How to Incorporate in Georgia vs. How to Start a Georgia LLC
A Guide to Choosing the Best Business Entity in Georgia
Have you always wanted to start a business in Georgia but you have no idea what the difference between an LLC and a corporation is? Let Active Filings be your guide through the jungle of business startup. We’ve put together a Georgia-specific easy to use guide that will help you decide whether an LLC or corporation is right for you. We’ll streamline the signup process and make it as smooth as possible.
Sure you can sign up with a more expensive company managed by hedge fund billionaires, or you can choose Active Filings, a small company like yours. We’ve been around since 2001. Our starter package begins at only $25 (plus state fees), and we’re sure that you’ll find out in no time why Active Filings is America’s most reliable business incorporation service.
Georgia LLCs vs. Georgia Corporations (Which is Better)
Let’s take a quick look at some of the structural differences between corporations and LLCs. People looking to start a business often ask whether they should set up an LLC or incorporate for their new venture. Like everything else in life, the answer depends. Below you’ll find the three factors we think will help you make an informed decision.
- Ease of maintenance
Corporations have to keep minutes, hold meetings, and record votes and resolutions. LLCs require none of these things, saving you time and the overall hassle. There are fewer forms required for registering, and there are generally fewer start-up costs. The knock against LLCs is that they aren’t perpetual. Unless your LLC’s operating agreement specifies exactly what happens in the event a member dies, resigns or declares bankruptcy, most states require that LLCs dissolve when these events occur. Corporations, however, can exist as their own entity, regardless of what happens to the individuals involved in the business.
- Desired tax structure
By default an LLC is a pass-through tax entity, meaning that the income is not taxed at the company level. The income or loss as shown on this return is ‘passed through’ the business entity to the individual members, and is reported on their individual tax returns. Less paperwork. More straightforward. A corporation is a separately taxable entity, and pays tax on the income prior to any dividend distributions to shareholders. If and when corporate earnings are distributed to shareholders in the form of dividends, the corporation does not receive the reasonable business expense deduction, and dividend income is taxed as regular income to the shareholders. Complicated. Paperwork. The Alaska LLC wins this one.
When it comes to investing in a company, most investors feel most comfortable investing their hard earned money into corporations. The biggest reason investors prefer corporations is their favorable taxation rules. Unlike LLCs, a corporation’s shareholders are not taxed on company profits unless profits are distributed, which means the dividends paid from the corporation can be structured to take advantage of the best tax scenario for the shareholders. If you plan to grow your small business into a larger entity and attract investors, forming a corporation is your best bet.
Advantages and Disadvantages of Georgia LLCs and Corporations
While we’ve already broken down the differences between an LLC and a corporation, we’re going to dig a bit deeper into the pros and cons of forming an Georgia LLC or corporation. Take a look below to see what makes Georgia LLCs and corporations unique:
Georgia LLC or Georgia Corporation? Final Answer
We’re going to go out on a limb and say the LLC is your best bet for almost everything you’ll need in terms of a business entity. It will be your best choice if you are operating a small or medium-sized business, and investors are not one of your top priorities. If your business will be growing substantially and investors will be the key for that growth, and you have the means for the amount of paperwork required and understand the difference in the asset protection, your best bet will be to form a corporation.
How to Incorporate in Georgia
It costs $100 to file your Articles of Incorporation with the Georgia Corporations Division. You can file the document online or by mail. If you choose Active Filings, we’ll make sure the process of incorporation is as painless and straightforward as possible.
Here’s a quick over view of the information you’ll need in order to properly fill out your company’s Articles of Incorporation:
You must include “Corporation,” “Incorporated,” “Limited” or an abbreviation for one of these words. Most corporations keep it short and sweet with “Corp” or “Inc.”
List the number of shares you’re creating. You must create at least one.
A registered agent is an individual or company that receives service of process, legal documents, and official notices on your business’s behalf. You can be your corporation’s registered agent, or you can hire Active Filings. Hiring us simply makes your life easier.
The state just wants to know where to send all of your company’s legal documents. Additionally, this will be the place where any process of service will be served. Hire us an avoid dealing with junk mail and as an added benefit, keep your address out of public record.
Your incorporator is the person authorized to submit your Articles to the state. They have to include their name and address and signature, as well as state the capacity in which they are signing. Hire Active Filings and we’ll take care of this for you.
The address you give here will be where the state will send all mail that isn’t official legal documentation (that goes to your registered office). Keep things simple and have Active Filings act as both your registered and principal office.
You’re required to submit a Transmittal Form, which mirrors some of the information on the Articles. It also makes you verify that you have sent (or are sending) a Notice of Intent to Incorporate to a local newspaper and requests a primary email address for your business. Hire Active Filings and avoid having your email bombarded with spam.
How to Start an LLC in Georgia
To start an LLC in Georgia, you must file Articles of Organization with the Georgia Corporations Division. You can file the document online or by mail. The Articles of Organization cost $100 to file. Your name and address are required on these forms. Hiring Active Filings as your registered agent allows you to use our information instead.
Your LLC’s name must include “Limited Liability Company,” “Limited Company,” or an abbreviation like “LLC.” You can’t pick a name already in use in Georgia, and your name can’t exceed 80 characters including spaces. Example: Bob’s Burger Barn, LLC.
If filing online, you’ll see this optional section. If you choose to add this information, you can select the code that best matches your business activities.
This is where the state will send you mail (other than the legal notices that will go to your registered agent). Want to simplify things and have all your mail sent to the same place? When you hire Active Filings, you can use our address here.
This is how Georgia wants to reach you, sending you notifications and updates, as well as important due dates for your LLC. If you love junk emails, put your email address here. If you’d rather let someone else deal with that mess, hire Active Filings.
Your registered agent must be a Georgia resident (you can act as your own registered agent) or a business that offers resident agent service. Active Filings has your back. When you hire us we’ll act as your registered agent.
Your LLC organizer forms and files your Articles of Organization. The organizer doesn’t have to be a member, manager, or anyone connected to the LLC. In fact, Active Filings is happy to act as your organizer.
If you want your business to start right away, leave the “yes” selected. If you prefer to push out your start date (maybe the next tax period is right around the corner), you can enter an effective date up to 90 days in the future.
Someone has to sign and date your Articles of Organization. Most likely this person is you, unless you hire Active Filings, in which case our info goes here, and we’ll be your Authorizer.