Georgia offers a reasonable business environment for larger corporations, but can be a burden on small business owners. Georgia has a 6% flat corporate income tax and a 4% state sales tax, but regressive local sales taxes raise the overall sales tax rate to as much as 8%. A weak education system, resulting in embarassingly low SAT scores, makes it difficult for small business owners to compete and reduces the overall appeal of doing business in the State.
DIY Georgia Startup Guide
A business registration is more than just creating an official name for your business. Your business registration serves to identify the type of business formation, that is, the form of legal entity that was created.
When you incorporate, form a partnership, or create a cooperative organization, you are establishing a separate legal body that will be taxed as an independent entity. Often, new business owners do incorporate, but it's not essential for all businesses to do so.
Many small businesses can operate for years without ever needing to establish an indedpendent tax identification. The State of Georgia uses the term "Trade Name" in reference to IRS "disregarded entity type" businesses. Georgia requires Trade Name registrations to be filed with the County Clerk of the Superior Court. Registration fees can total more than $200.00. Forms may be downloaded in PDF format from your local County Clerk website.
Federal Employer Identification Number (EIN)
As a sole proprietor operating a Fictitious Name business, there is no legal requirement for your business to obtain a Federal EIN. However, there is also nothing to prevent you from doing so. Many small business owners obtain an EIN so they can maintain a separate bank account for their business.
Whether required or voluntary, the EIN application process is the same. The IRS provides applicants with several application methods, including online, by phone, fax or mail. Online and phone applications are completed and approved immediately if no additional information is required. Fax and mailed EIN applications are processed on a first come-first serve basis and can take up to four weeks to process.
Business and Trade Licensing
If your business will be providing any of a broad range of professional or trades services, you may also need to obtain a license and register through the Georgia Secretary of State Professional Licensing Boards Division.
County and Local Licensing
Many communities and trading areas also require some form of registration for tax purposes and to ensure the business is operating from a properly zoned location. Contact authorities within your local community for more information.
Creating a Business Plan
Before you do anything else, be sure to to create a business plan. For a small business, keep the plan simple. Most new business owners only need a list of the startup costs and monthly expenses balanced against anticipated income.
For a small business, the point of a business plan is to be sure you have enough money to survive the startup period because, while it will typically take a while for your income to rise as high as it was before you started the business, your personal bills will remain the same.
The question your business plan is supposed to answer is, whether your business income will grow fast enough to cover your bills before you run out of money. Don't be realistic, be pessimistic. It's better to plan for a worst case scenario and do better than expected, than having the opposite happen.
Financial & Legal Guidance
The State of Georgia offers several types of business formation. Each type provides benefits and detriments. The idea is to align your needs to the type of legal business entity that is best. To accomplish that, it's important to seek professional assistance.
Your choice of business formation is a serious legal matter that demands professional guidance. It is always advisable to consult both a lawyer and a certified public accountant before making your decision.