So you have a great idea and are
ready to move ahead with launching your own business. Congratulations! There is a lot to gain if you are successful,
but you can quickly find yourself having to backtrack and undo mistakes if you
do not carefully lay the legal foundation you need. This short checklist of some key matters will
help get you started:
·
Decide what kind of entity you need for your
business to satisfy your various tax, business, liability, and ownership
needs. Should you organize as a limited
liability company, a corporation, or something else?
·
Create the entity with and obtain a certificate
of organization from the Georgia Secretary of State. If you create it with another state’s
secretary of state’s office but will be doing business in Georgia, you need to
file in Georgia as a foreign entity and obtain a certificate of authority from
the Georgia Secretary of State so that you can do business here. (You many also need to register with the
secretary of state in other states where you will do business.) If you are going to be doing business under a
name other than the entity name that you register with the Secretary of State, you
will need to register your trade name with the Clerk of Superior Court of your
county. (See our September 19, 2013 blog
entry on smartly choosing a business name.)
·
Have an operating agreement or shareholders’
agreement prepared for your new business entity. Such an agreement will govern the internal
operations of your business, including how you get paid, how you bring new
owners in, and what happens when an owner wants to leave.
·
Apply for a federal tax identification number,
called an Employer Identification Number (EIN), if you need one. You will definitely need one if you plan to
hire employees or if you operate your business as a corporation or a
partnership, or for one of many other reasons.
You may need one when setting up a bank account for your business.
·
Obtain state tax registration numbers from the
Georgia Department of Revenue and in any other state where you will be required
to remit tax. Learn what you will have
to do to timely remit that tax; for example, in Georgia, you will use the
online Georgia Tax Center.
·
While we are on that topic, you should have a tax
compliance plan. Are you required to
collect sales tax from your customers in your particular business? Should you be paying sales tax to your
vendors or providing them with a resale certificate? In what other states, if any, do you have
sufficient connection to require you to collect and remit sales tax from
customers? How about income tax? Be sure you withhold properly from your
employees and pay and file anything required of your entity.
·
Sign a lease agreement, if you will be renting
space for your business, or have the warranty deed for the property for your
location, and obtain a certificate of occupancy.
·
Apply for a business license in your county or
city, depending on whether your business will be located within city limits. Depending on the city or county where you
need to register, you will have to bring with you documentation of certain
other items on this list before you can apply.
Check your county or city government’s website for details on how to
apply.
·
Open a bank account for your new business
entity.
·
Apply for necessary insurance coverage to
protect your property, your employees, your customers, and yourself.
This checklist is by no means
exhaustive, and different requirements may exist depending on exactly what your
business will do. You must also be
conscious of annual registrations and renewals that follow some of these items,
such as Secretary of State registrations and business licenses. Wood & Bembry LLC helps new businesses
determine exactly what they need and can work with you through the process to
make sure everything is done right the first time.
Material presented on the Wood &
Bembry LLC website is intended for information purposes only. It is not
intended to be professional advice and should not be construed as such. Any
unauthorized use of material contained herein is at the user’s own risk.
