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S Corporation in Georgia

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 profits of the business are taxed only once. A corporation must have 75 or fewer shareholders among the eligibility concerns to become an S Corporation in Georgia.

In short, it can be said that investors must comply with these 3 important S Corporation requirements. They are:

  1. There shall be no more than 75 shareholders for the company
  2. Each shareholder must pay Georgia income tax individually
  3. 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)

Advantages of an S Corporation in Georgia

  • The S Corporation helps protect the shareholder’s personal assets if the business is sued or goes bankrupt. Here, the shareholders lose only the invested money
  • The corporation can continue even after the death or dismissal of one of the shareholders unlike partnership and sole proprietorship
  • It is easier to get loan or credit for an S corporation in Georgia
  • Georgia S corporation are not normally liable for legal judgments against the business

How to Create an S Corp in Georgia?

In order to become an S Corporation in Georgia, an entity must first be a domestic corporation incorporated in Georgia. A domestic corporation can be a joint-stock company, insurance companies, and associations, 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 want to form an LLC), and submit it to the Secretary of State in Atlanta. The further process to form an S Corporation in Georgia is as follows:

1. 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 an application form online and submit it to the Internal Revenue Service. After going through the application, the IRS will send you your EIN in a few weeks.

2. File Your Articles of Association

After getting the EIN, you can file for the AOA wherein you must mention the number of shareholders and the complete company details and submit it to the respective authorities.

3. Appoint a Registered Agent

Every corporation in Georgia must appoint a registered agent for the service of process in the state. The registered agent may be either an individual resident or business entity that is authorized to do business in Georgia. The agent should agree to accept service of process on your corporation's behalf prior to designation.

4. Set Up a Corporate Records Book

It is a book in which you keep all your corporation’s important papers, including minutes of director and shareholders meetings, stock certificate etc. you must keep the corporate book at the principal office of the corporation.

5. Prepare Corporate Bylaws

Bylaws are an internal corporate document that set out the basic ground rules for operating your 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 (1) establish your corporation's operating rules, and (2) help show banks, creditors, the IRS, and others that your corporation is legitimate

6. Comply with the Annual Registration Requirements

Within 90 days of forming an S Corporation, the company must file an initial annual registration form that lists three principal officers with the Secretary of the State. The fee is minimal $50. The registration form can be filed online.

After you complete all the aforementioned steps you must also comply with other tax and regulatory requirement like applying for the business license, hold the first board of directors meeting, issue stock etc. The company formation in Georgia is a straightforward process once you are aware of the legal proceedings. But in most of the 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 help you in the S Corp company formation process effectively and efficiently. Contact us today to get the detailed information.