good news: it’s really simple!
If you go over the info we’ve outlined below and follow these five easy steps, you’ll be up and running in no time.
Setting up an LLC in Georgia
A Limited Liability Company (LLC) is a good choice for small business owners as it’s a simple way to form a business that protects your personal assets. If you have a sole proprietorship or partnership, your personal assets could be used to satisfy your business debts.
Setting up an LLC in Georgia is easy to do and maintain, unlike the more complicated set up for corporations.
Creating an LLC benefits you by:
- Saving your company from being taxed twice
- Protecting your personal assets against business lawsuits
- Making your business appear more trustworthy to customers
- Creating less paperwork than other types of business entities
The Five Steps to Setting Up an LLC in Georgia
Step One: Choose a name
This first step is a big one. You want a name that aptly describes what your business offers and is unique. No pressure.
Here are some tips:
- Follow the state’s naming requirements – and make sure it’s easy for your customers to remember.
- Include “limited liability company” or LLC
- Come up with a name that’s distinct from other businesses in the state. Note that you have a maximum of 80 characters including spaces and/or punctuation but that’s enough to get creative with.
- Avoid words that could be confused with a government agency – “FBI,” “Treasury,” or “State Department.”
- Consider the domain name for your website and check to see if it’s available. If it is, snag it fast before someone else does. After all, there’s no point in coming up with a tier 1 name if you can’t use that name as part of your URL.
- Check that the name you’ve come up with is actually available in Georgia by searching on the Secretary of State website.
- It’s available? Great! Reserve it for 30 days while you continue setting up your Georgia LLC.
- Go online and pay the Georgia Corporations Division a small fee. This can be done by mail; but there’s an extra charge for doing it ye olde-fashioned way.
- If your business is going to operate under a trade name — known as “Doing Business As” (DBA) — register that name too. The research continues. You’ll also need to make sure this name is available. Unlike your LLC, it gets registered with the county you primarily do business in — not at the state level.
Step Two: Appoint a registered agent
When forming an LLC in Georgia, you’ll need to appoint a registered agent who has a registered physical address in the state. This person or business is your business’s point of contact with the state of Georgia. They’ll receive all your official business mail like tax forms, government correspondence and legal notices.
But you don’t have to appoint an official registration service for this. You can appoint yourself or a trusted friend or family member. If you choose to appoint yourself, you need to be prepared to furnish the state with your business address – which for many solo biz owners will mean their home address.
Appointing an external service to act as your registered agent has several benefits. A professional service can make sure your business is compliant with state regulations and can act as an intermediary to receive legal notices in case your company is ever sued.
Step Three: File your Articles of Organization & Transmittal Form
Okay. You’ve registered your biz name and appointed a registered agent. Next up, you’ll be filing your articles of organization Form CD 030 – Articles of Organization with the Georgia Secretary of State Corporations Division. The articles and transmittal form are the documents that actually form your LLC in Georgia! The filing fee in Georgia is $100 and the articles must include:
- LLC’s exact name and reservation number
- Signature or your attorney signature
- Name and address
- LLC’s mailing address –if different from yours
- Date you want the LLC to be effective
Georgia LLC approval time
If you file your Articles of Organization online, you should hear if your LLC has been approved within five to seven business days. If you do it by mail, it can take up to two weeks.
Here are the fees for expedited service:
- $100 for two business days
- $250 for same-business day
- $1,000 for one hour (if registering by mail)
Step Four: Create a Georgia LLC Operating Agreement
Georgia doesn’t require an operating agreement, but if your business has more than one member, it’s a good idea to put one in place. The operating agreement lays out how the LLC will be managed both financially and operationally. It should define who the LLC members are and what percentage of the company they own.
It should also detail:
- How your LLC will be managed
- How taxes are paid
- How your business profits or losses are paid amongst its members
If you create one, you don’t need to send it to the state, just keep it with all your other important documents.
Step Five: Get your Georgia LLC EIN
Your EIN or Employer Identification Number is a nine-digit number given to your business by the Internal Revenue Service for tax purposes. Just like what your Social Security Number is to you personally.
There are several benefits to having an EIN. It enables you to:
- Open an LLC bank account for your business
- Limit your liability by separating your personal and business finances
- Apply for business licenses
- Get business loans or lines of credit
- Obtain a business credit card
- Help prevent identity theft and fraud by protecting your personal information
LLC or EIN — Which comes first?
