Learn the five basic steps to starting a single-member LLC in Georgia.
If you’re thinking of starting a business on your own in Georgia, then the Georgia single-member LLC (SMLLC) might have caught your eye. But what is an SMLLC? And how do you create one? In this guide, we’ll cover all the essentials to starting a single-member LLC in Georgia.
A single-member Georgia limited liability company, or Georgia SMLLC, is an LLC with just one member. “Member” is another term for “owner” of an LLC. In that sense, an SMLLC is similar to a Georgia sole proprietorship — another business entity type with a single owner. But there’s a very crucial difference between these two: a single-member LLC has personal liability protection; a sole proprietorship does not.
To operate as a sole proprietorship, you can simply start doing business right away. But in the eyes of the law, your business will be indistinguishable from you as a person. If your business defaults on a loan or gets sued, Georgia courts can confiscate your personal assets to settle your balance.
In contrast, when you create a single-member LLC, you actually create a business that is a distinct legal entity from you as a person. In most cases, only the business assets of the LLC can be taken if the business gets into trouble; your home, bank account, and car are typically safe. This personal asset protection is one of the primary reasons many entrepreneurs decide it’s time to start an LLC.
Starting a single-member LLC is an important legal process. But follow these 5 steps, and you’ll be well on your way to owning your own Georgia LLC.
One quick note before we dive in: Georgia doesn’t have a professional LLC option. If you’re hoping to start a business as a licensed professional (such as law, accountancy, or medicine), then a Georgia’s professional corporation might be the best business type for your needs.
Choose a name for your SMLLC in Georgia. One of your first tasks is to decide what your customers will call you. Ideally, you’ll pick a name that’s memorable and descriptive. But your name should also comply with state laws. Georgia requires your business name to:
Ideally, your name will also match an available domain name so you can establish an online presence. If you’ve found a name that you like, we can help you reserve your Georgia business name. Reserving a name protects it for 30 days.
Decide which address will be your registered office and who will serve as your registered agent. A lot of states require just a registered office or a registered agent, but Georgia law technically says you need to list both a registered office and a registered agent. That said, Georgia law says that the registered office needs to have the same address as the registered agent that you pick — so practically speaking, you’re appointing a single agent whose physical address allows you to fill both roles.
Your registered agent will accept service of process and some other official communications on your behalf and forward them to you. An agent must be present at the listed registered address during all normal business hours.
Need someone to entrust with this role? Our Georgia registered agent services have you covered.
Fill out and submit your Articles of Organization. Once you have your registered agent and business name picked out, it’s time to file your formation documents. Georgia calls this form the Articles of Organization. Unlike a lot of states that provide a fillable form for this step, Georgia requires you to draft your own. By law, you must include the following info:
You can also include any additional provisions that you want to add, as long as they’re permitted by state laws. For example, you might describe your business activities, provide a delayed effective date for your filing, describe how the LLC will be managed, or list a unique fiscal year structure. If you’re feeling overwhelmed at the idea of creating this document on your own, our free Georgia SMLLC formation service can make this process as easy as it gets.
When you file, you’ll also need to pay Georgia’s current filing fee: $100. Georgia recommends using online filing to avoid a $10 filing fee surcharge.
Create an operating agreement to govern your Georgia SMLLC. An operating agreement is somewhat like a constitution or charter for an LLC; it’s an internal legal document that details exactly how your business will operate. Typically, an operating agreement describes the responsibilities and capital contributions of each member, how business profits will be distributed, how membership can change, and so on. They’re absolutely essential for multi-member LLCs.
Georgia doesn’t explicitly require you to draft an operating agreement; if you don’t, your SMLLC will be governed by the state’s LLC code by default. Even as a solo business owner, it’s a good idea to create an agreement that’s customized to your business. Plus, you never know how your business will grow in the future. If you’re not sure how to start your own agreement, our customizable operating agreement template can help guide you through the process.
Apply for an employer identification number (EIN) for your SMLLC. An EIN acts like a Social Security number for a business; it’s a nine-digit code the IRS uses to identify a business for federal tax purposes. LLCs are required to get one if they have multiple members, have employees, owe excise taxes, or have any other federal tax liabilities. Most banks even ask to see your EIN before they’ll issue a business bank account.
