How to start a business in Georgia

Starting a business in Georgia is relatively painless. Most business structures cost the same amount ($100), and there’s no massive annual tax like there is in some other states – just an annual registration that requires a $50 fee if you file online or a $60 fee if you file with a paper form. While the steps you need to take to register your business depend on the entity type, here are the seven steps you’ll need to follow: 

1. Start with a business plan.
2. Select a business entity.
3. Choose a business name.
4. Register your business entity.
5. Apply for an employer identification number (EIN).
6. Open a business bank account.
7. Apply for required licenses and permits in Georgia.

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7 steps to start a business in Georgia

1. Start with a business plan

A business plan doesn’t just help keep you on track — it also tells a valuable story to investors. Kristen Jones, attorney at Turner Jones Legal in Lincolnton, Georgia, said that the higher your entity level, the more involved your business plan needs to be. One important reason for this is the fact that investors in a C corp will want more details. 

But if you’re a Georgia limited liability company (LLC) or S corp without any investors, having a fully fleshed out business plan can also help with securing loans or grants. Jones notes that due to Georgia’s numerous rural localities, grant funding can be particularly abundant depending on your industry — especially if you’re a minority- or woman-owned business. 

“I recommend tailoring your business plans to the funding you are seeking,” said Jones. “Show the investors and funders why you and your business are a good investment for them specifically.”

This may mean writing more than one business plan depending on the funding opportunity — or at least tweaking the document a little each time. Generally speaking, a business plan includes the following elements: 

• An executive summary that includes your business’s mission statement, its primary product or service, information about company personnel, your company’s current finances and its plan for growth. 
• A company summary that includes your business’s competitive advantages. You’ll also want to include your weak points — and how you plan to address them.
• Market research.
• A section on the legal structure of your business and the individuals that are currently fulfilling each role. 
• Information about your service or product line, including any ongoing research and development (R&D). 
• A section on how you’ll attract and retain customers, including information on how sales will be executed.
• A funding request that outlines how much money you’ll need and exactly how you’ll use it. 
• Funding projections, including forecasted income statements, balance sheets, cash flow statements and capital expenditure budgets for at least the next five years. Be sure not to forget to factor in the costs of doing business, like e-commerce platform fees or credit card processing fees.
• An appendix that includes any supporting documentation.

2. Select a business entity

There are five main business types in Georgia. Here are the pros and cons as you decide which is best for you. 

ENTITY TYPE	PROS	CONS
Sole proprietorship	No need to file with the state, though you may have to register with your county or city.	No limited liability protection. Will have to pay full payroll taxes on both the employer and employee side. Cannot have traditional investors who buy shares.
LLC	Limited liability protection. Ability to attract investors with no limitations on number or type of investors.	Owner will have to pay full payroll taxes on both the employer and the employee side. Less investor interest than a C corporation.
S corp	Can take some of your profit as an owner distribution, so it’s not subject to payroll taxes. Ability to attract investors.Limited liability protection. No double taxation like you’d find with a C corp.	Can deduct as many healthcare costs as you can with a sole proprietorship or LLC, but not as many as a C corp. Number and types of investors are limited.
Limited partnership (LP)	Limited liability protection — but only for limited partners. Unlike in other states, limited partners in Georgia can be involved in the day-to-day operations. Ability to attract investors as limited partners. Less paperwork requirements after registration in the state of Georgia. No double taxation like you have with a C corp.	No liability protection for general partners. LP can dissolve if a partner dies or withdraws from the company depending on how the limited partnership agreement is written.
C corp	Increased liability protection. Ability to deduct not only medical premiums but also medical expenses for the owner and fringe benefits for employees. No limitations on number or locations of investors.	Income is subject to double taxation. Higher paperwork burden and oversight than other types of entities, making it more expensive to run. More IRS scrutiny than other business types.

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Jones points out that Georgia businesses may also be classified as an LLP or PC but that these business structures will still fall into one of the above categories for tax purposes.

3. Choose a business name

To name your business, you’ll have to make sure it’s distinguishable from other business names per Georgia state guidelines, which include the fact that you have to ask for state permission to use words like ‘insurance’ or ‘fidelity.’ You can’t just change the way something is spelled as you strive to make it distinguishable.’ You can find existing business names by using the Georgia name search tool. If your name appears in the database, you must choose another one.

4. Register your business entity

Nothing is official until you register your business with the state. Sole proprietorships are the only business type that doesn’t need to register with the state of Georgia but may still need to register at the county or local level. All other business types can register online with the Georgia Secretary of State’s office. LLCs, LPs and corporations all have to pay $100 to register.

Jones says most filings currently take about three weeks to process. Most of her clients opt to pay an extra $100 to get expedited processing within two business days.

5. Apply for an EIN

Your employer identification number (EIN) is a tax ID for your business issued by the IRS. It is used to complete tax-related tasks such as filing federal tax returns as well as completing operational tasks such as hiring employees, applying for business licenses, engaging investors or lenders or opening a business bank account. You can apply on the IRS website within minutes and for free.

6. Open a business bank account

When you start a business, you have to be careful to not pierce the corporate veil. When you boil it down, this basically means that you don’t mix personal and business expenses. Doing so could cost you your limited liability status, opening up your personal assets to seizure in any lawsuits against your business.

Opening a business bank account is one of the easiest ways to ensure you don’t pierce the corporate veil. Using the correct accounts for purchases and debits ensures your personal and business expenses stay entirely separate. This is important for credit purchases, too, so make sure to explore the best business credit cards rather than swiping on your personal consumer card.

7. Apply for required licenses and permits in Georgia

While there are no general business license requirements at the state level in Georgia, there are many specific professions and industries that will require state-level licensure. You can find out if any licensure requirements apply to your business on the Georgia licensing divisions’ website.

In addition to state requirements, many counties and localities have their own licensing requirements that can go above and beyond the state. You can learn more about these requirements by contacting your local chamber of commerce.

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