Accounting News and Notes » Georgia Entity Selection

Atlanta/Gwinnett/North Fulton CPA Advises on Incorporating Your New Georgia Business

John Dillard — Tue, 23 Mar 2010 13:55:35 +0000

Atlanta/Gwinnett/North Fulton CPA Advises on Incorporating Your New Georgia Business

Incorporating Your Business: Understanding and Properly Utilizing Georgia Entity Selection

Your initial choice of entity is perhaps the most important tax, financial and legal decision you might ever reach. Being well versed in these areas is essential to a wise and prudent decision. Carefully considering the tax effects of your entity choice is essential to getting your business off on the right foot. Being careful to avoid, if at all possible, the double taxation of C Corporations and then selecting the right entity for your business from both a tax and legal perspective is critical. Understanding many of the basics of the start of the incorporation process will do much to ensure that you are well-versed and able to make wise and informed decisions. Below is a sample inquiry we might receive from an entrepreneur who is looking to set up/incorporate a new business:

We are planning to start a new business. We are not sure where we will need to incorporate our business. Can you provide advice as to which state would be most favorable overall, in terms of taxes, for starting a business? Although we have not chosen the type of entity yet, it will probably be an S Corporation. And do you provide accounting services for that state? Thank you for your time.

Below is my response:

Thanks for visiting www.HisCPA.com Please take read and review the below article and then give me a call so we might discuss. I would be happy to help you with your new venture. Keep in mind you will want to incorporate in all states where you transact business. I look forward to your call. Cheers, John Dillard CPA, 770 814 9304

Understanding the basics of where and when to incorporate your business in Georgia will provide you with needed insight to avoid unnecessary pitfalls, fees, and legal issues that befall many as a result of their failure to have a rudimentary understanding of the issues. There is a lot of hype out there about where to incorporate that may well lead you to discover that the steps you made to protect your Georgia business while in good faith, have caused complexities that hurt rather than help your business. In general there are several criteria to evaluate when considering where to originally incorporate/domicile your business. All the criteria should be looked at in aggregation to consider including:

Base Business Operations – Where your business actually earns money and produces income is a critical component to consider in determining where your business should legally domicile and register. For example if your headquarters is in Georgia, you would incorporate in Georgia absent any other substantive issues. Then if your business transacts business operations in other states you would want to consider registering your corporation as a foreign corporation in another state. This designation does not register you as a foreign corporation to the U.S. but to the state where you are transacting business and have substantive business operations.

Where Are Your Workers – For all states where you have employees you will want to be sure to register and incorporate in those states whether you have an office in that state or solely have employees who work out of their homes in those states. Accordingly, if you have employees in Georgia, you will want to be sure that you comply with all Georgia payroll taxes.

Physical Offices/Plants – For all locations that your business has a physical location and on-going physical presence, you will want to register your corporation as doing business in that state. Having a sound risk management plan is an integral part of the incorporation/registration process and is tantamount in making wise and informed decisions. For example, if your business headquarters and management are local, you will most likely want to incorporate the business in Georgia.

Working with your CPA and attorney on these issues before you incorporate is your best defense to ensure that you make wise and informed incorporation and registration decisions so contact us today.

Serving Lawrenceville/Snellville/Norcross/Roswell as an Award Winning CPA for Decades

http://www.hiscpa.com/article3.html Gwinnett/Duluth CPA Teaches Personnel Keys to Managing Business Growth
http://www.hiscpa.com/article6.html Alpharetta/Roswell CPA Teaches the Tax Effects of Entity Choice
http://www.hiscpa.com/marketing-efforts.html Norcross/Sandy Springs CPA on Tracking Marketing Statistics for Your Georgia Business

And this is only some of the information available on our web site. You also have at our blog a host of other varied and timely tax and business management issues you can use.

John Dillard, CPA of His CPA, PC (An Atlanta Christian CPA firm) 1940 Woods River Lane, Duluth, GA 30097 Phone 770-814-9304 http://www.hiscpa.com/ http://www.john-dillard.com/ To retain John Dillard CPA (An Atlanta Christian Speaker/Author) for your business group or church congregation, you can contact him today at 770.814.9304

Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Business Acquisitions/Sales, Forensic Accounting, Business Valuations and Bookkeeping.

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Atlanta CPA Teaches Incorporating in Georgia

John Dillard — Fri, 02 Oct 2009 15:25:01 +0000

Atlanta CPA Teaches Incorporating in Georgia

Incorporating Your Business” Choosing a Business Entity Type

There are many reasons a taxpayer may look to incorporate their business ranging from legitimacy, liability limitation and tax mitigation. Understanding these many nuances is your best first step in ensuring that you chose an entity type is best achieving success given your business model and operations. Entity selection is determinant on many issues ranging from citizenship, number of shareholders, ease of operation, tax obligations and year-end filings and even who your shareholders will be. Though many of these issues will conflict, working with a professional who is well versed in these issues will help you make the best election available for your new Georgia Business.

