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eorgia is known for its business-friendly environment. The state boasts a growing economy, low corporate taxes, and a range of resources available for entrepreneurs. This guide will cover everything you need to know about how to start a business in Georgia.
Before heading down to your local business office, take some time to lay the groundwork by doing the following:
- Identify your business idea: Start by thinking about what you’re passionate about, what skills you have, and what market needs you can address.
- Conduct market research to assess business feasibility: Explore your target market, identify potential customers, and analyze competitors.
- Create your business plan: In your business plan, you’ll outline your business's mission, vision, target market, competitive analysis, marketing strategy, operational plan, and financial projections.
- Determine how you’ll get funding: Think about your financial needs and devise a strategy to secure funding for your business. Consider various sources such as personal savings, loans, grants, investors, and crowdfunding.
Decide on a business structure
Your business structure affects issues such as how you’ll be taxed, how your business is governed, and what guidelines you must follow.
Types of business entities in Georgia
In Georgia, you have several options for selecting a business structure. The common types include:
- Sole proprietorship: A sole prop is the simplest form and is ideal for individuals running a business alone, but you’re personally liable for debts and obligations.
- Partnership: Partners share the profits and losses, and they are personally liable for the business's debts.
- Limited liability company (LLC): An LLC combines the limited liability protection of a corporation with the tax benefits and flexibility of a partnership, so it’s a popular option.
- Corporation: This offers limited liability protection, but both corporate profits and shareholder dividends are taxed.
- S Corporation: This avoids double taxation by allowing profits and losses to pass through to the owners' personal income without being subject to corporate tax.
Choosing the best structure for your business
Choosing the right business entity can have long-lasting effects on your business. Some factors to consider when you’re deciding:
- The amount of financial risk you’re willing to take
- Tax implications
- The management and ownership structure you prefer
- How your structure will affect funding
- Regulatory and compliance issues
- Long-term goals
Pick the perfect business name
Choosing a business name is a monumental decision. Here are some steps to facilitate the naming process:
- Brainstorm ideas around your target audience, the products or services you offer, or the image you want to project.
- Use the Georgia Secretary of State’s business name search tool to check if your desired name is available.
- Georgia has specific naming requirements for different types of business entities. For example, if you're forming an LLC, the name must include "Limited Liability Company," "LLC," or "L.L.C." Corporations must include “Corporation,” “Incorporated,” “Company,” or an abbreviation of one of these words.
Choose a registered agent
In Georgia, when you form a limited liability company (LLC) or a corporation, you must designate a registered agent for your business. A registered agent acts as the official point of contact between the state and your business and receives important legal documents and government notices on behalf of your business.
Your registered agent must be either an individual who resides in the state or a business entity that is authorized to operate in Georgia, must have a physical address, and must be available during regular business hours to receive documents.
Register your business in Georgia
Here are the general steps for registering your business in Georgia:
- File formation documents: Depending on the business structure you choose, you will need to file certain documents with the Georgia Secretary of State. For an LLC, file the Articles of Organization. For a corporation, file the Articles of Incorporation.
- Obtain an Employer Identification Number (EIN): Apply for an EIN from the IRS website. This is necessary for tax reporting purposes, hiring employees, and opening a business bank account.
- File an annual report: If you have formed an LLC or corporation, you must file an annual report with the Georgia Secretary of State to update basic information, such as the registered agent and business address.
Register a DBA
Registering a DBA ("doing business as") allows you to operate your business under a name different from its legal name.
- Choose a unique DBA name that complies with Georgia’s naming rules.
- In Georgia, DBAs are registered at the county level, not with the state. Register your DBA in the county clerk’s office where your business is located.
- In some counties in Georgia, you have to publish a notice in the local newspaper announcing your intention to use a trade name.
- Once you have completed the form and fulfilled the publication requirement, submit it to the county clerk’s office along with the registration fee.
Understand Georgia's tax obligations
Businesses in Georgia are subject to several types of taxes:
State business taxes
Corporations in Georgia are subject to a corporate income tax on their net income. LLCs, partnerships, and S corporations are generally considered pass-through entities, meaning that the business itself does not pay income taxes. The profits and losses are passed through to the owners, who report them on their personal income tax returns.
