Limited liability company (LLC) formation cost and general requirements vary from state to state. So, what are Georgia LLC’s cost and general requirements? This article will walk you through all the expenses you should expect when forming a Georgia LLC. But before we learn what an LLC in Georgia costs and various requirements to form an LLC in Georgia, let’s briefly define an LLC.
An LLC is a business entity or structure created by state law. LLCs are mainly formed to offer liability protection, where the owners of the company are not personally liable for the company debts and other liabilities. This business entity has become very popular in several states particularly among small businesses because it is easy to form and very flexible.
Filing Requirements & Overall Georgia LLC Costs
Forming an LLC and keeping it in good standing in Georgia involves some fees. These fees will vary depending on your business requirements. For that reason, we have summarized Georgia limited liability company costs under each common requirement.
Georgia LLC Filing Fee
To form an LLC in Georgia, you will have to file a certificate of formation with the Georgia secretary of state. A $100 filing fee is paid to the secretary of the state of Georgia in the process. The certificate of formation form is filled and submitted online.
Georgia LLC Annual Report
Annual registration is filed with the secretary of the state as well at only a $50 filing fee. You can file your annual registration online at http://www.sos.ga.gov/Corporations/. The filing is done between Jan 1 and April 1 except for the initial registration which is filed within 90 days of your LLC formation.
Registered Agent Fee
Georgia requires that you nominate a registered agent for your LLC. A registered agent is a business entity or an individual responsible for receiving important documents, lawsuits, and forms on your behalf. It is advisable to nominate a professional registered agent, but you are free to nominate someone within your company, including yourself, to cut expenses. However, the cost of hiring a registered agent service ranges between $50 to $300 per year.
Application for Withdrawal (Foreign LLC)
You will need to file a certificate of termination to apply for LLC withdrawal. There are no fees required for filing a certificate of termination but your entity must be current in its registration and inactive status.
Prepare a “Certificate of Termination” in the recommended format and mail it to the Corporations Division, 2 Martin Luther King Jr. Dr. SE, Suite 313 West Tower, Atlanta, GA 30334.
Depending on the type of business you are forming, Georgia requires that certain businesses have licenses and permits. For example, restaurants will require building permits, health permits, etc.
The fees for Georgia permits will vary depending on the type of business but expect something less than $100.
LLCs are considered a pass-through entity for tax purposes and they don’t file a separate corporate tax return. For that reason, each company member will pay individual income tax. However, you will also pay self-employment tax towards social security/ medicare or sales tax if your company sells merchandise.
The current Georgia self-employment tax rate is 15.3%, while sales tax rate is 4%. If you decide to have your LLC taxed as a corporation in Georgia, you will pay an income corporate tax at the rate of 15% only if you make profit.
Other LLC Filing Costs
There are several other services you may require as your business grows. Even though some of these services are optional in Georgia, they are very important and worth fees.
LLC Name Reservation Fee
Name reservation is not mandatory but important. The Georgia secretary of state will give you 30 days to hold on to your name during which no one else can use the name. You can file the name reservation form online or download it and send it through email or simply visit the secretary of state’s office and do it in person. Whichever the case, you will have to submit the form along with a $25 filing fee.
“Doing Business As” (DBA) Name
Domain name registration is key to your company’s scalability. If you want to operate your business with a different name from your legal business name, you will have to file for a DBA.
In Georgia, DBA registration charges will include publication fees as well, since Georgia is among the few states that require publication. The filing is done with the office of the Clerk of Superior Court, along with $162 filing fee plus $40 publication fee.
Business Domain Name & Website
To properly brand your business, you will have to acquire a domain name so that nobody else can use your business name. Even though creating a website for your business is optional, failure to create one will make you miss out on potential customers since it puts you on the online market.
A domain name registration can cost you anywhere between $2 to $20 depending on special offers or discounts offered. However, newer domain name extensions such as apps. may go beyond this range.
