Georgia Incorporation
Have you noticed that the other sites along side this one are these big “clearing houses” where you type in your state, or zip code, then you get a toll-free number and they send you to a landing page where you can input your business name?
These sites work for the masses, try to make a few bucks on $100 filing fees and move on to the next one. That is NOT what we do! We are here to help you get started, yet, but then to stay along side you as your business grows, keeping you from making any irreparable mistakes!
A Georgia incorporation, considered by itself, is not that complicated. You can easily get the basics about searching for a name and registering with the Secretary of State’s office.
However, it is the next few steps that, if not done properly, can cause you a great deal of trouble in the future. Regardless of the formation you have decided on, you must maintain good records! For starters, take a look at the Georgia incorporation records that you must get very familiar with:
When you form a Georgia incorporation of any form, you are creating a legal entity that is separate from yourself. Since it is a separate entity, it takes actions on its own and these actions should be maintained in separate records from other actions you are taking personally.
An easy example is that your new entity will have it’s own bank account, not your personal one. All financial transactions (income and expenses) will be run through the new entity’s bank account.
Even if you are the one and only member of the LLC or the one and only shareholder of a corporation, you may not commingle funds between the entity and your own personal financial transactions. Therefore, you must keep very good, separate corporate records.
An LLC is short for a Limited Liability Company. Even though we refer to it as a “company” it is still loosely considered another form of a Georgia incorporation. As with other Georgia incorporation forms, an LLC requires corporate records but they are just called something slightly different.
For example, when you form a corporation, you establish “Articles of Incorporation”. When you form an LLC, that same document is called “Articles of Organization”. Slightly different names, but same purpose!
Here are a few more that Georgia requires that you maintain:
As just mentioned, the Articles of Incorporation is the charter that establishes the entity and is so recorded with the Georgia Secretary of State. This is usually a simple, one page document, but it is often required as proof that the entity exists.
Then, you must set forth the corporate Bylaws. The Bylaws are the rules that govern how the entity must operate procedurally. It sets forth who will manage the entity, how that person may be replaced, where meetings are held, how notices of meetings must be delivered, what things require votes, who can vote, and so on.
Sometimes, the managers or directors may make important significant decisions that are referred to as Board Resolutions. Often they affect entity ownership, like defining a class of stock. Sometimes they may affect a change in business direction. Regardless of the issue, their relative significance is kept separate from other types of actions that are less significant.
Meetings of shareholders or company members are recorded in some fashion so that there is continuity between meetings and a reduction into writing of what took place in those meetings. These are called “Minutes”. They may seem tedious, often, but find importance when a small detail affects a future decision. Re-reading the minutes from an earlier time brings clarity to the issue and helps bring new members up to speed on the history of the entity.
The law governing a Georgia incorporation requires that each corporation have at a minimum, one Annual Meeting of the board. It may take all of 5 minutes, but you need to have one! The minutes of these meetings need to be kept separately in a corporate book.
If there are any Shareholder Communications, they need to be held for at least three years. It is not a bad idea to keep them forever if possible. They may come in handy if there is a shareholder lawsuit some time in the future.
Additionally, you need to keep a current list of all shareholders or members because it is necessary to keep them apprised of corporate activity. Without a current list, you will not be able to communicate with them as the law requires.
Most states require that you file an Annual Report with the Secretary of State’s office if you have a corporation. No such requirement exists with LLCs. You may find that the state provides a form for this.
Shareholders of corporations have the right to see some of the finances of the corporation. This can be limited, but some disclosure is required. At a minimum keeping a current Balance Sheet is helpful.
Finally, be sure to file Tax Returns for this entity. The IRS form will vary depending on the entity, so be sure your accountant is on board with everything you are doing from a business formation standpoint.
These days it’s easier to keep all these records. We recommend that you keep these records indefinitely, but at a minimum 7 years. This is more than the law requires but just a good business practice.
Clearly, having the help to meet these requirements is the more difficult part of the process. Anyone can do a name search to see if a name is available and then pay a fee and register with the Secretary of State. That’s the easy part! It’s complying with the rest of the legal requirements that people forget about….and that’s what gets you in trouble!
Let us help you do this RIGHT! If you want to know just how important this is….go up there and click on “horror stories” and you’ll see!
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