12 Steps to Starting an LLC in Georgia in 2022

Why Start an LLC in Georgia?

A limited liability company (LLC) is a common business structure that can help a small business owner in a number of ways. If you reside in Georgia, there are some major benefits to starting an LLC as opposed to other business entity structures. 

For starters, Georgia makes LLC formation relatively easy. Georgia’s LLC filing fee is $100 online (or $110 to file by mail) with an annual recurring fee of $50, making it relatively affordable compared to other states. You can also file your forms entirely online, which makes it easy to get started. Georgia’s laws don’t dictate that you need an operating agreement when forming an LLC, although most experts agree that you should probably have one, anyway.

Then there are the benefits of having an LLC as opposed to a sole proprietorship or other business structure. First of all, you gain liability protection for yourself and your personal assets from the company’s debt obligations. You can also choose your federal tax treatment as an LLC, meaning that you can either be a single-member LLC or a partnership. For a single-member LLC you’re regarded as a pass-through entity, meaning that instead of the business itself paying taxes, the partners or owners pay income tax based on their share of the profits. 

Having an LLC can also make you more attractive to lenders if you’re applying for small business loans, and it can make it easier to get business credit cards, too. It can also be a great way to start building business credit (learn how to establish business credit from Nav’s experts). And having an LLC can make your business appear more legitimate for customers and clients. 

There are, of course, reasons why you might not want to start an LLC in Georgia. A general partnership or sole proprietorship will require less paperwork than an LLC. If you’re looking to raise capital through investors, it can be more difficult with an LLC than with a corporation entity. Also, the payroll taxes in Georgia are higher than other states, especially if you decide to hire employees. 

12 Steps to Starting a Georgia LLC

Whether you’re in Atlanta, Athens, Savannah, or Macon, creating an LLC in Georgia is a great way to help establish your business. If you’re ready to form an LLC in Georgia, follow these 12 steps. 

1. Name your LLC

Choosing a business name is an important first step in starting your LLC in Georgia. An LLC name can help differentiate you from competitors and let the Internal Revenue Service (IRS) know who you are. Your company name must be unique from other Georgia businesses (you can do a name search at Georgia’s business search website to determine that) and you’ll have to end your name with one of the abbreviations for limited liability corporation (LLC, L.L.C., Ltd., etc.). You’ll want to determine what abbreviations and doing business as (DBA) names you may also operate under. Don’t worry about getting too creative with naming your business — you can even use your own personal name if you’d like. If you pick a name for your LLC but aren’t quite ready to register, you can file a name reservation with the Georgia Secretary of State for $25. 

2. Get a registered agent

Although some entrepreneurs skip this step, we highly recommend finding a registered agent to handle your business registration paperwork. This can help immensely with compliance, privacy, and discretion as a business owner. A registered agent can also give you flexibility, because as your point of contact for legal documents and government notices, they’re the ones who have to maintain normal business hours, while you can go about your business however you’d like. 

In Georgia, you can serve as your own registered agent, but only if you meet the requirements put forth by the state, which include:

• Being over the age of 18
• Having a physical mailing address in the state of Georgia (not a P.O. Box)

Also, you have to differentiate your personal identity as the registered agent, because an LLC cannot represent itself as a registered agent. 

As part of business formation services, a Georgia registered agent service will serve as your business’s point of contact for the secretary of state or other government agencies throughout the process of forming an LLC. They also receive legal documents and correspondence on your behalf and receive service of process (notifications of lawsuits). Your registered agent will need to have a physical address (not a P.O. Box) in the state. In general, you can use their street address for your business mailing address to help protect your privacy, too. Some business owners choose an individual like an accountant to act as their registered agent, but you can also use a corporation.

3. File “Articles of Organization”

Articles of organization are the documents that establish your company as a legal entity. If you hire a registered agent, they’ll be able to handle this step for you. To file articles of organization in Georgia, you’ll fill out the appropriate form on the Georgia Corporations Division website and pay the $100 filing fee. The secretary of state will then issue you a certificate of existence. It’s easiest to file online, but you can also mail your application by downloading Form CD 030 and including a payment for $110. 

