As you probably already know, forming an LLC is just the beginning. To keep your business in good standing with the state, you must meet periodic requirements. As you complete the business formation process and begin operating your LLC, keep the following in mind: Georgia has some unique requirements.
Tax options and requirements
Once you form your business, you need to decide how your company will pay Georgia LLC taxes. By default, LLCs are taxed as sole proprietorships or partnerships. Most LLCs are “pass-through” entities rather than paying taxes on their profits and losses as corporations. Members report income or loss with their personal income tax returns. They also pay self-employment taxes along with personal state and federal income taxes. Some LLCs may be eligible to file taxes as an S-corp or C-corp. These are alternative business taxation models that have different benefits for state and federal taxes.
Some Georgia LLCs may have to pay state business income taxes, such as Georgia corporate income tax and net worth tax. Georgia sales tax may also apply to you if you sell certain types of products (such as alcohol or tobacco), have employees, or work in certain industries. You can find more information and register your business if applicable from the Georgia Department of Revenue.
Inside scoop: Consulting with a tax professional who specializes in Georgia LLCs and small businesses can help you better understand your tax options and responsibilities. LLC Formation Services may offer tax preparation and advisory services as part of a package or for an additional fee.
Submit your annual report
Like most states, to keep your business current, you must file an annual report with Georgia, called an annual registration, and pay a $50 annual fee.
Opening an LLC bank account
Once you have a new EIN, you can use it to open a bank account, obtain a line of credit, and apply for a business credit card. It's important to clearly separate your business accounts and personal finances. Don't use your personal account to cash checks or accept business payments. This type of “commingling” of assets can erode the limited liability protection of a Georgia LLC.
Business and employment insurance
Georgia LLCs may be required to carry some type of business insurance. For business insurance, contact your local insurance agent. It can provide additional protection if your business is sued or engages in risky activities. If as part of an LLC he plans to employ three or more employees, Georgia requires him to register for workers' compensation insurance. Double-check the requirements online and check Georgia coverage after signing up.
Tips to support your new LLC: Georgia resources
Learning how to form an LLC in GA is just the beginning of your business journey. Fortunately, Georgia has many resources to help you learn how to make your business venture a success. These organizations can help you find funding, apply for grants and loans, connect with mentors, learn marketing skills, and more. Some helpful resources include:
Many specialty industries call Georgia home. If you're starting an LLC in one of these areas, check out these industry-specific resources:
- Georgia offers tax credits and production incentives for many projects in the film industry.Find out if your project is eligible
- If your LLC is focused on energy efficiency or renewable energy solutions, you may want to explore State Energy Program (SEP) financial assistance and technical support programs.
- The Georgia Office of Historic Preservation provides financial support for historic preservation efforts through tax incentives and grant programs.
- Efforts to increase tourism to Georgia include attractive tax incentives and incentives for businesses building new tourism attraction projects.
LLC Details: Types of Business Entities in Georgia
What exactly is an LLC? “Limited Liability Company” (LLC) is a legal term that designates a company as its own business entity. Separating business matters from personal finances in this way protects you from the consequences of personal liability, debt, and taxes. One of the biggest reasons to form an LLC in Georgia is to get this liability protection. By learning how to start an LLC with GA, you can protect your home, car, and personal assets from the financial risks that come with starting a new business.
One definition of an LLC is that it is a hybrid of a corporation (a formal business structure) and a sole proprietorship and partnership (an informal business structure). Although the LLC business structure provides many legal and financial protections available to large corporations, LLCs are easier to form and operate. There are very few incorporation formalities required in Georgia to maintain an LLC. Once up and running, simply submit your annual report (and pay the corresponding annual fee).
Additionally, LLCs enjoy the advantageous tax features of sole proprietorships and general partnerships, or “pass-through” taxation. This means that the income of the business is passed through to the members or owners and is taxed as personal income. This avoids the double tax that businesses have to pay (corporate income tax and personal income tax for business owners).
Why should I learn how to form an LLC in GA?
Georgia has many small business incentives that encourage residents to start new companies and grow toward success. The state has a low corporate tax rate and offers many other tax breaks for businesses of all sizes in Georgia.
Forming an LLC in Georgia is a low-cost and relatively easy way to take advantage of these states and increase the profitability of your business. If you're ready to learn how to start an LLC in GA, this guide will help you get started.
