Georgia is a wonderful place to start a business — access to international trade, the world’s busiest airport (Atlanta) and one of the main technical hubs in the U.S. make it an innovator’s dream. Great universities, access to talent and a rich culture combine to create the perfect backdrop for a successful business venture.
Georgia is already home to the headquarters of Coca-Cola (the most famous brand in the world), and many other large businesses including Home Depot, UPS, Delta and Suntrust are proud to call the state home.
Should You Form an LLC, an S Corporation or a C Corporation in Georgia?
Most entrepreneurs will have a choice of starting an LLC, an S Corporation or a C Corporation in Georgia. We’ll help you select the right type of business entity, as each one is treated differently by the GA Secretary of State Corporations Division, the law, the IRS and other official bodies.
Here’s a quick overview of each type of business entity.
Advantages of Incorporating in the State of Georgia
Georgia corporations have several benefits for business owners.
- Georgia corporations provide the strongest form of liability protection possible. They insulate your personal assets and finances from those of your business.
- This means that any liabilities created by your corporation (debts, obligations, damages, bankruptcy or other liabilities) should not impact your personal money, property or assets — they are considered completely separate from a legal perspective.
Choosing a Georgia S Corp or C Corp Over an LLC
There are several reasons an entrepreneur might choose to form a GA corporation instead of a Georgia LLC.
Taxation Benefits of a Georgia S Corporation Over an LLC
A Georgia S Corporation will often pay less self-employment tax on owner earnings than an LLC. Note that a GA LLC can choose to be treated as an S Corporation for tax purposes by filing Form 2553 with the IRS, which removes this restriction. Georgia C Corporations do not have this advantage over an LLC.
Georgia S Corporations and C Corporations Make It Much Easier to Transfer Stock and Ownership
Georgia S Corporations and C Corporations make it much easier to buy, sell and transfer stock. C Corporations also allow you to file an IPO and list stock on the public stock market.
If You Want Maximum Flexibility for Buying and Selling Stock, Choose a Georgia C Corporation
C Corporations provide certain benefits when it comes to buying, selling and transferring stock. Here are the rules for both S Corps and C Corps:
Advantages of Setting up a Georgia S Corporation
In addition to the general benefits above, GA S Corporations provide several other advantages:
Advantages of Setting up a Georgia C Corporation
In addition to the general benefits above, Georgia C Corporations provide several other advantages.
Important Points About Forming a Corporation in the State of Georgia
Here are some areas to be aware of when you’re creating a corporation in Georgia.
First, GA corporations are formed on the state level by filing Articles of Incorporation with the GA Secretary of State. Incfile specializes in helping entrepreneurs form Georgia S Corporations and C Corporations and can collect the information and file this form on your behalf.
When you incorporate a business as a corporation, the Georgia Secretary of State will treat your business as a C Corporation by default. A C corporation will become an S Corporation when all shareholders wish to change the corporation’s status to an S Corporation with the IRS. You can make this choice when you first form your Georgia corporation or at any time after you incorporate.
There are some similarities and some differences between S Corps and C Corps:
Rules and Regulations for Georgia Corporations
All Georgia corporations must follow stringent compliance rules and regulations. These include financial reports, bylaws, corporate formalities, taxes, fees, business licenses and the like. You can find links to these below.
Are you ready to start your Georgia corporation? If so, we can help. We provide comprehensive corporation formation services for both S Corporations and C Corporations in Georgia.