A list of must-dos for starting a new Georgia business

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.

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