People who are interested in starting a business have a variety of things that they have to consider. One of these is that they need to determine what type of structure to use for the company.
There are many different options available. One of these is the limited liability company, which is sometimes referred to as an LLC. This business structure has considerable flexibility and certain protections. Learning a bit about this structure may help you to determine if this is the best option for your new business.
1. Protection for the owner
Protection for the owner of the business is built into the structure of the LLC. Once you establish an LLC, the business is its own entity. There’s a dividing line between your assets and the company’s assets. This means that if the business is sued for any reason, your personal assets can’t be claimed to satisfy an award or judgment for the business.
2. Specific formation requirements
When forming an LLC in Georgia, the initial step is choosing a unique business name that complies with state regulations. It must include “LLC” or similar designators.
Next, appoint a registered agent in Georgia for legal correspondence. You also must file the articles of organization with the Georgia Secretary of State, which involves a $100 fee, as of December 2023.
Depending on the county, you may need to publish a notice in a local newspaper about your intent to form an LLC. While not mandatory, drafting an operating agreement is recommended for internal management and liability clarification.
Finally, ensure compliance with local and state requirements by obtaining business licenses and permits. Additionally, Georgia requires an annual registration fee for LLCs, which is vital for maintaining good standing in the state.
3. Taxation considerations
LLCs in Georgia benefit from pass-through taxation, meaning the company itself isn’t taxed. Instead, profits and losses are reported on your personal tax returns. However, you must pay self-employment taxes on your earnings from the LLC.
Forming an LLC must be handled in a precise manner to ensure you benefit from this type of structure. Working with someone familiar with business formation may help ensure this is all properly handled.