How to Start an S-Corp in Georgia


Steve Goldstein
Steve Goldstein
Business Formation Expert
Steve Goldstein runs LLCBuddy, helping entrepreneurs set up their LLCs easily. He offers clear guides, articles, and FAQs to simplify the process. His team keeps everything accurate and current, focusing on state rules, registered agents, and compliance. Steve’s passion for helping businesses grow makes LLCBuddy a go-to resource for starting and managing an LLC.

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Start an S-corporation in Georgia

Georgia, popularly known as The Peach State, offers a bunch of benefits for business owners, especially the state capital Atlanta has a lot to offer to the rising entrepreneurs in the state. If you want to start a business in Georgia, you must choose an appropriate corporate structure. You can have a corporation or a sole proprietorship or set up an LLC in Georgia. There are a few guidelines that you should be aware of when it comes to starting an S-Corporation. In Georgia, S-Corporation is businesses’ most common corporate structure, especially start-ups. It was developed in order to give companies limited liability protection while preserving the advantages of being a distinct legal organization.

In this article, you will learn about how to start an s-corporation in Georgia. You will also learn whether an s-corporate business structure suits your business. Please read all the points carefully before starting your business in Georgia.

What is an S-Corp in Georgia?

An S corporation (S-corp) is not a type of corporate entity, unlike a limited liability company (LLC) or other business structures. It’s a tax classification that might result in significant financial savings for both corporations and LLCs but in different ways. S-corp is similar to LLC, except that the IRS treats it as a corporation for tax purposes.

If you want an S corp status for your business, you can always form an LLC to protect your personal assets from business debts. It takes some basic steps to have a successful s-corporation in Georgia. S-Corps do pay corporate income taxes, but they are still treated as disregarded companies for federal tax purposes.

S-corps pay corporate taxes that LLCs do not have to pay. If you want to have an S-corp status, then we would recommend you have an LLC instead. This will protect your personal assets from your business liabilities and you don’t have to pay any corporate taxes.

LLCBuddy Editorial Team

Limitation and Requirements of S-Corp in Georgia

As you have decided to have an S-Corp structure for your business, you must know the limitations and requirements to qualify for S-Corp status. We have listed some important points to consider following for your reference-

  • Be a domestic corporation.
  • Not be an ineligible corporation, such as specific financial institutions, insurance providers, or domestic corporations engaged in overseas sales.
  • Have just one type of stock.
  • Have a maximum of 100 shareholders or members.
  • Have only permitted individuals, certain trusts, and estates as stockholders or members.

If you are qualified for the limitations and requirements, you can apply for an S-Corp in Georgia.

How to Start an S-Corporation in Georgia?

To create S-Corp in Georgia, you must follow the below guidelines that include forming a business name, hiring a Registered Agent, filing your Articles of Organization, creating an operating agreement in Georgia, requesting an EIN, filing a form 2553.

Step 1: Register a Business Name in Georgia

After you have decided on the idea to start an S-Corp in Georgia, deciding the name for your corporation is significant. Legal procedures should be taken into account when choosing your partnership name. Choose a business name that will enable you to develop a strong brand identity.

If you want to set up an LLC, there is a complete guide on Georgia LLC name guidelines for a proper LLC name. Here are some guidelines you must follow while naming your S-corp.

  • Avoid profanities
  • The name should be available, and no other entity should have the same name in Georgia.
  • Limit of restricted words that need a license in Georgia, for example, doctors, attorneys, etc.
  • Do not use a business name that sounds like a government agency or entity (like “police,” “county,” and “state”)

Step 2: Hiring the Georgia Registered Agent

The next step in starting an S-corp in Georgia is hiring a Georgia Registered Agent, a person that accepts legal paperwork on behalf of your business. This person or business will receive important tax forms, legal documents (such as subpoenas), all notices of lawsuits, and other official government correspondence in Georgia. Forming an LLC and an S-corp will be easier if you have Registered Agent in Georgia.

Step 3: File Your Georgia Articles of Organization

The Articles of Organization is an important document to start your limited liability company (LLC). Georgia Articles of Organization is a simple document that contains the business name and address as well as the name and address of the person who received lawsuits on behalf of the organization. In order for the “Articles of Organization” to be filed, you need to pay a filing fee to the state. In Georgia, the filing fee is $110 (by mail and $100 online).

