When Starting an LLC in Georgia, You Must Address 4 Initial Matters
When starting an LLC in Georgia, there are 4 initial areas which require sufficient thought and decisions. Without properly addressing these 4 things, there is the risk of an improper or incomplete formation of your Ga limited liability company.
NAME ACCEPTABLE IN GEORGIA
The first matter is deciding on a proper name for your LLC in Georgia. The regulations require that a name of a new entity cannot be the same as or too similar to another name being used by a business registered in Georgia. Unfortunately, it is not always clear when a name is too similar to another name that is already registered with the state.
You can call the Georgia state agency to check on names or a reputable online formation service will provide this service for you as part of its formation services.
GEORGIA REGISTERED AGENT
The second matter is determining who the registered agent will be for your Ga limited liability company. In Georgia, every LLC must appoint and continuously maintain a registered agent who has a permanent physical address in the state where legal and other important papers can be delivered to the business.
While the LLC itself cannot serve as its own registered agent, any person or entity that has a permanent, physical address located in Georgia can be appointed. While the Ga registered agent is purely an administrative task, it is an important role because it involves accepting legal papers and official documents.
ESTABLISHING OWNERSHIP AND GOVERNANCE
Third, soon after starting an LLC in Georgia, you must come up with a plan for preparing and adopting a Georgia LLC Operating Agreement. The LLC Agreement is a private document meaning it is not filed with the state but it establishes the ownership and management structure of your business entity.
The formation process itself with the state of Georgia creates the legal shell entity itself. However, additional action is necessary to establish the owners to the Ga limited liability company.
Having a written Georgia LLC Operating Agreement will also provide, in effect, a user manual for your Georgia LLC which in turn will make operating your business go more smoothly and with a significantly reduced chance for disputes and problems among owners and operators of the business.
ENSURING PROPER LLC FORMATION
Fourth, once the above matters are decided, you should decide whether you are going to organize your Ga limited liability company yourself or use a third party to help you. While many choose to use a business attorney, it is not necessarily for the actual formation of the business entity. The rules and requirements are straightforward but there are ones to learn about to avoid any delays or improper actions in the process.
Others decide to perform this service themselves. If so, just make sure you review the pertinent sections of the Georgia LLC Act and the documents and instructions put out by the Georgia state agency.
The most popular option is to use an online formation services company. For an affordable price, you can save time, money and stress, and more importantly gain peace of mind by leveraging the expertise of a reputable filing service to take care of this step for you. Just be sure you are using one that is experienced and reputable when it comes to knowing the steps to starting an LLC in Georgia.
Benefits of the LLC – Limited Liability Company
If you are thinking of starting a new business, one necessary matter is determining what business structure you will use. There are 4 major benefits of an LLC for a business owner. Given the low costs to forming an LLC, learn how the limited liability company can help you with liability protection and to create a profitable business.
LIABILITY PROTECTION
The greatest of all benefits of an LLC is protection from being personally liable for the debts and obligations of your business. Without the use of a limited liability entity such as an LLC, you would be placing everything you own at risk. In the world today where the number of lawsuits filed every day is always increasing, this liability protection is so important.
TRUSTORWORTHY IMAGE
The second of the benefits of an LLC is that it positions your business as a more trustworthy business. Just the mere fact that the business owners chose a limited liability company as the official business vehicle to run and operate their business evidences intelligent and serious planning.
Anyone can come up with a name and call themselves a business. With so many fly by night and fake businesses out there, customers seem to distinguish the legal entity businesses as more trustworthy.
By forming a limited liability company as your business, you will be perceived as more trustworthy which goes a long way for a new business when it comes to getting new customers and establishing your brand.
TAX CHOICES AND LEGITIMACY
Another great advantage is that the LLC business qualifies for a single layer of taxation without having to meet any complex requirements with the Internal Revenue Service. This tax structure is helpful to the new business owner because it avoids the double taxation of the corporate tax structure and allows owners to take advantages of business losses on their personal tax returns each year.
In a few cases, the corporation tax structures may be more beneficial than the single layer tax structure. In this event, an LLC is allowed to elect to be taxed under a corporate tax structure. After forming a limited liability company, the LLC must make an election for this tax treatment within 75 days.
When it comes to taxation, business owners should keep proper records and follow the proper tax and accounting procedures to avoid tax audits. Sole proprietorships are at least 6 times more likely to get audited. This has to do with business legitimacy. As with customers, the IRS knows that it is easy for someone to claim they have a sole proprietorship business and try to claim business deductions.
By going through the effort of forming a limited liability company and operating a business through an LLC, it is a sign of a higher likelihood of a legitimate business with valid business deductions.
OPERATIONAL SIMPLICITY AND FLEXIBILITY
The fourth of the benefits of an LLC include simplicity and operational flexibility. The laws allow the members to determine the best set of operational and governance rules applicable to their business.
This is a great benefit because after forming a limited liability company because you are able to customize the rules for how your LLC will be most effectively operated.
While I have outlined several benefits, the limited liability company offers so much more. When forming a limited liability company, the costs are minimal and the entity is designed to be easy to maintain and operate.
Form an LLC in Delaware – Why You Should Do It
When most budding entrepreneurs get their chance to start their first company, their first choice is usually an LLC (limited liability company). This type of company is easy to set up and provides protection, or “limited liability”, to its owners. All this means is that if the LLC you set up acquires any debt, is sued, or has to make payments, you won’t be held liable to take out the funds from your personal finances – it all has to come from the company. It’s an easy, straightforward way to create a legal separation between your personal and business assets.
For many of these new companies, their owners usually want to form the LLC in Delaware. Now, you might think that forming an LLC sounds fitting for your business, but why set it up in Delaware?
First of all, Delaware is considered a “business friendly state”. More than half of Fortune 500 companies register their main office in Delaware, and current records show that almost a million businesses have already been registered in the state. The business environment makes it reason enough for most new businesses to set up there. After all, you can easily build your network locally. But we’ve just scratched the surface here. There are deeper and better reasons why it’s a good idea to form an LLC in Delaware.
Delaware’s high number and variety of local businesses means that they have a broad body of business laws. Add this to their legal experiences with businesses, it means that their courts can handle even the trickiest issues. In fact Delaware’s court for corporations, Chancery Court, has a reputation for being one of the best in the United States. Their laws are also good for business. For example, they don’t usually tax you for out-of-state income.
Another reason is that most legal textbooks and law schools teach Delaware business laws, making most American lawyers familiar with these laws. Even if you hire a lawyer from outside the state, odds are that they are very familiar with Delaware business laws. You won’t have trouble looking for legal advice or representation for your business.
Lastly, Delaware is known for fast document processing. The businesses that set up in Delaware provide the State with additional revenue that has allowed them to invest in state-of-the-art equipment. You can often submit your documents electronically, and filing your paperwork takes considerably less when compared to other states.
If you look at all these reasons, you’ll see that it’s almost ideal to form your LLC in Delaware, especially if you live in or near the state. The only thing you need to know now, of course, are the steps you need to take to register your business.