Georgia can be a great place to start a business for all types of entrepreneurs. From its relatively low company registration fees and generally pleasant weather to its talent pipeline fed from well-regarded public universities, the Peach State has a lot to offer.
And starting a limited liability company (LLC) in Georgia can be an excellent choice for those looking to establish a business structure that can limit their personal risk.
In this guide on starting an LLC in Georgia, we’ll examine the seven main steps you’ll need to take.
We’ll also dive deeper into the pros and cons of forming an LLC in Georgia. Plus, answer some of the most frequently asked questions on how to start an LLC in Georgia.
Table of contents
- Step 1: Choose a business name for your Georgia LLC
- Step 2: Designate a registered agent
- Step 3: File the Georgia LLC Articles of Organization
- Step 4: Obtain an EIN (Employer Identification Number) from the IRS
- Step 5: Register with the Georgia Department of Revenue and Department of Labor
- Step 6: Prepare an LLC operating agreement
- Step 7: Open a Georgia business bank account
- Taxes, costs, and fees in Georgia for LLC
- Business permits and licenses in Georgia
- Pros and cons of forming an LLC in Georgia
- Key takeaways
- Formation FAQs for an LLC in Georgia
Step 1: Choose a business name for your Georgia LLC
Choosing a name for your LLC is the first company formation step. In Georgia, as in many other states, your LLC’s business name needs to be distinguishable from other registered corporations, LLCs, and limited partnerships in the state.
To see if a business name is available in Georgia, you can use the online search tool on the Secretary of State (SOS) website. However, this database does not officially determine if a name is available. Instead, you can lock in your name when you register with the state.
If you have a good idea for a name but aren’t quite ready to submit the rest of your LLC paperwork, you can submit a name reservation request to the Georgia SOS for $25.
When doing so, you can submit up to three name choices in case some are taken already. If approved, your name reservation is valid for 30 days, so you’ll want to file the rest of your LLC paperwork by then.
If you’re still not ready, you can renew the reservation for extra 30 days and pay an additional $25 fee.
Some businesses may use a trade name as an alternative to their legal LLC name. Georgia law generally requires companies that use a trade name, which is sometimes called a DBA or fictitious name, to register with the Clerk of Superior Court offices where they’re located.
Trade name registration costs differ slightly among different counties in Georgia. But to give you an example, the rate is $171 in Fulton County, where Atlanta is located.
Also, remember that registering a trade name typically doesn’t provide the same protection as LLC incorporation. Thus, you may also want to take legal steps like trademarking your trade name, for example.
Step 2: Designate a registered agent
After picking out a name for your LLC, you’ll need to designate a registered agent. A registered agent is simply a person or company with a street address in Georgia that receives your official mail and other types of communication.
Georgia limited liability companies need a registered agent located within the state who’s available at the designated address during regular business hours, whether a home address or an office. You can’t use a P.O. box.
You or another member of your LLC can be the registered agent. But many businesses choose to use a third party such as a lawyer or company that provides registered agent services.
Hiring another party doesn’t have to be expensive. You can expect to spend $50 to $100 per year. One benefit of hiring a registered agent is that you get someone to help handle legal documents and important correspondence so that an official notice from the state isn’t lost in the mail.
Step 3: File the Georgia LLC Articles of Organization
The next step to forming an LLC in Georgia is to file your Articles of Organization. While there are still some things you need to do after, this filing officially establishes registers your business in the state.
Georgia provides a template you can use, but the state does recommend consulting with a professional such as an attorney to see if anything else should be added. For example, you may want to list the members of your LLC, especially if there’s more than one partner.
If you file by mail or in-person, be sure also to fill out and include the state’s transmittal form, which provides basic information such as the LLC’s mailing address, registered agent contact information, and member details. Or you can file online, which may be a more streamlined process.
The fees and processing times for the various ways to file Articles of Organization are as follows:
Fees and timing for filing Articles of Organization in Georgia
Standard filing fees
Standard processing time
|7 business days||15 business days|
Step 4: Obtain an EIN (Employer Identification Number) from the IRS
Depending on your type of operations, business owners may need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS).
An EIN, a federal tax ID, is required for LLCs with employees. But even some single-member LLCs need EINs. And you may want to obtain one to make it easier to open a business bank account for your new company. You may also need an EIN to register with the Georgia Department of Revenue and Department of Labor, as discussed in Step 5.
Plus, if you don’t have an EIN, you’ll need to use your personal social security number for many business forms and tax filings. So, you may prefer to keep the business and personal information separate.
Step 5: Register with the Georgia Department of Revenue and Department of Labor
In addition to registering with Georgia SOS, you also might need to register your LLC with the state’s Department of Revenue and Department of Labor.
For state tax purposes, many businesses need to register with the Georgia Department of Revenue. For example, if you need to collect sales tax or have employees and need to withhold tax for them. Check with the Georgia Secretary of State to confirm registration requirements.
Registering with the Georgia Department of Revenue for business tax purposes can easily be done online. In as little as 15 minutes after registering, you can receive your corresponding tax number via email. Note that some types of registration, such as for businesses selling alcohol, may take longer.
For unemployment insurance tax purposes, businesses need to separately register with the Georgia Department of Labor, even if they don’t have employees. Registration can quickly be done online, and you learn if you’re liable to pay unemployment insurance taxes. If you are, then you can set up an account to pay online.
