Is a forming a formal Incorporation in Georgia right for me and my company, & what are my options.
This is a guide to answer some of the questions associated with whether or not to formally incorporate in Georiga, to set up a Limited Liability Company in Georgia, to set up a Professional Incorporation in Georgia, or do something other than these options in Georgia.
Should I form an Incorporation in Georgia?There are pros and cons of formally incorporating in Georgia. Businesses incorporate in Georgia usually for two specific reasons: 1.) To protect the owners or shareholders of the corporation from legal liability; and 2.) For accounting purposes. The pro to incorporating in Georgia is that it does add another level of protection to the owners and the shareholders from being personally liable for the acts of the corporation and its members. It does not, however, completely absolve the owners or shareholders from liability as the veil of the corporation can be "pierced" commonly known as piercing the corporate veil in which case the owners and/or shareholders could be held personally liable for the acts of the corporation or its members. The other con of incorporating in Georgia is that, although there may be tax benefits to such an incorporation, corporate taxes must be filed each year and this can become a cumbersome responsibility especially for the smaller corporate entity. There are also two (2) types of corporations and those are sub-s corporations and sub-c corporations. Unless you specifically designate your corporation as a sub-s corporation, then you are by default a sub-c corporation. The difference herein lies in the accounting and not the legal liability so which corporation is best for you should be answered by a qualified tax accountant who knows and understands your total financial picture and goal or the company.
If I do not formally Incorporate in Georgia, then what are some of my other options?This will discuss other options besides a formal Incorporation in Georgia such as a Limited Liability Company (LLC). If you do not want to incorporate in Georgia you have several options such as: 1.) Do nothing and act without the protection of the corporation; 2.) Set up a Limited Liability Company (LLC) and then you don't have to file corporate taxes each year; 3.) Form a Sole Proprietorship; and/or 4.) Form a Limited Liability Partnership (LLP) which again keeps you from having to file corporate taxes each year. If you are in one of the many professions such as an attorney, accountant, dentist, doctor, and so forth, you may also set up a Professional Corporation. The protections are the same as a corporation yet you are still responsible for filing annual corporate tax returns that can be burdensome for the smaller company or solo practitioner.