Choosing an Entity Type
Your initial choice of entity is perhaps the most important tax, financial and legal decision you might ever reach. Being well versed in these areas is essential to a wise and prudent decision. Visit http://www.hiscpa.com/article2.html

Tax Effects of Entity Choice
Carefully considering the tax effects of your entity choice is essential to getting your business off on the right foot. Being careful to avoid, if at all possible, the double taxation of C Corporations and then selecting the right entity for your business from both a tax and legal perspective is critical. See http://www.hiscpa.com/article6.html

Getting Started
Understanding many of the basics of the start of the incorporation process will do much to ensure that you are well-versed and able to make wise and informed decisions. As these issues will affect your business operations and finances during the lifetime of your business they are essential to getting started well. See http://www.hiscpa.com/incorporating-guide.html

Determining Where to Incorporate
The decision of where to incorporate your business is a critical component of getting your business started. Learn what you need to know to make a well-informed decision. Visit http://www.hiscpa.com/incorporating-articles.html

New Corporation Forms and Registrations Checklist
Whether you are just incorporating or have been in business for years. This summary will enable you to quickly locate the forms and guidance you need to ensure your business maintains tax compliance. To learn more visit http://www.hiscpa.com/checklist.htm

Incorporating Your Leadership
Knowing who will lead your business, their morals, beliefs and work ethic are essential to success in your new business venture. Determining who should be at the helm and who should follow will do much to avoid needless delays and time lost in aimless decision making. Visit http://www.hiscpa.com/business-leadership.html

Incorporating the Details
Learning the basics of incorporation will do much to ensure that you do not make a costly mistake. Discovering the details of what all is involved in your new Georgia business will much to ensure you avoid costly mistakes and blunders. To learn more visit http://www.hiscpa.com/incorporating-details.html

At His CPA, PC we strive to be much more than just tax preparers, put our partner to work for you today to see how much enlightened business leadership can mean to your business success.

To learn more about tax entities and the taxation thereof visit http://www.hiscpa.com/article2.html There you will also discover a wide host of resources for Atlanta Entrepreneurs.

John Dillard is an Christian Speaker/Author and Certified Public Accountant in Duluth, GA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!

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Atlanta CPA Teaches Understanding the Incorporation Process of Your Georgia Based Business

John Dillard — Tue, 29 Sep 2009 18:09:23 +0000

Atlanta CPA Teaches Understanding the Incorporation Process of Your Georgia Based Business

So you have started a new business and now need tax advice to take your business to the next level and to ensure that you set up as the correct/best legal entity type for your new Georgia business. Choosing to incorporate your business as a corporation will do much to protect your personal assets from legal liability issues while potentially shrinking your overall year-end tax obligation while also providing benefits for yourself, as well as your employees. We are here to serve you as you make this important decision. Over the decades we have helped thousands pursue the dream of owning their own business and helping them understand and utilize the entity choice that is best-suited for their business.

Incorporating in Georgia

Incorporating in Georgia requires that you file for the company Articles of Incorporation with the Georgia Secretary of State’s Office. Corporations should also be sure to prepare a legal posting/announcement for the legally authorized newspaper in the county’s paper, establishing bylaws, election a Board of Directors, Officers and the issuance of stock.

Georgia Entity Requirements

Georgia law requires that you essentially disclose that entity type your business is as part of the name of the business such as adding to the end of your business name one of the below entity types. These names acknowledge to the public what entity type you have selected and for identification purposes with the GA Secretary of State. Types include:

Incorporated

Company

Inc.

LLC

LLP

Selecting a Name for your Georgia Business

Georgia law requires you to select a corporate/business name that is easily distinguishable from other names so that the public will be able to readily identify and recognize businesses from other companies.

Establishment of an Incorporator

Georgia law requires that as a business legally registering to transact business in the state have a named incorporator who is responsible for all of the initial incorporating paperwork. A company’s Articles of Incorporation should be included in the initial paperwork filed with the Secretary of State’s Office with the initial filing fees.

Corporate Directives/Setting up Your Corporate Bylaws

Over the years of serving Georgia business owners have often struggled with “what’s next” in the establishment and setting up of their new business. To help clarify and assist owner in addressing these issues we work with taxpayers be providing the below Incorporating Checklist:

This is to confirm that we went over the rules of being an S Corporation and that you have opted to become same. You are aware of the need to have an annual Board of Directors, Officers, and Shareholder’s Minutes meetings and that each year you should pay the annual fee with the Secretary of State’s Office to renew your corporations annual registration.

