Starting a Limited Liability Company (LLC) in Georgia is exciting, but it can also be overwhelming and costly. You can reduce your stress significantly by researching all steps involved or using an LLC formation service to take you through each step. This guide presents basic start-up costs when forming an LLC in Georgia.
Keep in mind that costs can vary significantly by county and it may be necessary for administrators to occasionally increase prices to cover processing fees. Even so, the estimates below will help you plan your administrative start-up costs.
Georgia allows new LLC owners to conduct a business name search at no cost. You also have the option of reserving a business name for $25 while you are still in the process of launching your LLC. You may wish to do this if you have your heart set on a certain business name and have concerns it may not be available when you are ready to claim it.
A common practice among LLC owners in Georgia is to register a single business name and then operate several branches of the company under different names. You need to file “Doing Business As” (DBA) paperwork to reserve additional names. The filing fee is $25 per DBA you request.
Georgia requires all new LLC owners to file articles of organization before officially recognizing the company’s status. The current fee to do so is $100. You may see this referred to as an LLC filing fee.
The Secretary of State also requires LLC members to file an annual report outlining the status of the business and whether leadership has made any significant changes in the past year. Annual fees are $50, which you pay between January and April. This is required even when your LLC has not made any changes.
Georgia is one of dozens of states that require LLCs to assign a registered agent to receive legal correspondence on behalf of the company. This person must be available during regular business hours and receive mail at a street address rather than a post office box. You do not have to pay a fee if you choose to be your own registered agent or appoint someone to the task.
Many LLC owners opt to use a registered agent service to keep their addresses private and free themselves from having to be available during regular business hours. The registered agent service receives and logs all official communication for the LLC. Fees for such services range from $199 to over $400 per year.
Georgia does not require LLC members to create an operating agreement, but doing so is highly beneficial. An operating agreement outlines such things as the names of members and their roles, the initial investments, and the formal process to follow when a member decides to leave the LLC.
You and your business partners do not need to file an operating agreement with the state if you choose to create one. You also do not need to pay anything to create the agreement if you decide to prepare it yourselves. Expenses can add up to over $1,000 if you seek help from an attorney.
The above are some basic business costs you should expect to incur, while the fees below do not always apply to every situation.
Georgia is one of several states that impose a franchise tax on most LLCs, partnerships, and corporations. Be careful not to confuse franchise taxes with income taxes, as they are not the same thing. The state government does not base franchise taxes on business income as the federal government does on income tax.
Despite its name, you do not pay a franchise tax for operating a franchise business in Georgia. The Secretary of State assesses the tax for the privilege of owning a corporate franchise or doing business within Georgia’s state lines. You do not have to pay franchise taxes if the net worth of your business is less than $100,000.
Georgia calculates the franchise tax amount based on a company’s net worth. The maximum amount assessed is $5,000 for a net worth that exceeds $22 million. You might want to consider hiring an accountant or tax advisor to help determine if you are liable for paying this tax.
State, county, or local governments may require your business to obtain certain licenses and permits before you can officially begin serving customers. Licenses grant you permission to perform certain actions, while the purpose of a permit is to ensure your business follows established safety guidelines.
You do not need to obtain a business license at the state level when you operate an LLC in Georgia. However, you do need to apply for a business license if you plan to launch your LLC in any of these cities:
Certain types of businesses require special business licenses. Common examples include bars, massage therapists, and pool halls. Here are some examples of other types of licenses or permits you may need to obtain in Georgia:
Due to the large number of potential permits or licenses you may need to obtain, and the varying cost for each, your best bet is to contact the Georgia Secretary of State directly.
Georgia requires all LLCs to file an annual report to update any pertinent information and ensure compliance with all state laws. This report is due by April 1 each year, and the fee to file it is $50.
The initial fee to register an LLC is $100, and the cost is $50 each year thereafter to file the annual report.
Although you might be feeling overwhelmed at the number of fees you could potentially be responsible for paying to form your LLC, the good news is you can write most of them off on your federal tax return. The following represent the most common examples:
Are you looking for a quick summary of your LLC start-up registration costs? Below are the most common fees you can expect to pay:
Annual report/Statement of information | 50$ |
Business licenses & permits | Vary by municipality, but fees for a business license range from $10 to $1,000 |
Filing a DBA (optional) | $25 per assumed name |
Franchise tax | Exempt if business net worth is under $100,000; maximum of $5,000 |
LLC filing fee | $100 |
Operating agreement (optional) | Up to $1,000 if you hire an attorney or a service |
Registered agent service (optional) | $199 to $400 |
Reserve business name (optional) | $25 |
Knowing the LLC formation fees you are responsible for paying and remitting the correct amount can be challenging. You can save money by choosing to complete the process yourself, but it may end up costing more in the long run if you miss deadlines or make mistakes. Hiring an LLC formation service can provide you with valuable peace of mind at this exciting yet stressful time.
This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness.
Shai Shmarel started his life as a corporate lawyer before switching to being an SEO and Content Manager at Tailor Brands. He has experience in managing companies, rankings SERPs and covering a content-driven approach for all things legal, business and marketing. When off work, you’ll usually find him chilling with a cup of coffee and a book in the desert.
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