How to start a business in Georgia
Everything you need to know to start your business in Georgia
The Georgian landscape is not only prime for some of the world's finest flora, it's also a nourishing breeding ground for startups.
In this post we'll take a closer look at startup scene in Georgia and outline the steps to launching your very own business in the Peach State.
Georgia for startups
Before we dive into the process of business establishment, it’s good to have an understanding of the startup environment in Georgia.
Here are some interesting startup facts:
Georgia is very accomodating to ambitious startups. So if you're waiting for the optimum time to launch your startup in Georgia, now is as good a time as any.
Planning your business in Georgia
The first step to starting a business is creating a business plan.
A business plan is an official document that summarises your business solution and your master plan to make it a success.
A well documented business plan will not only help you and your team stay aligned with your core business objectives, but it could also help you secure the funding you'll desperately need to fuel your business.
Thankfully, we have written an in-depth guide to crafting a winning business plan.
The typical business plan is comprised of the following chapters:
Sales and marketing
If you're not sure what type of business to launch, here's a list of the top trending business ideas in Georgia right now.
Fishing (boat hire / fishing tours)
Vehicle rental service
Bicycle shop (e-bikes, scooters etc)
Private investigator (for insurance companies, private companies)
Of course, you're not only limited to this list. You could successfully launch any business idea if you prove it’s viability with the appropriate market research.
Structuring and registering your business in Georgia
There are 7 main business structures, and all are applicable to both brick and mortar businesses and e-commerce businesses:
Limited Liability Company (LLC)
If you're confused about which structure to choose, read our in-depth guide on structuring your business for success.
The following initial steps are required regardless of which business structure you choose in Georgia:
Get your EIN
First, you'll need an Employer Identification Number (EIN), which is also your tax ID number. You won't be able to employ staff without an EIN.
You can register for an EIN through the IRS website.
Register for sales Tax
You'll need to register for sales tax if your business will be selling the following:
The following items are exempt from sales tax
Digital goods and services (besides some pre-written computer software purchased online).
For more details on the items that are subject and exempt from sales tax click here or consult with your accountant.
In order to legally collect sales tax you'll need to register for a sellers permit. An EIN is required to register for a sellers permit.
Obtain relevant licences and permits
The type of license you require depends on the nature of your business.
You'll need to obtain an alcohol license to legally sell liquor in Georgia.
If you'll be charging your customers a membership fee, you'll need a buying license.
These licences are for professions requiring a formal license in order to legally operate (such as nurses, accountants, etc).
To register for a “person” license click here.
Business facility licenses
For businesses such as barber shops and salons. To register for this license click here.
To register for a charity license click here.
All businesses operating in Atlanta require a general business license.
It's important to note that license requirements in the State of Georgia may differ between counties. For an up-to-date list of all your business licensing requirements, contact your Secretary of State.
You should also check with the Secretary of State's office whether you need a zoning permit to operate your business in its location, especially if you plan to operate your business from home.
For more details on employer tax click here.
Register a business name
If you plan on trading under a name other than your own, you'll need to register a business name (also known as a fictitious business name or a trade name).
If you're worried about your perfect trading name being registered by somebody else before you have a chance to get all of your documentation in order, you can reserve your name in advance with the Secretary of State.
You can also search the business name database to see if your preferred name is available.
To register a business name, you'll file a registration statement with your local Clerk of Superior Court.
To find the appropriate clerk for your county, click here and then search for your county. Ask your local clerk about the specific business name registration process for your county. This process applies to both Sole Proprietorships and General Partnerships.
You aren't required to register your business name with the Clerk of the Superior Court if your business structure is any of the following:
Charity (non profit)
These business structures automatically register their business names when they submit their Articles of Incorporation (more on that later).
Open a business banking account
It's important to separate all business transactions from personal transactions. This will make keeping track of your finances much easier and allow you to readily calculate your profits and losses.
Keeping all of your financial activities separate will also make your accountant’s life much easier.
New hire reporting
In the state of Georgia, all businesses are required to report all newly hired employees (including re-hired) to the Georgia New Hire Reporting Centre.
This is a Federal and state law requirement, so make sure you get it done ASAP.
There are a couple of other forms that need to be submitted for each new employee you hire:
To verify the legitimitate identify of all employees.
For employees that elect to have tax withheld from their wages.
With those formalities taken care of, now we can focus on the specific business structures in Georgia.
How to start a Sole Proprietorship in Georgia
If you're planning to run your business alone when you launch it, the simplest business structure to choose is a Sole Proprietorship.
As a sole proprietor your personal assets are indistinguishable from your business’ assets, so if a client sues you, you could potentially lose all of your belongings.
For this reason, some business owners choose to launch their business with a more secure structure, such as an LLC, especially if they sell high risk solutions (such as fintech, exercise equipment, food etc).
