Georgia LLC Advantages Disadvantages

Georgia LLC Advantages Disadvantages

Should I form a Georgia LLC?

A Georgia LLC satisfies a necessary condition of your business planning developement in that it meets the requirement that you establish a legal form of organization in order to gain the statutory benefits and protection available in Georgia to your LLC. Your Georgia LLC establishes a legal presence within the state, which you can use either as a platform for in-state operations or by registering your Georgia LLC via your agent's physical address in order to meet the purely statutory requirement for tax and filing purposes absent an in state operation.

Georgia LLC Advantages 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.

Georgia LLC Advantages Disadvantages

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 Corporation Advantages Disadvantages

Georgia's 2012 Business Tax Climate Ranks 34th

Georgia ranks 34th in the Tax 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 rank as follows: Tennessee (14th), Alabama (20th), Florida (5th), South Carolina (36th) and North Carolina (44th).

Tax Freedom Day Arrives on April 3 in Georgia

Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2011, Georgia taxpayers work until April 3 to pay their total tax bill, ranking them 37th nationally. That's nine before national Tax Freedom Day (April 12). The Tax Freedom Days of neighboring states are: Tennessee, March 27 (ranked 49th nationally); Alabama, April 2 (ranked 43rd nationally); Florida, April 11 (ranked 16th nationally); South Carolina, March 29 (ranked 48th nationally); and North Carolina, April 6 (ranked 27th nationally).

Georgia's State and Local Tax Burden Below National Average

Georgia's 2009 state and local tax burden of 9.1% of income is below the national average of 9.8%. Georgia's tax burden has decreased overall from 9.3% (33rd nationally) in 1977 to 9.1% (31st nationally) in 2009. Georgia taxpayers pay $3,350 per capita in state and local taxes.

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 23rd highest among states levying an individual income tax. In 2008, state-level individual income tax collections were $920 per person, which ranked 23rd 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 35th highest. In 2008, state-level corporate tax collections (excluding local taxes) were $98 per capita, ranked 41st highest nationally.


Tax Foundation

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