In California, along with the Articles of Organization, you must send the Statement of Information to file your company. The statement of information is a mandatory document in California, but other states do not have this document.

Step 4: Creating an Operating Agreement in Georgia

After you have filed your Articles of Organization in Georgia, the next step is to create an LLC operating agreement in Georgia. The Georgia LLC operating agreement is essential and necessary since it will cover your corporation’s important documentation and rules. The operating agreements usually include the following-

  • Article I: Organization
  • Article II: Management and Voting
  • Article III: Capital Contributions
  • Article IV: Distributions
  • Article V: Membership Changes
  • Article VI: Dissolution

After creating the LLC operating agreement, you can benefit in several ways since it will discuss how decisions for the business will be made, including management and member voting structure. For more details about how an operating agreement works, please check Operating Agreement.

Step 5: Request for EIN in Georgia

After documenting the operating agreement, you should get or request an Employer Identification Number (EIN). An EIN will serve as the tax ID for your general partnership. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Georgia can be through the following:

  • Apply Online- You can apply for EIN online, the most desirable and fastest method for users.
  • Apply by Fax- Another method of obtaining EIN is to fax Form SS-4 (PDF) after entering all the correct information to (855) 641-6935.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is 4 weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

If you would like to be assisted in getting an EIN in the Internal Revenue Service, we can get your EIN for you. Our EIN service is quick and hassle-free. For more details about EIN for your business, check why you need EIN.

Step 6: File Form 2553 for Your S-Corp Business in Georgia

Once you have obtained your EIN and Articles of Organization to form an S-Corp, you must file Form 2553, Election by a Small Business Corporation, to apply for S-corp status. Filing a form 2553 should be done 75 days after the formation of your S-Corp, or not more than 75 days after the beginning of the tax year in which the election is to take effect.

If your LLS-Corp has passed the deadline of 75 days, you must also file Form 8832, Entity Classification Election, in order to opt to be taxed as a corporation. Then you would send Form 2553 and Form 8832 jointly by certified mail from the USPS. In Georgia, you can send your form 2553 to the Department of the Treasury Internal Revenue Service Center – Kansas City, MO 64999 Fax: 855-887-7734.

Advantages of Starting an S-Corporation in Georgia

Filing an S-Corp in Georgia has numerous benefits and advantages.

  • Writing Off Losses: With S-corp, owners can deduct business losses from their individual income statements. If the company loses money in the first few years, it may balance its other sources of revenue. Even so, understand the shareholder loss limitations set by the IRS.
  • Pass-Through Taxation: Starting an S-Corp is the widely known advantage in forming this kind of business structure since an s-corp uses a pass-through taxation structure. The company does not pay twice the tax in this kind of taxation. Because of this structure, most start-ups and entrepreneurs in Georgia apply for an S-Corp LLC.
  • Qualified Business Income Deduction: A qualified business income, or QBI, is the total of all qualified items of income, gain, deduction, and loss from any qualified trade or business, including S-Corp. With this, S corp owners may deduct up to 20% of their eligible earnings under the Tax Cuts and Jobs Act.

