Incorporating Tax Questions

If you are just getting started you are probably asking yourself the first question. “Should I incorporate my business?”

“As a Gwinnett CPA for decades we have helped hundreds of Gwinnett business owners select the right entity when incorporating their Georgia business. Contact us today to take advantage of our free initial consultation.”
— John Dillard CPA, President of His CPA: A 30A CPA Firm

This is perhaps the most important financial decision you might ever make when Incorporating your new Georgia business. It is prudent to consult with both a tax professional and a lawyer before making this decision. Factors that will be important to consider will include:

• Liability Protection and Impact
• Tax Issues and How Your New Entity Will Be Taxed
• Capital Needs, Business Plans and Operations

Frequently we get asked “How long will it take to incorporate my new Georgia Business?”

There are many factors and segments to consider when incorporating your Georgia business including filing of the articles of incorporation, doing the legal posting, setting up by laws, nomination of officers and directors, authorization and issuance of stock, just to name a few. It is widely suggested that you have an attorney handle the legal aspects of incorporating as “the devil is in the details.” Be sure you retain competent counsel to get your new business off on the right foot. Typically most Georgia corporations can be done in two to three weeks even during times of heavy processing by the Georgia Secretary of State.

“What are some of the things I need to do after I get my new business Georgia incorporated?”

Each year you will need to file an annual registration to keep your corporation registered with the Secretary of state. The registration is also the vehicle which officers and owners can record changes of address, officers and agents. Georgia corporations have to file the first registration within 90 days of the date of incorporation, and between January 1 and April 1 each following year. Limited liability companies, limited partnerships and foreign corporations file the first registration between January 1 and April 1 of the year following the initial filing, and between January 1 and April 1 each year thereafter.

“Is an out-of-state entity/business required to file with the Georgia Secretary of State?”

Not always. A business incorporated in another state is a “foreign corporation” to Georgia. Georgia law states that a “foreign corporation may not “transact business” in this state until it obtains a certificate of authority from the Secretary of State. It is the responsibility of a corporation to determine whether or not it has to file. As an Atlanta CPA for decades I frequently encourage business owners to be sure to legally register before sanctions are enforced for non-compliance. To help determine if your business would be required under these general guidelines see this page. Any business that determines it should file as a foreign corporation is required to do so within 30 days of commencing business in Georgia.

“What happens if an out-of-state corporation “transacting business in Georgia” doesn’t file with the Secretary of State?”

O.C.G.A. 14-2-1502 (profit) lists the “ramifications of transacting business without legal registration.” If a business corporation should have legally obtained a certificate of authority, but doesn’t, it may not be able to file a lawsuit in the State of Georgia. A profit corporation that begins transacting business in Georgia and later decides it must file with the Corporations Division must pay $500 penalty. Also corporations frequently require business owners to file and pay for several years income tax returns at a time that were previously not filed, resulting in additional tax fines, penalties and interest at both the shareholder/member level as well for “flow through entities” such as S-Corporations, LLC’s and LLP’s.

Be sure you get your new business corporation off on the right foot. Contact us today for a free initial consultation when incorporating your new business in Georgia.