Sales and use tax
If your business sells tangible goods in Georgia, you’ll collect sales tax from customers and pay it to the state. Use tax is similar to sales tax but applies to goods purchased outside Georgia for use within the state. If you purchase items for your business from an out-of-state vendor that doesn’t charge Georgia sales tax, you are generally required to pay use tax on those items.
Registration and reporting
To collect sales tax, you must register with the Georgia Department of Revenue and obtain a sales tax permit. You’re also required to file regular sales tax returns, typically on a monthly or quarterly basis, and submit the taxes you’ve collected.
If you have employees, you must register with the Georgia Department of Revenue for withholding tax and file regular withholding tax returns on their wages. Employers in Georgia are also required to pay quarterly unemployment insurance taxes by registering with the Georgia Department of Labor.
In addition to state employment taxes, you must also withhold federal income tax and pay federal employment taxes, including Social Security and Medicare taxes.
Get the business licenses and permits you need in Georgia
The licenses and permits you’ll need to run a business in Georgia will depend on the type of business you own. For instance, if you’re opening a restaurant, you’ll need health permits and a liquor license if you plan to serve alcohol.
In addition to state requirements, you may also need licenses and permits from the city or county where your business is located. Common local requirements include a general business license, a building permit, and a sign permit.
Certain professions and industries require specialized licenses. For example, contractors, electricians, and certain healthcare professionals need to be licensed.
You can research which licenses and permits are required by using resources such as the U.S. Small Business Administration’s (SBA) website or the Georgia Secretary of State’s website. Additionally, contacting your local chamber of commerce or consulting with a business attorney can be helpful.
Set up your business finances in Georgia
Setting up your business finances is a critical step in establishing and operating your business in Georgia. Here are the steps:
Open a business bank account
Although it can be tempting to use your personal bank account when you’re getting started — particularly if your business is a sole proprietorship — that’s never a good idea. A business checkingbanking account withsuch as Novo will set you up for success by helping you keep your finances organized. With a Novo account, you’ll have easy access to the information needed to apply for funding and stay compliant with tax obligations. (Best of all, there are no monthly fees or minimum balances required!)
Funding your business
Funding your business can be a challenge, but here are some common methods:
- Personal savings
- Traditional bank loans or lines of credit
- Small Business Administration (SBA) loans
- Investors or partners
- Crowdfunding platforms
- Grants or contests
- Personal loans or investments from friends or family
There are other considerations to ensure that your business operates smoothly and complies with state laws.
Hiring employees in Georgia
Take the following steps to ensure that you’re legally hiring employees:
- Verify that each new hire is legally allowed to work in the United States through the U.S. Citizenship and Immigration Services' E-Verify system.
- Register your business with the Georgia Department of Labor for unemployment insurance tax purposes and to report employee wages.
- Comply with both federal and state wage and hour laws, including the minimum wage and overtime requirements.
- Ensure that your hiring practices comply with federal and state anti-discrimination laws.
- Understand the laws regarding leave policies, such as family medical leave, sick leave, and vacation policies.
- Comply with Occupational Safety and Health Administration (OSHA) regulations relevant to your industry.
Getting your business insured in Georgia
Depending on your type of business, you may need one or more of the following types of insurance:
- General liability insurance to protect your business from financial losses resulting from third-party claims due to bodily injury or property damage.
- Property insurance to protect against losses due to fire, theft, and other covered causes.
- Professional liability insurance that protects against claims of negligence or failing to perform your professional duties.
- Product liability insurance to cover liability for damages caused by one of your products.
- Business interruption insurance to compensate for lost income and operating expenses if your business is unable to operate due to a covered cause, such as a natural disaster.
- Commercial auto insurance for business vehicles to cover liability and property damage in the event of an accident.
Starting and running a business in Georgia can seem complicated and overwhelming. However, there are a number of resources available, such as the Small Business Administration in Georgia, that can help you. Although it requires careful planning and documentation, starting your business off right will put you on the path to sustainable growth and development.
Novo Platform Inc. strives to provide accurate information but cannot guarantee that this content is correct, complete, or up-to-date. This page is for informational purposes only and is not financial or legal advice nor an endorsement of any third-party products or services. All products and services are presented without warranty. Novo Platform Inc. does not provide any financial or legal advice, and you should consult your own financial, legal, or tax advisors.
Novo is a fintech, not a bank. Banking services provided by Middlesex Federal Savings, F.A.: Member FDIC.
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