But don't let this risk deter you from launching as a Sole Proprietor. You always have the option of upgrading to a more secure structure at any time.
You can mitigate your risk as a Sole Proprietor by insuring yourself. To learn more about Sole Proprietorship insurance options, click here.
If you follow all of the above procedures, you'll essentially have completed all of the necessary steps of establishing a sole proprietorship.
The only remaining item to take care of is your taxation profile.
Tax details for Sole Proprietors in Georgia
As a new employer, you'll need to notify Georgia's taxation department of your intention to start trading as a business. To do this, you'll need to officially register yourself as a new business and employer via the Georgia Tax Center website (under “registrations” click on “register a new Georgian business”).
Because Sole Proprietors and their business are considered a single entity, they're only taxed at a personal level (personal income tax). Just be sure to also collect sales tax if you'll be selling products that are subject to such taxation (see above).
For more details on your taxation obligations as a Sole Proprietor contact the Georgia Department of Revenue or consult with a professional accountant.
How to form a partnership in Georgia
A partnership is the simplest business structure that accommodates two or more business owners.
There are two different categories of partnerships:
This is the default structure of a partnership. General partners have a direct input into the day-to-day decisions that affect the business.
The liability of the business is shared amongst all general partners (think of general partners as a collection of Sole Proprietors).
Limited partners have limited personal liability, in most states. The consequence of this is that these partners have little input into business operations and decision.
In the state of Georgia, however, limited partners are allowed input into business operations and decisions.
The level of active participation of all limited partnership members is something that should be specified in the partnership agreement.
A limited partnership is comprised of both general and limited partners.
Create a partnership agreement
This is not a mandatory requirement but it is highly recommended.
A partnership agreement ensures all members are aligned with the goals and structure of the business.
Before drafting your partnership agreement, organise a meeting with all members so that everyone is aware of and agrees to all the terms.
Some suggested items to include in your partnership agreement are:
Jurisdiction level of each member
Distribution of profits
New partners admittance procedures
Emergency procedures (bankruptcy withdrawal, etc)
A template you can use to draft your partnership agreement can be accessed here.
How to form an LLC in Georgia
If you want the peace of mind of knowing your personal assets will always be separate from any business liability you could choose an LLC business structure.
An LLC business structure is also the simplest structure that will permit you to officially issue stock to investors. This makes securing funding a much simpler process.
Choose a registered agent
A registered agent is a middle entity between a business and its mail communications. Think of a registered agent as the “mailbox” of your business.
The purpose of a registered agent is to guarantee that your business receives all important communications (especially those relating to any lawsuits).
You can either choose a friend to act as your registered agent, or contract a professional organisation.
A registered agent needs to meet the following criteria”
Have a registered office in Georgia. This can include residential locations but cannot be a PO BOX
Always be available during business hours
Accept service of processes (accept the obligatory duties associated with the title such as ensuring all mail is collected and promptly handed over to the business owners).
Should you be your own registered agent?
You could act as your own registered agent, but it's not recommended.
As a registered agent you need to always be available during business hours. This isn't something you can guarantee since, as a business owner, you're likely to be summoned to business trips or client meetings with little to no notice.
Another reason why you shouldn't act as your own registered agent is because they're required in every state you do business. If you appoint yourself as your own registered agent, you'll need to open brick and mortar stores in every state you do business.
Professional registered agent services
If you can't find a reliable friend or family member to act as your registered agent, you could employ a professional registered agent service to act on your behalf.
Here are some options:
You'll need to have your registered agent nominated before submitting your Articles of Association.
Submit Articles of Association
To form an LLC in Georgia, you'll need to submit:
If you're filing by mail, you'll need to include two copies of your Articles of Association (one original and one copy), the transmittal form as well as your filing fee payment ($100).
You can also submit your Articles of Association online here.
Prepare an operating agreement
This is similar to a partnership agreement. An operating agreement isn't required, but we highly recommend it.
You can design your own operating agreement, or use a template.
Tax details for LLCs in Georgia
You'll need a Federal Tax ID number (your EIN) as well as a State Taxpayer Identification Number (STIN).
Your STIN is your unique tax identity at a state level. You only use this identifier to file your state taxes.
You can apply for a STIN here.
How to form a corporation in Georgia
A corporation will give your personal assets the highest degree of protection against business lawsuits.
Corporations are also the only business structures that are recognised globally
There are two different types of corporation structures:
This is the only structure that will permit your business to file an IPO and list stock in the market. This is also the most complex business structure so there is a lot of added administrative work involved.
On the business structure complexity spectrum, an S-Corporation sits between an LLC and a C-corporation.
An S-Corporation structure allows business owners to enjoy the benefit of increased personal liability protection alongside decreased taxation losses.
S-corporations avoid the double-taxation process of C-corporations. S-corporation members are only taxed at the personal level, and not the corporate level. This characteristic is known as a pass-through entity.
