6 Things to Do When Creating a Company
Whether you plan to start a business independently or with a partner, you may want to consider limiting your potential liability through incorporating as an LLC under Georgia’s Secretary of State. It is essential, when starting an LLC, to properly document and file all the necessary information. The following are steps are provided to show both the necessary and suggested actions when creating an LLC.
- Register/ Reserve your name with the Georgia Secretary of State
The first step in creating an LLC is to reserve your business’s name with the Georgia Secretary of State. Georgia has specific requirements when creating a name for an LLC. For example, the name must contain one of the following terms: limited liability company, limited company, LLC, or LC. Before submitting your name, make sure you comply with all Georgia naming rules.
During this time, you will also want to choose a Registered Agent for your LLC. The Registered Agent listed with the LLC acts as a third party to accept any service of process or government notifications. Having a Registered Agent is required for an LLC.
- Create the LLC.
Once your name is approved by the Secretary of State, you will need to register your business by filing your Articles of Organization. This step will, again, be done through Georgia’s Secretary of State. In order to operate as an LLC, it is required that the Articles of Organization be filed and accepted.
- Get your Georgia and Federal Tax ID numbers.
Once your Articles of Organization are filed and approved, you will want to obtain its Employer Identification Numbers (EIN). It is necessary to get an EIN in order to operate as a business financially. An EIN allows the LLC to file taxes and open bank accounts.
- Check with your local city and county to comply with all licensing and insurance requirements
Finally, the last mandatory step in creating an LLC is to check your local and county ordinances to see if a special license is required. Certain businesses will require a license in order to conduct business operations. Additionally, specific insurance may be required to operate some activities.
- Create an Operating Agreement
Although this step is not mandatory, it is suggested that owners create an operating agreement. An operating agreement will act as the contract between several owners. The operating agreement will help to spell out the business’s ownership, voting rights, dissolution terms, and more.
If you decide not to create an operating agreement, there is no penalty. However, this is the best way to protect your interest as you move forward doing business. You can prepare your own operating agreement; however, it is advised that you speak with any attorney when preparing your operating agreement.
- Contact a lawyer and CPA to help navigate the process and ensure your company is protected.
Although the previous steps can be done without a lawyer or CPA, it is highly recommended to seek guidance. Having a lawyer create or check through the LLC’s Operating Agreement will provide a more solid foundation and protection for you and your business.
Also, although you may be registered as an LLC, your tax status may be more beneficial as an S Corp or another type of organization. By checking with licensed professionals, you will be able to ensure a protected, cost saving business entity.
Forming a business is exciting, but it is also important to make sure you get it right. These six points only cover a portion of the details required to form an LLC. We will be happy to discuss your business creation with you. Contact us today for a consultation.