Georgia LLC
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Georgia LLC Advantages and Disadvantages
Advantages of LLC
- Limited Liability: Owners of a LLC have the limited liability protection of a corporation.
- Flexible Profit Distribution: Limited liability companies can select varying forms of distribution of profits. Unlike a common partnership where the split is 50-50, LLC have much more flexibility.
- No Minutes: Corporations are required to keep formal minutes, have meetings, and record resolutions. The LLC business structure requires no corporate minutes or resolutions and is easier to operate.
- Flow Through Taxation: All your business losses, profits, and expenses flow through the company to the individual members. You avoid the double taxation of paying corporate tax and individual tax. Usually, this will be a tax advantage, but circumstances can favor a corporate tax structure.
Disadvantages of LLC
- Limited Life: Corporations can live forever, whereas a LLC is dissolved when a member dies or undergoes bankruptcy.
- Going Public: Business owners with plans to take their company public, or issuing employee shares in the future, may be best served by choosing a corporate business structure.
- Added Complexity: Running a sole-proprietorship or partnership will have less paperwork and complexity. A LLC may federally be classified as a sole-proprietorship, partnership, or corporation for tax purposes. Classification can be selected or a default may apply.
By Georgia and other state law in order to proceed with forming a llc, you need to prepare a written abstract detailing your llc purpose, the names of your initial Georgia LLC members, the name and address of your Georgia registered agent, the details of which will be introduced into the body of your LLC operating agreement and related Georgia LLC formation documents assembled for application to the state of Georgia.
Georgia's 2009 Business Tax Climate Ranks 27th
Georgia ranks 27th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: Tennessee (17th), Alabama (21st), Florida (5th), South Carolina (25th) and North Carolina (39th).Georgia's Individual Income Tax System
Georgia's personal income tax system consists of six separate brackets with a top rate of 6% kicking in at an income level of $7,000. That top rate ranks 21st highest among states levying an individual income tax. In 2006, individual income tax collections were $872 per person, which ranked 24th highest nationally.Georgia's Corporate Income Tax System
Georgia's corporate tax structure consists of a flat rate of 6% on all corporate income. Among states levying corporate income taxes, Georgia's top rate ranks 36th highest. In 2007, state-level corporate tax collections (excluding local taxes) were $108 per capita, ranked 41st highest nationally.Georgia's State/Local Tax Burden Slightly Above National Average
Estimated at 9.9% of income, Georgia's state/local tax burden percentage ranks 16th highest, slightly above the national average of 9.7%. Georgia taxpayers pay $3,735 per capita in state and local taxes. Since 1977, Georgia has risen 20 places in the rankings.Home | Georgia LLC Advantages and Disadvantages | Site-Map