There's also less administrative work involved in running an S-Corporation compared to the more complex C-Corporation.
When you form a corporation, it's designated a C-corporation by default. If you want to structure your business as an S-corp you'll need to fill out this IRS form.
Appoint a registered agent
The process of appointing a registered agent is the same as the LLC process.
Choose a corporation name
The name of corporations in Georgia need to include any of the following:
Make sure you search the Georgia Corporation Division database to make sure your business name is available.
Your corporation must have at least one director and your directors must be at least 18 years old.
Once your directors are nominated, you need to include their details in an “Incorporator’s Statement” of the Articles of Incorporation.
Submit Articles of Incorporation
The submission of this document formalizes the establishment of your corporation.
You can do this online or via mail.
The filing procedure for the Articles of Incorporation can be found here.
Don't forget to also include the Transmittal Information form in your mail packet, alongside the $100 filing fee.
Establish a corporate records book
This is a formal means of aggregating all of your important documentation such as stock certificates, business processes, shareholder meeting minutes etc. You can either create this record book yourself have a professional create one for you.
If you have multiple offices, you should keep your corporate records book in your primary office.
Create corporate bylaws
The corporate bylaws are the official ordinances of the businesses. These laws are equivalent to the operating agreements of LLC and partnerships, except much more formalized.
Like operating agreements, bylaws are not a state requirement but highly recommended in order to keep all members aligned with business goals.
You can take a look at some sample bylaws here.
Host initial corporate board meeting
This meeting is an opportunity for you to distribute stock, decide on bylaws, and complete all other formalities that require attention before commencing business procedures.
You need to host shareholder meetings annually in order to keep all shareholders informed about business progress. During these annual meetings new board members are elected to serve during the upcoming term.
File annual registration.
The state of Georgia requires corporations registered with the Office of the Secretary of State to file an annual registration. This is a mandatory process that must be completed every year by April1. Failure to do so will result in administrative dissolution.
The purpose of an annual registration is to provide the State with an up-to-date record of your business.
Some of the business records you must keep updated include your registered agent details and your business management structure.
Tax details for corporations in Georgia
C-corporporations undergo a double taxation, business profits are taxed at a corporate level and then again at a personal level after each member receives their dividends.
S-corporations, on the other hand are only taxed once at a personal level - a characteristic of a “pass through entity”.
As mentioned earlier, you can elect an S-corporation status and enjoy its taxation benefits, unless you plan to go public in the stock market, in which case you should remain as a C-corporation.
For more comprehensive details on the taxation obligations of corporations, refer to the Georgia Department of Revenue.
Forming a nonprofit in Georgia
A nonprofit structure is a great structure to choose if your business solution is focused on helping the needy.
The process of forming a nonprofit is similar to the processes for LLCs and Corporations., with some exceptions:
Submitting Articles of Corporation
Nonprofits must include certain provisions alongside their articles of association. These provisions outline the purpose of the organization as well as the dissolution process.
An example of a charter provision can be found here.
An example of a declaration of trust provision can be found here.
The filing procedure of the Articles of Corporation can be found here.
You can file this document by mail or online.
Filing for a tax exemption
Georgia currently only provides nonprofits state income tax exemption and not sales tax exemption.
You need to apply for a tax exemption via the IRS. Form 1023 is the standard tax exemption form that most nonprofits should file.
Smaller nonprofits may be eligible to fill out the form 1023-EZ.
Register your charity with the state
Nonprofits must register their charity with the state of Georgia prior to commencing any fundraising activities. Some nonprofits are exempt from this registration process.
Registrations are renewed every two years.
To register your charity with the state of Georgia click here.
Protecting your business in Georgia
Regardless of your business structure, It is essential for you to insure your business, in providing your business with the highest level of protection from all possible angles of attack.
Below is a list of some recommended insurance policies.
General Liability insurance in Georgia
This policy will protect your business against any injuries or property damage you or your employees may cause others.
This policy will also protect your business from any copyright infringement claims associated with your advertising.
Georgia’s workers compensation insurance
This will ensure your employees get compensated in a timely manner in the event of any work related injuries.
Georgia’s employment practices liability insurance
This will protect you against any lawsuits relating to unfair dismissal, workplace discrimination and workplace harrasments.
Georgia’s data breach insurance
This will protect you in the event of a data security breach and cover the cost of any repercussions.
This website contains taxation details for businesses in Georgia
This is the website for Ohio’s Secretary of State Frank Larose. You can file business documents and also search the database of registered businesses on this website.
Online gateway for submitin LLC and Corporation documentation.
For state tax registrations
This is a great resource for small business news, tips and advice, market research and industry-specific links.
The US Small Business Administration offers advice, advocacy and instruction for small businesses across the country.
Our own guide to launching your startup will walk you through every step of starting a business, from concept to execution.