Opening a Company in Georgia: LLC or Corporation

To open a company in Georgia [in America] it is necessary to file the Articles of Organization with the Georgia Corporations Division. Atlanta is the best city in Georgia to open a company. If you intend to open an LLC, the LLC name must include "Limited Liability Company" or an abbreviation such as "LLC". The name must not already be used in Georgia and must be at most 80 characters, spaces included. Within a few days of filing the Articles of Organization, the Georgia Corporations Division approves the opening of the company, and from that moment you can begin to operate.

The Articles of Organization to open the company must include:

• Company name,
• Number of authorized shares,
• The issuance price of the shares, The company's purpose
• Name and address of the Registered Agent [The Registered Agent must have an address in Georgia]
• Names and addresses of the incorporator,
• Address of the company's principal office, and
• The share structure must also be specified, that is, whether, in addition to issuing ordinary shares, it is intended to issue preferred shares, how many classes of preferred shares, and the characteristics of each class of preferred shares.

The Nexus in Georgia for Corporate Income Tax Purposes

The business nexus is determined based on facts and circumstances. A company is considered "operating" in Georgia and thus subject to Georgia's corporate income tax if it owns property in Georgia or "conducts activities within Georgia for the purpose of profit or financial gain" (Ga. Code Ann. § 48-7-31(a)).

An interpretive regulation adds that a company may be considered operating in Georgia even if it acts through agents and may also be considered operating in Georgia if it acts through the ownership of an LLC or a pass-through entity, such as a partnership, that operates in Georgia (Ga. Comp. R. & Regs 560-7-7-.03(1)).

Companies falling under the parameters of Public Law (86-272) can rely on the protection offered by this law to avoid paying state income taxes in Georgia.

Convening the First Shareholders' Meeting and the Board of Directors

Once the Georgia Corporations Division approves the Articles of Organization, the Incorporator must issue the first resolution of the newly formed company to appoint the first directors who will remain in office until the first annual shareholders' meeting, where the new members of the board of directors will be elected.

During the first board of directors' meeting, the directors must, among other things:

• Appoint the company's Officers
• Elect the Chairman of the Board
• Adopt the corporate bylaws
• Choose a bank to open the company's bank account
• Authorize the issuance of shares up to the number of authorized shares as per the Articles of Organization
• Establish or confirm the fiscal year, and
• Decide on the accounting system to adopt, whether cash or accrual.

Newly established companies in Georgia, both LLCs and Corporations, must file an initial administrative report with the Georgia Corporations Division within the first 90 days from the date of incorporation. Subsequently, the updated administrative report must be submitted every year between January 1 and April 1, for both companies and LLCs.

Corporate Taxation in Georgia

The tax for corporate income in Georgia occurs at a flat rate of 5.75%.

The sales tax in Georgia is 4.00%, to which a maximum local surtax of 5% may be added. In 2022, the average sales tax rate in Georgia was 7.4% [average combined state and local rate].

Capital gains in Georgia are taxed at a flat rate of 5.75%.

There is no estate tax in Georgia.

A Brief Overview of Georgia's State Economy

Georgia's GDP has steadily increased over the years, exceeding $755 billion in 2022. Georgia is home to 8100 manufacturing companies with 476170 employees [data 2022]. Georgia's largest industries, Electrical, Automotive, Aerospace, and Food Productions, represent almost 75% of new jobs and 84% of total investments.

The main industrial sectors of Georgia include:

• Aerospace,
• Automotive,
• Chemical
• Electric sector applications
• Food production
• IT 
• Metal processing
• Digital media

Atlanta is the largest industrial city in Georgia, followed by Dalton, Savannah, Gainesville, Marietta, Alpharetta, and Columbus. Prominent companies headquartered and operating in Georgia include:

• Gulfstream Aerospace Corp.
• Lockheed Martin Aeronautics Co.
• The Coca-Cola Co.
• Mohawk Industries, Inc.
• Georgia-Pacific, LLC
• Kia Motors Manufacturing Georgia, Inc.
• Tyson Foods, Inc.
• Toyo Tire North America Manufacturing, Inc.
• Blue Bird Corp.
• GE Power Electronics, Inc.

This page refers to companies opening in the American state of Georgia. In other words, the state whose capital is the city of Atlanta and which is located in the United States.