Step 6: Prepare an LLC operating agreement
After registering with the relevant departments in Georgia, you’re almost at the finish line. But, to set your LLC up for success, you should prepare an LLC operating agreement.
An LLC operating agreement is a binding contract that covers operational and financial areas like how members can be added or removed from the LLC and how profits will be distributed. In addition to helping solidify how your LLC should operate, having this agreement in place can also protect your operations from member disputes.
To create your operating agreement, you have flexibility, such as using online templates or consulting with an attorney to draft one.
Expect to spend a couple of hundred dollars for help through an online platform, up to $1,000 if you turn to a lawyer. Keep in mind that while the costs of working with a professional may be more than creating an operating agreement yourself, it’s crucial to establish a proper one to protect your LLC’s structure.
Once you complete the operating agreement, you do not need to file it with officials in Georgia. Instead, you can keep it with your records.
Step 7: Open a Georgia business bank account
The last step regarding how to start an LLC in Georgia is to open a business bank account.
Having a separate bank account for your LLC can be important for several reasons, such as:
- Establishing the separation of personal and business assets for legal liability protection
- Avoiding confusion between personal finances and business finances
- Creating a sense of legitimacy for your business
When opening a business bank account in Georgia, you can choose from several options, such as:
E.g., Bank of America, Chase Bank. National banks may have more branches near you and more convenient services such as fully online banking.
Community banks and credit unions
E.g., SunMark Community Bank, Delta Community Credit Union. Community banks and credit unions can also be appealing in their ways, such as having more local community ties. Their requirements for opening a business bank account and obtaining other services may also be more flexible than national bank policies.
Fees to open a business bank account vary among different financial institutions. But many offer free business checking, as long as you meet a few requirements, such as conducting a set number of transactions per month or holding a certain amount of cash in the account.
Even if you don’t meet these requirements or can’t find a free account that works for you, a business bank account is still likely only to cost roughly $5-10 per month.
Georgia LLC taxes, costs, and fees
There are also some other costs to consider while operating your business, in addition to the company registration fees. These include:
Annual report fee
Every year after your initial LLC formation in Georgia, your business will have to file a report and pay a $50 renewal fee, though you can register for three years at one time (e.g., registering in 2021 for 2021, 2022, and 2023).
You can do so online through the Georgia Corporations Division, or you could mail or deliver the annual registration form in person.
On a federal level, you are expected to pay:
Personal income taxes: LLCs are typically considered pass-through entities for federal tax purposes, meaning the business isn’t taxed separately. Instead, business income passes through to the members. So, you’ll include the business income from your LLC on your personal tax return.
Employment taxes: LLC members pay self-employment tax (15.3%) for their share of the company’s profits. If you have additional employees, you also have to pay the employer’s share of Social Security and Medicare taxes (7.65% total) and federal unemployment tax (FUTA). The FUTA rate is 6% for the first $7,000 in wages per employee per year, but you can receive a credit for state unemployment tax paid.
While you should check with relevant authorities such as the Georgia Department of Revenue to determine your specific liabilities, some general guidelines for state taxes for LLCs include the following:
Sales taxes: Depending on what your business sells, you may need to charge your customers sales tax and then pay that amount to the state. Georgia has a state sales tax rate of 4%, though local areas can add their rates. For example, in Fulton County, excluding Atlanta, the combined sales tax rate is 7.75%, 8.9% within Atlanta.
Employment taxes: LLCs may have to pay employment-related taxes, such as unemployment taxes. If applicable, most new employers start with a 2.7% unemployment insurance tax rate.
Other local taxes: Depending on what you sell, you may face a few other local taxes. Or, you might receive tax credits, such as if you’re part of Georgia’s budding film industry.
Georgia business permits and licenses
At the state level, Georgia does not have a general business license requirement. However, you may have to obtain specific permits and licenses depending on your industry.
Fees for specialty licenses can vary significantly, such as $1,000 for a brewery license compared with $50 for a limousine license.
Certain jurisdictions within Georgia may also have their own permit and license requirements.
For example, Atlanta requires all businesses to obtain a general business license, which has a $75 registration fee.
Pros and cons of forming an LLC in Georgia
Starting an LLC in Georgia has many advantages compared to other states, including relatively low registration fees and no tax liabilities for small businesses filing taxes as sole proprietorship or S-corporation.
Still, there are a few potential drawbacks to keep in mind. Here’s a quick rundown:
Georgia LLC pros
- Relatively low LLC registration fees.
- No state franchise taxes.
- No state requirement for a general business license.
- You can be your own registered agent.
Georgia LLC cons
- When combined with the state tax rate, local sales taxes may be relatively high in some cities such as Atlanta.
- Different licensing requirements among various local jurisdictions may be a bit confusing to navigate.
- Need to complete annual registration.
- Registration processing may take longer than some states unless you pay for expedited service.
- Starting an LLC in Georgia can provide personal liability protection without too much heavy lifting.
- The cost to file your Articles of Organization to establish your LLC can be as low as $100, though total costs to start an LLC in Georgia might be a bit more, such as if you enlist the help of a professional.
- You can be your own registered agent in Georgia.
- Take a look at local laws around licenses, insurance, and taxes to ensure you follow proper protocol, which can differ among various counties or cities in Georgia.
Georgia LLC FAQs
Below are some of the most frequently asked questions about forming an LLC in Georgia.