Articles of Organization Fee
You will have to file articles of organization with the Secretary of State of Georgia to form an LLC. You can file with the secretary of state on your own, or seek the help of a professional formation service or an attorney. Whichever the case, you will have to pay a Georgia state filing fee of $100.
Setting up an LLC is very crucial and it is prudent to seek the help of an attorney. Attorneys are not cheap but will provide essential legal advice, filing assistance, and peace of mind.. Attorney charges vary, but you should expect something between $500 – $2,000 flat fee or $150 – $350 hourly fees mostly depending on the experience of the one you go for.
Tax ID Number (EIN)
Sometimes referred to as Federal Employer Identification Number (FEIN), EIN is essentially a social security number for an organization. You will have to get an EIN to help you open an account, file and manage federal state taxes, and hire employees in Georgia.You can get an EIN for free from the IRS by applying online or via email.
Top 2 Georgia LLC Services
ZenBusiness offers exceptional LLC formation services at great pricing. Their charges for LLC services are overall the cheapest yet will offer you the best LLC formation and maintenance features. They include a year of registered agent service for free in all their packages plus a customized operating agreement.
In addition to their pricing and a long list of features, their great customer support and easy-to-use interface are some of the other reasons they have the best customer feedback.
Incfile has the cheapest basic LLC formation package in the market. The lowest formation package will leave you with only state filing fees to worry about and still offer registered agent service for a 1 year free to new subscribers even in their free package. Besides, they boast a tone of experience with more than 500,000 having relied on them for business formation.
How to Start an LLC in Georgia
Step 1: Name Your Georgia LLC
You should conduct a name search to ensure the name you pick is still available and has not been claimed by anyone else. Similar names or names that are close are always rejected during business formation.
Step 2: Choose Your Registered Agent
You will need a registered agent to receive vital legal documents on your behalf. Georgia requires that an LLC have a registered agent and this can be yourself, a member of a company, a third party individual, or a business entity.
Step 3: File Articles of Organization
You can not start and operate a limited liability company in Georgia without filing articles of organization with the Georgia secretary of state at the state level or county clerk at the county level.
Step 4: Prepare an Operating Agreement
An operating agreement is not a mandatory requirement but it is very important as it lists down how your business is managed and the members of your company. In essence, an operating agreement for your LLC is equivalent to the board of directors in a corporation.
Step 5: Obtain an EIN
An EIN is like your company’s social security and it is very important since it will help you open a business bank account, file and manage federal taxes and hire employees in Georgia.
Step 6: File Annual Reports
Annual reports provide updates on essential company information including contact, name, and address to be registered.
While Georgia is not the cheapest state to form an LLC, it is not expensive either. The state filing fees are average and are tax-friendly at the same time. Other LLC requirements are not charged expensively either. With that said, for a Georgia business, setting up an LLC will not cost you a lot of money.
Frequently Asked Questions
Yes, you will have to pay annual fees to keep your LLC in compliance with the state. However, some states may require that you pay it after 2 years and it is required regardless of your LLC income and activity.
The cost to form a business in Georgia will depend on your business requirements. Generally, you only need to pay their affordable state filing fees but your additional requirements will hike the fees.
This will depend on the formation service you have used since some services have expedited processing speed. But normally, filing articles of organization with the Georgia secretary of state takes 5 to 7 business days online and up to two weeks via email.
If Georgia is the state where you or your business will have a physical appearance, you will need to start an LLC there. While states like Nevada or Wyoming are cheaper to form an LLC, registering a foreign LLC comes with some drawbacks.
+ 2 sources
- Ga.gov. (2021). Georgia Secretary of State. [online] Available at: https://sos.ga.gov/index.php/corporations [Accessed 13 Aug. 2021].
- Ga.gov. (2021). How To Terminate A Llc | Corporations. [online] Available at: https://sos.ga.gov/index.php/corporations/how_to_terminate_a_llc [Accessed 13 Aug. 2021].