If you file online, the state will process your application in seven business days after transmittal. If you mail your Georgia LLC filing, it takes 15 business days for the state to process the application and send you the Georgia articles of organization. There’s also the option to file in person, which can speed up the process. The state charges fees for expediting processing, including:

• $100 to process within two business days
• $250 to process in the same business day (as long as you submit it before noon on a weekday)
• $1,000 to process in one hour

4. Create an operating agreement

As we mentioned before, an LLC operating agreement isn’t legally required in Georgia, but it’s still a best practice to have one in place. An operating agreement is a basic legal outline of your business, establishing ownership percentages, management structure, partnership rules including voting and decision making, and outlining the rules on how the business can be dissolved. If you don’t create this document, there’s a standard operating agreement in Georgia that your business will operate under. 

5. Get an EIN or Employer Identification Number

An employer identification number or EIN is how the Internal Revenue Service (IRS) identifies you. Much like your personal Social Security number, an EIN is unique to your business and allows you to file taxes. Every EIN is a unique nine-digit number assigned by the IRS after you apply. To get your EIN online, apply at IRS.gov. Your registered agent can also perform this step for you. 

6. Select the right insurance for your Georgia business

It’s a good idea for any business to have insurance to protect you and your business, but in Georgia, you may be required to carry certain insurance depending on your industry. A few examples of insurance you may need include:

• Liability insurance
• Workers’ compensation
• Property insurance
• Car insurance

Keep in mind that insurance is not the same as business licenses or certifications that allow you to operate your business. 

7. Learn about Georgia tax and IRS tax requirements

Depending on your filing status, you’ll have to pay state taxes in Georgia and federally for your company. Most LLCs don’t pay taxes as a company; instead, their members pay taxes as individuals based on their income from the LLC. It’s a good idea to talk with a tax advisor such as an accountant or your registered agent to determine how you want to file your taxes. Georgia offers tax incentives for businesses that may apply to your Georgia limited liability company. 

8. Add annual filing dates to your calendar

Georgia state requires you to refile your LLC every year between January 1 and April 1 and pay a $50 registration fee, regardless of when you first filed your articles of organization. Your registered agent can handle this for you, but you should also keep a reminder in your calendar to make sure that your annual registration is completed as long as you’re in business. This can be accomplished through an annual report, although Georgia doesn’t specifically require an annual report to refile. 

9. Get a business checking account

We can’t recommend this strongly enough: it’s important to have a business bank account to keep your personal finances separate from your business finances. This will simplify tax time for you and help uncomplicate business financials. There are many options for a business bank account, which can integrate with your Nav account to help you determine your business’s financial health over time. 

10. Build credit for your new LLC

Your business has credit scores, just like your personal credit scores, which can help determine your creditworthiness to financial institutions, creditors, and even possible customers. These scores are reported by major credit bureaus and are influenced by a number of factors, such as how much debt your company has, how long you’ve been in business, and your annual revenue. Learn how to establish business credit and how to improve it over time.  

11. Choose an accounting system

Effective LLC owners maintain good accounting as part of their business hygiene for a number of reasons, including tax purposes and having a broad understanding of your business’s financial health. Make sure you set up your accounting system before you start earning income to help you stay organized. It’s easier to keep a good accounting habit going from the start of your business than to try to play catch up months down the line when you realize you need to organize everything to submit your tax return. It’s also a great idea to hire professional services to handle your accounting for you, but you can also do this in-house with accounting software, especially as a startup or small business. 

12. Decide on how you’ll prepare for and finance business growth

No matter what type of business you’re starting in Georgia, you should always have an eye toward growing your business. Whether it’s adding new employees, expanding your marketing efforts, moving into new or larger locations, or offering new services or products, there are always ways to expand your business. Get to know the types of business financing available and find out what will work for your business. Nav can help you see what financing options you’re most likely to qualify for that will work for your industry and situation. Sign up for a free Nav account to start seeing your options today. 

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