An S Corporation in Georgia is for those who want limited liability and the more formal structure of a corporation, but with pass-through taxation of the business profits. The corporations in Georgia do not pay income tax as a company. Instead, shareholders pay their share of taxes on their own personal tax returns. This means that the business's profits are taxed only once. Let’s take a closer look at how you can register an S Corp in Georgia, alongside its benefits, formation requirements, and other relevant details.
Advantages of an S Corporation in Georgia
- The S Corporation helps protect shareholders’ assets in the event the business is sued or goes bankrupt. Here, the shareholders lose only the money they have invested.
- The corporation can continue even after the death or dismissal of one of the shareholders, unlike a partnership or a sole proprietorship.
- It is easier to get a loan or credit for an S corporation in Georgia
- Georgia S corporations are generally not liable for legal judgments against the business
Legal Requirements for an S Corp in Georgia
Forming an S corporation in Georgia requires fulfilling the given requirements:
- There shall be no more than 75 shareholders for the company
- Each shareholder must pay Georgia income tax individually
- The business must not create classes of stock (such as stocks with voting rights and stocks with distribution rights); each share of stock must be uniform in an S Corporation.
- To become an S Corporation in Georgia, an entity must first be a domestic corporation incorporated in the state of Georgia.
Note: A domestic corporation can be a joint-stock company, an insurance company, an association, a Limited Liability Company, or a Partnership. Fill out either an Articles of Incorporation form (if you want to form a corporation) or an Articles of Organization form (if you're going to form an LLC), and submit it to the Secretary of State in Atlanta.
Steps for Starting an S-Corp in Georgia
The section below follows the process of forming an S Corporation in Georgia, outlining key steps and legal requirements:
Get Your Federal Employer Identification Number (EIN)
Once you form an eligible legal entity, the next step is to apply for an Employer Identification Number with the Federal Government. You can fill out an application form online and submit it to the Internal Revenue Service. After reviewing your application, the IRS will send you your Employer Identification Number (EIN) within a few weeks.
File Your Articles of Association
After obtaining the EIN, you can file for the AOA, which requires you to specify the number of shareholders and provide complete company details, and submit it to the respective authorities.
Appoint a Registered Agent
Every corporation in Georgia is required to appoint a registered agent for the service of process within the state. The registered agent may be either an individual resident of Georgia or a business entity authorized to do business in the state. The agent should agree to accept service of process on your corporation's behalf prior to designation.
Set Up a Corporate Records Book
It is a book in which you keep all your corporation’s important papers, including minutes of directors' and shareholders' meetings, stock certificates, and other relevant documents. You must keep the corporate book at the principal office of the corporation.
Prepare Corporate Bylaws
Bylaws are an internal corporate document that outlines the basic ground rules for operating a corporation. They are not filed with the state. Your corporation is not legally required to have corporate bylaws, but you should adopt them because they:
- Establish your corporation's operating rules.
- Help show banks, creditors, the IRS, and others that your corporation is legitimate
Georgia S Corp Filing Requirements
Within 90 days of forming an S Corporation, the company must file an initial annual registration form with the Secretary of State, listing its three principal officers. The fee is minimal, $50. The registration form can be filed online.
After completing all the aforementioned steps, you must also comply with other tax and regulatory requirements, such as applying for a business license, holding the first board of directors meeting, and issuing stock.
Choose BSW for Seamless Company Formation
Forming a company in Georgia is a straightforward process once you are aware of the legal requirements. But in most cases, an experienced agent is required to make the process hassle-free. We at Business Setup Worldwide do just that for you. Our advisors in Georgia can assist you effectively and efficiently with the S Corp company formation process. Contact us today to get the detailed information.