As a single-member LLC, you might not have to get an EIN right away. But it’s easy and free to obtain one from the IRS.
By default, a single-member LLC is subject to pass-through taxation for federal income tax purposes (it’s a “disregarded entity” to the IRS). With this structure, the LLC itself doesn’t pay taxes or file a tax return; the SMLLC’s owner only reports the business’s taxable income on their personal tax return. That said, some SMLLCs may opt to be taxed as a C corporation or S corporation instead. A C corporation’s income is taxed twice — once when the business files its taxes at the corporate income tax rate and a second time when the owner reports the personal income they receive from the business’s distributions.
In Georgia, this repeats on the state level; Georgia honors whatever your federal tax identification is. If you pay pass-through income taxes at the federal level, you’ll pay Georgia’s personal income tax rate. If you’re taxed as a corporation, your LLC will pay Georgia’s corporate income and net worth tax and then you’ll personally pay income tax on your distributions. That said, taxes and fees like sales taxes may apply to your business no matter your taxation structure.
Taxes are really complicated, so we recommend enlisting the help of a licensed professional like a business attorney or CPA.
Still wondering why you should start a single-member LLC in Georgia? Forming an LLC is an extensive process, but there are quite a few benefits to a Georgia SMLLC.
An LLC only has a few “corporate formalities” to adhere to in order to stay compliant. Typically, an SMLLC must pay its taxes, file its annual registration, and maintain any business licenses. That may sound like a lot, but compared to corporations, it’s very simple.
An SMLLC is a separate legal entity from its owner. As a result, the sole member of the LLC usually can’t be held liable for business debts and lawsuits. That’s a significant benefit compared to a sole proprietorship.
Many SMLLC owners opt to maintain their default tax status as a pass-through entity, especially when they first start out. But later on, options like filing to be taxed as an S corporation to reduce the burden of self-employment taxes might be appealing. Some businesses might even opt to file as a C corporation to take advantage of the wider range of tax deductions. The luxury of an LLC is that you can choose which option works best for your business.
Learn more about C corporations and S corporations.
As the sole owner of your LLC, you get to call the shots for all the business decisions. You won’t have to pitch an idea to a board of directors, get shareholder approval, or convince another member it’s worth it. If you have a goal, you can pursue it as soon as you’d like.
If you operate as a sole proprietor, your brand is technically your legal name (and maybe a DBA name, if you get one). But as an LLC, you establish yourself as an entity that’s registered and legally accountable to the state. Some customers feel more comfortable working with a registered business.
Starting a Georgia single-member LLC doesn’t mean that you have to do everything by yourself. Our $0 Georgia LLC formation service can take all the hassle out of starting your LLC. We’ve also got you covered with EIN registration, worry-free compliance, annual registration help, and everything in between. We’ll take care of the paperwork so you can focus on what really matters: your business.
Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
Georgia state law explicitly requires every LLC to have at least one member. But there isn’t a requirement to have more members than that. So single-member LLCs are completely legitimate in Georgia.
Georgia doesn’t require an LLC to draft its own operating agreement. If an LLC decides not to create one, the business is governed by the state’s limited liability company statutes by default. That said, we generally recommend that even single-member LLCs create their own agreement to have a document that best fits their business’s unique needs.
That depends on how and when you file your Articles of Organization. Typically, if you file online, Georgia will take 7 to 10 business days to approve your LLC. Mailed paper filings usually take up to 15 business days (upon receipt). However, between December and January or at the end of the business quarter, processing times typically increase.
Georgia honors an LLC’s federal tax status. If you’re taxed as a corporation at the federal level, you’ll be taxed like a corporation in Georgia, too. Likewise LLCs with pass-through taxation at the federal level will pay personal income taxes at the state level.
If your LLC is required to collect and pay sales taxes, you’ll need to handle those, too (regardless of your income tax structure). Since taxes are complicated, we recommend enlisting the help of a tax attorney.
The Georgia Department of Revenue requires every LLC to register through the Georgia Tax Center. During the registration process, you’ll need to provide information about your business, your federal tax number (if you have one), your email address, and other information about yourself as the LLC’s sole member.
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