It’s best to wait until your Georgia LLC is approved or you could end up with an EIN for a non-existent LLC. Gotta love those acronyms, eh?
Your EIN needs a “responsible party” to go on file – basically the contact person for all communications from the IRS. If you’re a business of one, and create a single-member LLC in Georgia, you are the responsible party. Yay, you!
Georgia EIN cost
The good news is, after paying the other charges to get set up, getting an EIN for your LLC doesn’t cost anything. That’s right, it’s free!
Georgia LLC costs
Here’s how much it costs to start and operate an LLC in Georgia:
- Online filing fee: $100
- Annual registration fee: $50
- Registered agent service: starts at $39
- Name reservation: $25
- DBA filing: ~$170 (varies by county)
- Certificate document copies: $10
- Certificate of existence: $10
Georgia LLC FAQs
Do I need a Taxpayer Identification Number (TIN) in Georgia?
The TIN is simply an umbrella term for all the ID numbers issued by the IRS and the Social Security Administration and used in the U.S. tax system. These include, Social Security Number (SSN), Employer Identification Number (EIN), and Individual Taxpayer Identification Number (ITIN). If you’ve applied and received the EIN for your business, then you’re covered. That was easy!
Should I form an S Corp or an LLC?
The crucial question of whether to form an S Corp or an LLC is common – especially for those who’ve also wondered how to set up a sole proprietorship in Georgia. While the two things are often considered similar, it’s not an “either/or” situation since they actually refer to different parts of business.
An S Corp is a tax classification that means your business should be taxed as a partnership. An LLC is a type of business entity. If you decide to go with the S Corp, your business first has to become either an LLC or a C Corp and must meet specific IRS guidelines to qualify.
How is an LLC taxed in Georgia?
Most LLCs in Georgia are known as “pass-through tax entities” meaning that the LLC member – you, the business owner – are responsible for paying tax, not the company. This is the default arrangement unless your LLC elects to be taxed as an S or C Corp, in which case, your company would file a separate tax return.
Georgia taxes corporations at a flat 6 percent with adjustments and assesses net worth, or franchise tax too. However, as an LLC member, you also have to pay franchise tax on top of your personal income tax.
Can you form a Georgia LLC for free?
Any business owner can create their own LLC without paying for professional help, which can certainly minimize outlay. But you’ll still have to pay the Georgia LLC cost of $100 to register your company.
Be wary of certain companies that offer “free LLC registration.” If you do hire an external service, be sure that you pick one with a stellar reputation, like Collective. Typically, if you hire someone else to create your LLC for you, you’ll still be on the hook for the registration fee, anyway.
Who needs a Georgia business license?
Almost every business operating in Georgia needs a city or county license to practice. The type of license needed will correspond with the type of business you plan to open.
The good news is that licenses are fairly easy to get. However, if you plan to open a restaurant, bar, or grocery that sells alcohol, you’ll also need an alcohol license.
And, if you plan to charge a membership fee to the public for access to your place of business, you’ll need a buying service license.
Is Georgia a good state to form an LLC in?
Short answer: Yes. Georgia offers very favorable business incentives. Small businesses and startups can benefit from several perks such as tax relief, tax credits and financing options in the Peach State.
If you live and do business in Georgia, it makes sense to file your LLC there. You can file an LLC in any state — and some do have more favorable terms. But as your home state, it will cost less to file locally as a domestic LLC.
If you choose to form an LLC in another state, for example, Delaware, to take advantage of that state’s business-friendly laws, you would then have to go back and register your business in Georgia as a foreign LLC as well. This strategy would garner you double the paperwork and fees.
Another reason to keep it local? You may be more familiar with Georgia laws and government offices, which can simplify the whole process.
Hopefully, you now have answers to ALL your burning questions on how to form a Georgia LLC. So, no matter what your jam is — whether it’s selling peach preserves or something else entirely — you’re now armed with the know-how to take the leap and become an LLC.
Janie Basile is a freelance content creator from Scotland with 20 years’ experience crafting content for insurance and technology startups and financial services companies. After taking the leap, a few years ago, into the world of freelancing, she is fully immersed in learning all there is to know about financially managing a Business-of-One. She enjoys passing that intel on to other solo entrepreneurs in the form of interesting and informative articles. Her work has appeared in places like TechCrunch, Redfin, TheZebra, and Freedom Financial.