The business formation process can be a daunting and overwhelming obstacle. Other than choosing the legal entity type that is best for you, the legal formation process is the first step to effectively starting your business! Ensuring that you are in compliance with the formalities and filings, required by Georgia business law, is an essential element to corporate success.
In Georgia, the business formation requirements depend on your desired legal entity structure! Each business structure has unique filing and formality requirements that are necessary in order to create and keep your company in compliance. It’s critical for entrepreneurs, like yourself, who form a business to be aware of what is required to legally form each business entity in Georgia, as well as what is recommended to protect your business.
A Partnership is, arguably, the easiest business structure to legally create. In fact, a Partnership can be formed without the partners even intending to form it! All that is required to legally form a partnership is two or more persons carrying on a business for profit.
While forming a recognized Georgia Partnership may be simple, a new business owner should not settle for the bare minimum. Without further action from the partners, a newly formed Partnership is automatically governed by the Uniformed Partnership Act (UPA), which has been adopted by the state of Georgia. This Act is what we would call the “default rules.”
However, one of the primary benefits of forming a Partnership is the partners have the freedom to contract. Through a Partnership Agreement, the partners have the ability to circumvent many of the UPA default rules and, instead, choose exactly how they would like their Partnership to be governed. When drafting a Partnership Agreement, it is important to consult an Atlanta business formation attorney to ensure that the Agreement contains all of the necessary language to effectuate the goals of the partners.
When forming a Limited Liability Company (LLC), there are a couple of important steps. Georgia law requires that LLCs be registered with the Georgia Secretary of State. This registration includes a filing of the business name, the principal office address, at least one “Organizer”, and a named Registered Agent.
When choosing a business name, it is important to conduct a name search to be sure that your business’s name is distinguishable from the name of any other registered company. Name searches should be done on the Georgia Secretary of State website, as well as through the Georgia Patent and Trademark office.
The Organizers of the LLC are typically the future members of the LLC who are forming the company.
The Registered Agent is a very important piece of an LLC registration. A Registered Agent is nominated by the entity to receive any legal documents on the business’s behalf, including service of process (lawsuits). It is worth mentioning that P.O. Boxes and mail drops are not acceptable for the Registered Agent. You must name an individual and the street address where they can be found.
While you can act as your own Registered Agent, there are many benefits to naming your attorney for this position.
Similar to a Partnership Agreement, an Operating Agreement for an LLC is not required under state law but is highly recommended. The Operating Agreement rules and procedures for the operation of the LLC. Again, it is important to have an Atlanta business attorney review your Operating Agreement to ensure it covers all necessary bases and is in compliance with Georgia law!
A Corporation typically requires more filings and formalities than any other business structure. Similar to LLCs, they must be registered with the Georgia Secretary of State. The filing for corporations, however, must include the business name, the principal office address, officer information – including the name, title, and address for the Chief Executive Officer, the Chief Financial Officer, and the Secretary, and a named Registered Agent. This filing is titled the Articles of Incorporation.
In addition to the Secretary of State filing, Corporations are also required to maintain a Corporate Binder, consisting of Meeting Minutes for the Board of Directors, Meeting Minutes for the Shareholders, Bylaws, and a Stock Ledger. As with operation documents for Partnerships and LLCs, it is recommended to have a licensed Atlanta business attorney draft the documents in your Corporate Binder, ensuring that they are in compliance with state law.
Following the registration of the Corporation, there is also a publishing requirement. No later than one business day following the date of filing the Articles of Incorporation, the Corporation must publish a Notice of Intent to Incorporate in the newspaper that is the official legal newspaper within the county where the principal office of the corporation is to be located.
Forming a business is an inherently legal process, consisting of many steps and requirements that can be confusing. As mentioned in the previous paragraphs, it is highly recommended that, when you decide to form a business entity, you include a licensed Atlanta business attorney in your decision. They can provide advice, document drafting and review, and maintenance for your business – all of which provide you with the peace of mind that new business owners desperately need.
While the filings and documents can technically be done on your own, an attorney can ensure that you have legal confidence in the way that your business has been formed and structured.
Sparks Law would love to help you make your business goals a reality by ensuring that your formation process acts as a springboard for success. We take pride in giving our clients the peace of mind that their business has been formed on solid legal ground – allowing them to move forward and serve their clients right away! Contact our office to set up a consultation so that we can create a formation plan for your new business!
