BEWARE: For-Profit Endeavor Doesn't Mean For-Profit Corporation (C-Corp) as your Business Entity
This is a list of considerations to help determine the most suitable entity for your business. The Secretary of State cannot and will not provide advice as to how to organize your entity therefore it is easy to make the incorrect selection in the haste of getting your entity up and run. I fix that..
What is the nature of your business?If your business intention is to make profits, then you will need an entity designed to receive such profits under the tax code: LLC, C-Corp, S-Corp (separate article), LLP, LP, LLLP. Using one of these selections will limit your liability with respect to the actions taken on behalf of the company and insulate your personal assets from those of the company. This is critical.
Is there more than one investor associated with your business?If there is more than just yourself in pursuit of business on the company's behalf, then you need to make a selection that makes it easy for you to outline and express the relationship you have to the other investor(s) as well as the relationship of ALL investors to the company. This is also very critical.
Most often, this can be achieved through Articles of Organization or the Articles of Incorporation and it's Bylaws. Each Articles just mentioned is designed to memorialize your company structure and each contributor's responsibilities -- these can be all-inclusive (best practice) or can leave things open to interpretation (can create future risk). Depends predominantly upon the resources and the attorney(s) you use in formation of your entity. The most experienced attorneys already know which questions to ask and in which section the answers to those important questions should be located.
It is not wise to simply get started because the default rules of Georgia statute seek to qualify arrangements as General Partnerships where there is ambiguity or where the Articles are silent. Avoid this...
Are you planning to hire employees?When hiring employees or contractors for the first time, it is best practice to memorialize how and when they get paid to make tax time easier for yourself; however, knowing which tax selection to make is very important. There are ways that attorneys, NOT CPAs, can set up your tax in such a way that you can maximize your deductions and limit the amount of money you owe to the government based on your net profits (revenue - expenses = net profit). The tax selection should be made at the time the entity is chosen and created so that you can move forward confidently, understanding the exact expenses that are deductible and the expenses that maximize those deductions. Don't leave money on the table.
You're probably not best-suited for a C-Corp, so don't choose it.The Secretary of State (in Georgia) does not REQUIRE an attorney to form the company, although the website will encourage at every turn your need to consult with one. Thanks SOS. That being said, many business owners continue to organize their own entities and then have their accountants or themselves elect the tax they "feel" is the correct one. Unless you intend to create shares that would reasonably and conceivably be tried on an exchange, then you have no business organizing your entity as a C-Corp. There's double taxation (profits and dividends each), and you are required to remit payment for those taxes on a quarterly basis. Also, it can be onerous keeping track of corporate minutes, outlining everything in the Articles of Incorporation, and outlining actual Bylaws that you intend to follow. Also, the State requires more information about your info that they make available to the public with C-Corps.
My suggestion is consult with a local business attorney and take a look at the alternatives to the C-Corp because they exist and you should take advantage of them. I cringe every time I see a company organized as a corporation when they are generating less than a couple million dollars in revenue; it simply makes no sense and tells me they are unadvised. Avoid this, please...