FAQs

What is an S-Corp in Georgia?
An S-Corp in Georgia is a business entity that has been formed through the filing of Articles of Incorporation with the Georgia Secretary of State. It is a type of corporation that is treated as a “pass-through” entity for taxation purposes, meaning that profits and losses are not taxed at the corporate level but instead “pass-through” to the shareholders and reported on their individual tax returns.
How do I start an S-Corp in Georgia?
To start an S-Corp in Georgia, you must first file Articles of Incorporation with the Georgia Secretary of State. This document will include the name and address of your business, the purpose of the business, and the names of the initial directors and officers. After filing the Articles, you will need to create a corporate bylaws document and obtain a Georgia Tax ID number from the Department of Revenue.
What are the benefits of forming an S-Corp in Georgia?
Forming an S-Corp in Georgia offers many benefits, including limited liability protection for shareholders, the potential for tax savings, and ease of management. Additionally, S-Corps are considered to be more credible in the eyes of financing institutions, customers, and vendors.
What are the filing requirements for an S-Corp in Georgia?
In order to form an S-Corp in Georgia, you must file Articles of Incorporation with the Georgia Secretary of State. You will also need to create a corporate bylaws document and obtain a Georgia Tax ID number from the Department of Revenue.
What type of documents do I need to form an S-Corp in Georgia?
To form an S-Corp in Georgia, you will need to file Articles of Incorporation with the Georgia Secretary of State. Additionally, you will need to create a corporate bylaws document and obtain a Georgia Tax ID number from the Department of Revenue.
Are there any restrictions on who can form an S-Corp in Georgia?
No, there are no restrictions on who can form an S-Corp in Georgia.
What is the cost to form an S-Corp in Georgia?
The cost to form an S-Corp in Georgia is $100 for filing the Articles of Incorporation with the Georgia Secretary of State.
How long does it take to form an S-Corp in Georgia?
The process of forming an S-Corp in Georgia typically takes 2-3 weeks, depending on the speed of the Georgia Secretary of State.
How do I maintain an S-Corp in Georgia?
To maintain an S-Corp in Georgia, you must file an Annual Registration Form with the Georgia Secretary of State each year and pay the $50 filing fee. Additionally, you must hold at least one meeting of the shareholders and directors each year and keep accurate records of the corporation’s activities.
Are there any additional fees or taxes associated with an S-Corp in Georgia?
Yes, S-Corps in Georgia are subject to the annual Franchise Tax. Additionally, you may be required to pay additional fees or taxes depending on the type and amount of income your business generates.
What is the Georgia Franchise Tax?
The Georgia Franchise Tax is a tax imposed on certain business entities, including S-Corps, that are registered with the Georgia Secretary of State. The tax is based on the entity’s total net worth and the total amount of taxable income generated in a given year.
What other requirements do I need to meet to keep my S-Corp in Georgia in good standing?
To keep your S-Corp in good standing in Georgia, you must file an Annual Registration Form with the Georgia Secretary of State each year and pay the $50 filing fee. Additionally, you must hold at least one meeting of the shareholders and directors each year and keep accurate records of the corporation’s activities.
What if I forget to file the Annual Registration Form?
If you forget to file the Annual Registration Form, your S-Corp may be administratively dissolved by the Georgia Secretary of State. To avoid this, it is important to file the form each year and pay the $50 filing fee.
Can I operate an S-Corp in Georgia without a physical address in the state?
Yes, you can operate an S-Corp in Georgia without a physical address in the state. However, you must have a registered agent in Georgia who is responsible for receiving important documents and notices on behalf of the corporation.
How do I choose a registered agent in Georgia?
You can choose a registered agent in Georgia by researching different options and selecting one that meets your needs. Generally, you should look for an experienced, reliable company that is knowledgeable about Georgia laws and regulations and that has a physical address in the state.
What is the difference between a C-Corp and an S-Corp in Georgia?
The main difference between a C-Corp and an S-Corp in Georgia is the way they are taxed. C-Corps are subject to double taxation, meaning that the corporation itself is taxed on its profits, and then individual shareholders are also taxed on the dividends they receive from the business. On the other hand, S-Corps are treated as “pass-through” entities for taxation purposes, meaning that profits and losses are not taxed at the corporate level but instead “pass-through” to the shareholders and reported on their individual tax returns.
What are the accounting requirements for an S-Corp in Georgia?
All S-Corps in Georgia must maintain accurate financial records and prepare financial statements each year. Depending on the size of the corporation, you may be required to hire an accountant or use accounting software to manage your books.
Are there any specific laws or regulations I need to be aware of when operating an S-Corp in Georgia?
Yes, there are several laws and regulations that you must be aware of when operating an S-Corp in Georgia. These include state and federal labor laws, tax laws, regulations related to corporate governance, and any other laws that may be specific to the type of business you are running.
Do I need a business license to operate an S-Corp in Georgia?
Yes, you will need to obtain a business license to operate an S-Corp in Georgia. Depending on the type of business you are running, you may also need additional licenses or permits from the local government.
How do I dissolve an S-Corp in Georgia?
To dissolve an S-Corp in Georgia, you must file Articles of Dissolution with the Georgia Secretary of State. Additionally, you must pay any outstanding taxes and debts, notify creditors and employees, and distribute any remaining assets to the shareholders.
What are the requirements to form an S-Corp in Georgia?
To form an S-Corp in Georgia, you must file a Certificate of Incorporation with the Georgia Secretary of State, appoint a registered agent, and submit a separate application to the Internal Revenue Service.
How much does it cost to form an S-Corp in Georgia?
The cost to form an S-Corp in Georgia depends on several factors, such as the type of entity and the filing fees charged by the state. Generally, it can cost anywhere from $100 to $1,000 or more.
What is the difference between an S-Corp and a C-Corp in Georgia?
The main difference between an S-Corp and a C-Corp in Georgia is that an S-Corp is a pass-through entity, meaning that the income and losses of the business are passed through to the owners, while a C-Corp is a separate tax entity and the profits are taxed at the corporate level.
Is an S-Corp in Georgia required to have a Board of Directors?
An S-Corp in Georgia is not required to have a Board of Directors. However, it is typically recommended that an S-Corp have a Board of Directors to provide oversight and make important decisions.
What documents are needed to form an S-Corp in Georgia?
The documents needed to form an S-Corp in Georgia include a Certificate of Incorporation, Articles of Organization, Operating Agreement, and a separate application to the Internal Revenue Service.
What is the legal process to form an S-Corp in Georgia?
The legal process to form an S-Corp in Georgia includes filing a Certificate of Incorporation with the Georgia Secretary of State, appointing a registered agent, and submitting a separate application to the Internal Revenue Service.
Is there a minimum or maximum number of shareholders allowed in an S-Corp in Georgia?
An S-Corp in Georgia must have at least 1 shareholder and no more than 100.
What taxes does an S-Corp in Georgia need to pay?
An S-Corp in Georgia is subject to both income taxes and payroll taxes.
Does an S-Corp in Georgia need to file an annual report?
Yes, an S-Corp in Georgia must file an annual report with the Georgia Secretary of State.
Does an S-Corp in Georgia need to hold annual meetings?
Yes, an S-Corp in Georgia must hold an annual meeting of shareholders and directors.

