Forming a Corporation in Georgia

Here is an outline of the steps you need to follow in order to form a corporation (specifically, a "C corporation") in Georgia. You should also read the general section on forming a corporation for information that is applicable in any state. Additionally, you should familiarize yourself with the Georgia Secretary of State's website and the First Stop Business Guide, which contain useful information and resources.

1. Choose a business name for the corporation and check for availability.

• Please see our section on choosing and checking the availability of a name for your small business, as well as our section on the trademark law aspects of choosing a name.

• Georgia law requires that a corporation name include the word "corporation," "incorporated," "company," or "limited," or the abbreviation "corp.," "inc.," "co.," or "ltd.," or words or abbreviations of like import in another language. Additionally, your corporation name must be distinguishable from other names on file with the state, and it may not contain anything which, in the reasonable judgment of the Secretary of State, is obscene. It may not exceed 80 characters, including spaces and punctuation.

• Although you are not required to do so, consider registering your business name as a federal and/or state trademark.

2. Recruit and/or appoint a director or directors for the corporation.

• Under Georgia law, a corporation must have at least one director.

• Directors must be at least eighteen years old.

• Directors need not be residents of Florida or shareholders of the corporation, unless the articles of incorporation so require.

• Either the articles of incorporation or the corporation's bylaws must state the number of directors that will constitute the corporation's board of directors. The initial director or directors of the corporation may -- but need not -- be named in the articles.

3. Prepare and file articles of incorporation with the Secretary of State.

• The filing fee is $100. The Secretary of State's website provides a sample articles of incorporation, with instructions, as part of the Filing Procedures Guide, which includes other information and instructions you may find useful during this process. For general information on corporate articles of incorporation, please see the Articles of Incorporation page.

• The articles of incorporation must be accompanied by Transmittal Form 227, which certifies to the state that you are filing articles and will fulfill the publishing requirement explained in the next step.

4. Publish a notice of intent to incorporate in a local newspaper.

• The Secretary of State's website has a list of the qualified newspapers. The form of the notice is described in the Filing Procedures Guide. You should send the notice with $40 to the newspaper in your county within one day of filing your articles of incorporation.

5. Create the corporation's bylaws.

• There is no set criteria for the content of bylaws, but they typically set forth internal rules and procedures for the corporation, touching on issues like the existence and responsibilities of corporate offices, the size of the board of directors and the manner and term of their election, how and when board and shareholder meetings will be held, who may call meetings, and how the board of directors will function. You are not required to file bylaws with the Secretary of State, but the corporation should keep a copy at its principal place a business. For general information on corporate bylaws, please see the Bylaws page.

6. Hold an organizational meeting.

• See the general section on Forming a Corporation for details. You can find the Georgia statute relating to the organizational meeting at Ga. Code Ann. § 14-2-205 (link is to entire code; click through to Title 14, Chapter 2, Article 2 and then locate the specific provision).

7. Issue stock certificates to the initial owners of the corporation.

• See the general section on Forming a Corporation for details. The Georgia statute relating to issuance of stock certificates is located at Ga. Code Ann. § 14-2-625 (link is to entire code; click through to Title 14, Chapter 2, Article 6 and then locate the specific provision). Unless the articles of incorporation state otherwise, the board of directors has the authority to set the "consideration" (i.e., the amount to be received) for each share of stock.

8. Obtain any required local licenses.

• See the general section on Forming a Corporation for details.

9. Determine what tax and other regulatory obligations the corporation has, and take care of any necessary registrations.

• Request an Employer Identification Number (EIN) from the IRS. This can be done via its online application. There is no filing fee.

• Register for Georgia business taxes using the Georgia Department of Revenue website. The Department of Revenue website has detailed instructions on the different taxes and the registration process.

• Whenever you hire an employee in Georgia, you must inform both the IRS and the State of Georgia. You can find details of all the necessary steps, including verifying work eligibility and withholding allowances, on the Hiring Employees section of the IRS website. You can find state-level information about reporting new hires at the Georgia New Hire Reporting Website.

• If you have three or more employees in Georgia (including corporate officers), you must carry workers' compensation insurance.

• As a business owner or employer, there may be other informational returns that you have to file annually or semi-annually with the IRS. For more information, take a look at the IRS Guide To Information Returns.

• Georgia's current corporate income tax rate is 6% of net income attributable to business done in Georgia. In addition, corporations formed in Georgia are subject to a net worth tax. The minimum net worth tax is $10 for a net worth less than $10,001. The maximum is $5,000 for a net worth in excess of $22 million. The net worth tax table can be found in the IT-611 Booklet under "Net Worth Tax Table."

10. Open a bank account for your business.

• It is a good idea to keep your business's finances separate from your personal accounts. A good way to do this early on is by opening a bank account for your corporation. You will probably need a Tax ID number (EIN), a copy of the articles of incorporation, and a resolution identifying authorized signers if those names are not listed in the articles. Here is one example of the documentation that banks ask for.

Other Notable Requirements for Maintaining a Corporation in Georgia

• Georgia corporations must file an Annual Registration with the Secretary of State one year after the date of formation and every year thereafter. The filing fee is $30.

• Georgia requires certain documents to be kept at a corporation's principal place of business. The required documents are described in Ga. Code Ann. §§ 14-2-1601 and 14-2-1602 (link is to entire code; click through to Title 14, Chapter 2, Article 16, Part 1, and then locate the specific provisions).

• Ga. Code Ann. § 14-2-1620 (link is to entire code; click through to Title 14, Chapter 2, Article 16, Part 2, and then locate the specific provision) states that a corporation must send certain financial statements to shareholders within four months of the end of its fiscal year and before the annual meeting of shareholders (if the meeting is less than four months after the end of the fiscal year).

Additional Steps and Information about Forming an S Corporation

• An S corporation has the same basic organizational structure as a regular corporation, but some of the tax advantages of a partnership or LLC. An S corporation pays no federal income tax, except for tax on certain capital gains and passive income. Instead, the corporation's profits and losses "pass through" to shareholders, and profits are taxed at individual rates on each shareholder's Form 1040. Certain requirements and additional obligations apply -- please see the S Corporation page for details.

• To form an S corporation, designate "S" status with IRS via Form 2553 within 2 months and 15 days of filing your articles of incorporation with Georgia. There is no additional paperwork that you need to file with Georgia in order to obtain "S" status.

• If the corporation has non-resident shareholders, however, every year they must file Form 600S-CA, agreeing to pay Georgia income tax on their proportionate part of the corporation's Georgia taxable income.

• Even if your S corporation has no taxable income, you must still file a Georgia corporate income tax return on Form 600-S every year.

Additional Steps and Information About Forming a Close Corporation

• Georgia law has provisions relating to what is known as a "close corporation" -- a classification for a corporation with a small number of shareholders (fifty maximum) that does not issue stock to the general public. In general, running a close corporation permits a less formal management style under the auspices of a shareholders' agreement. Please see the Close Corporation page for details.

• In Georgia, the articles of incorporation of a close corporation must contain a statement that the corporation is "a statutory close corporation." The articles (or bylaws or a shareholders' agreement) may include a provision stating that the corporation will be managed by its shareholders rather than a board of directors pursuant to Ga. Code Ann. § 14-2-922 (link is to entire code; click through to Title 14, Chapter 2, Article 9, and then locate the specific provision). If you are interested in forming a close corporation, you should contact a lawyer.

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