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What Is An LLC?
This post is the second in a series of three which will explore the differences between a sole proprietorship, an LLC and a corporation.
A Limited Liability Company (LLC) is a way of forming your business in such a way that it is a hybrid between a partnership and a corporate structure. Unlike a sole proprietorship, an LLC provides a separation between personal assets and the profits of a business. For example, if a sole proprietorship goes under, the owner can also lose their personal finances because they are inextricably linked. If an LLC starts to tank financially, the owner or partners will not be vulnerable to lose their personal finances.
The Georgia Secretary of State website offers an informative document which outlines the basic steps to starting an LLC. The major steps include:
1.) Choose a name. The name of your LLC must include some abbreviation or usage of the words “Limited Liability Company.” The maximum amount of characters in the name can’t be more than 80, including spaces and punctuation. The name must be different from any other business name in the Secretary of State corporations division. You can search the database to make sure the name you want isn’t already taken, then reserve the name you want using the same website. The reservation lasts for 30 days and costs $25.
2.) File Articles of Organization and Transmittal Forms. You can file the articles of organization on the Secretary of State corporations website as well as submit the transmittal forms. The filing fee for the forms is $100.
3.) Appoint a registered agent. Every LLC in the state of Georgia has to have a registered agent. This person must agree to accept legal papers in the event that the LLC is sued.
4.) File an annual registration. Each LLC in Georgia is required to pay the $50 registration fee between January 1 and April 1 of the year following the calendar year in which the LLC was formed.
An LLC is a wise choice for many individuals who are seeking to open a small business. There is a level of liability protection, the filing fees aren’t very expensive and the process of registering with the state is very straightforward.
For more information, call the LLC office of the Secretary of State at (404) 656-2817 or send them an email.
About the Author
A Georgia native, Rachael Wheeler works as a Web Support Specialist for GeorgiaGov. She writes about a variety of current topics relevant to the Georgia government.