Also Read

Why Georgia S Corporation is So Important

One of the main reasons why the Georgia S corporation is so important is its pass-through taxation structure. Unlike a traditional C corporation, where the business itself is taxed on its profits, an S corp allows income and losses to pass through to the shareholders. This means that instead of being taxed at the corporate level, profits are only taxed once on the individual tax returns of the shareholders. For small businesses, this can result in significant savings on taxes.

Another key benefit of the S corporation is the limited liability protection it offers to its shareholders. By forming a corporation, business owners are able to separate their personal assets from the debts and liabilities of the company. In the event that the business incurs financial difficulties or faces legal action, the personal assets of the shareholders are protected from being used to satisfy the business’s obligations. This added layer of protection can provide peace of mind to business owners and help safeguard their personal finances.

Moreover, forming an S corporation in Georgia can also help businesses attract investors and raise capital. Many investors prefer to invest in corporations rather than sole proprietorships or partnerships due to the limited liability protection and potential tax advantages. By structuring the business as an S corporation, entrepreneurs can make their company more attractive to potential investors, thereby increasing their ability to raise funds to grow and expand the business.

Additionally, the flexibility and convenience of an S corporation make it an attractive option for small business owners. S corporations are able to have a limited number of shareholders, allowing for a more tight-knit and manageable ownership structure. They also offer flexibility in terms of how profits are distributed among shareholders, providing businesses with the ability to tailor their financial arrangements to best meet the needs of their owners.

Furthermore, S corporations also have the ability to provide fringe benefits to their employees and shareholders. This can include retirement plans, health insurance, and other perks that can help attract and retain talented employees. By offering competitive benefits, businesses can create a more appealing work environment and maintain a skilled workforce that is essential for long-term success.

In conclusion, the Georgia S corporation is an important and valuable business entity that offers numerous benefits to entrepreneurs. From pass-through taxation and limited liability protection to increased access to capital and flexibility in ownership structure, the advantages of forming an S corporation are clear. For small business owners looking to establish their company, the S corporation is undoubtedly a wise choice that can help set them on a path to success.

Conclusion

In conclusion, starting an S-corp in Georgia is a strategic choice for entrepreneurs seeking the benefits of limited liability and favorable tax treatment. One can successfully establish an S-corp by following the outlined steps, including selecting a unique name, filing the Articles of Incorporation, obtaining necessary licenses, and adhering to state-specific regulations. Ultimately, this corporate structure offers a strong foundation for business growth and protection, making it a worthwhile consideration for those looking to launch a venture in Georgia.

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