Three Business Structures [Infographic]
If you're in the process of creating a new business in Georgia, start your research here. In the infographic below, we've outlined 3 popular business structures you can use: Sole Proprietorship, Limited Liability Company (LLC) and Corporation. Each structure can help you establish a thriving business in Georgia; they just vary slightly depending on your goals.
Use this infographic to help you decide what type of business is best for you and to learn the first steps needed to get the wheels turning. Starting a new business can feel daunting, but don't let the fear of the unknown prohibit you from pursuing your passions!
A sole proprietorship is a quick and simple way for a single owner to start a business. On the other hand, a limited liability company (LLC) is owned and managed by on or more members who are granted limited liability. And finally, a corporation provides low liability and shared responsibility among owners. Corporations are owned by shareholders and managed by directors.
Pros and Cons
Each of the three business structures offer certain advantages and drawbacks. Let’s take a look.
Sole proprietorships and LLCs are both fairly easy to start, and sole proprietorships in particular require low start-up costs. Meanwhile, corporations take more steps to get off the ground, and both LLCs and corporations require more start-up filing fees.
While corporations generate capital through share of stocks, they are often subject to double taxation.
The primary drawback of a sole proprietorship is that the individual’s finances are connected to the business’s finances. The other two business structures offer separation of finances.
No matter which business structure you decide on, you’ll need to start off your business with 3 basic steps:
- Choose a name.
- Appoint a registered agent.
- File forms with the Secretary of State (if you’re forming an LLC or corporation), or the Clerk of the Superior Court (if you’re forming a sole proprietorship).
And your business is officially formed!
To finish off, you’ll need to get an employer identification number. If you’re starting an LLC, you also need to file your business with the Secretary of State’s office annually. If you’re starting a corporation, you’ll need to appoint a board of directors and have your first meeting, then issue stock.
Research is the first step to completion. Congratulations on your new endeavor!
About the Author
Rachel Hart is the User Interface designer for GeorgiaGov. She visually organizes information, and writes blogs on a variety of government-related topics.