Please be aware that you need to get a business license and always list your corporate title when signing any agreement and conduct all corporate business in the corporate name.

In your corporate book you will find several forms: Employee forms – W-4, G-4, and I-9 and independent contractor forms W-9. After they complete these forms, you should keep these in their permanent files. There is also information on the Georgia New Hire Reporting Act and forms relative to that information. You are aware of the need to pay a reasonable salary and that you are going to retain a payroll service for your entire payroll and 1099 needs. Please be reminded that as long as you pay yourself a reasonable salary, you may also pay yourself shareholder distributions, which are devoid of FICA and Medicaid taxes. Per your advice you will not be required to file sales tax reports.

The following are recommendations to better manage your business:Turn in a monthly expense report to the business and keep a daily log to track and support business miles.I suggest we tax plan twice every year. Your corporate returns are due March 15^th of each year.You will need to trademark your business name to ensure that the name will always be yours.

Please forward a copy of your last year personal return along with a copy of the S Corporation acceptance, when it is received.

To learn more about tax entities and the taxation thereof visit http://www.hiscpa.com/article2.html There you will also discover a wide host of resources for Atlanta Entrepreneurs.

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock, Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.

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Gwinnett CPA Teaches Understanging How Incorporating Your Georgia Business Can Affect Your Taxes and Liabilities

John Dillard — Tue, 29 Sep 2009 17:47:22 +0000

Gwinnett CPA Teaches Understanging How Incorporating Your Georgia Business Can Affect Your Taxes and Liabilities

Choosing an Entity Type

Tax Effects of Entity Choice

Carefully considering the tax effects of your entity choice is essential to getting your business off on the right foot. Being careful to avoid, if at all possible, the double taxation of C Corporations and then selecting the right entity for your business from both a tax and legal perspective is critical. To discover how entity choice and affect you see http://www.hiscpa.com/article6.html

Getting Started

Understanding many of the basics of the start of the incorporation process will do much to ensure that you are well-versed and able to make wise and informed decisions. As these issues will affect your business operations and finances during the lifetime of your business they are essential to getting started well.

Contact HIS CPA PC (A Christian CPA Firm) today.

To learn more about addressing IRS Tax Issues and Back Tax Returns visit http://www.hiscpa.com/working-with-the-irs.html

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Duluth CPA Illustrates Addressing S Corporation Status for a Georgia S Corporation

John Dillard — Fri, 18 Sep 2009 17:27:13 +0000

Duluth CPA Illustrates Addressing S Corporation Status with the IRS for a Georgia S Corporation

Determining Your Entity Type Will Affect Both Your Tax Bill and the Way You Operate

Frequently we are asked to follow-up after either a taxpayer or a prior accountant has filed a return in error to fix a prior misstatement or filing. Below is a sample letter one might use if you had inadvertently filed as a C Corporation when the business was an S Corporation and should have filed as a flow-through entity or an IRS Form 1120S:

IRS
Atlanta, GA 39901

Dear Sir or Madam

I am writing to follow up on your IRS Letter dated 10-10-09 (copy enclosed). Please note I have enclosed a copy of the S Corporation return, as well as the S Corporation acceptance effective 1-1-09. Please note the company was not a C Corporation for the tax year noted in the enclosed tax notice and accordingly should and should not file a Form 1120 for 2009. Accordingly the tax monies assessed in the attached notice are incorrect as the company was an S Corporation for the 2009 tax year, as further reflected on the enclosed Form 1120S. If there had been a previously filed Form 1120 for 2009 for the company, please void it as it is invalid. Please fix your records accordingly to show that the client was an S Corporation for the tax year in question.

Accordingly please refund any monies previously paid.

I appreciate your attention to this matter and please do not hesitate to contact me should you have any questions.

Very Sincerely Yours, John C. Dillard, CPA, President

When looking at what type of entity your business should be, we strive to balance the legal protection issues vs. the tax savings. Over the years, we have developed the mindset that there is no perfect election but there are ones that are better than others. To read more visit http://www.hiscpa.com/article2.html

Contact HIS CPA PC (A Christian CPA Firm) today.

To learn more about addressing IRS Tax Issues and Back Tax Returns visit http://www.hiscpa.com/working-with-the-irs.html

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Atlanta CPA on C Corprations…How to Avoid Double Taxation

John Dillard — Mon, 19 Jan 2009 17:18:55 +0000

Atlanta CPA on C Corprations…How to Avoid Double Taxation

This type of corporation is perfectly set up for those to whom do not qualify to be an S Corporation, such as a public held company that has thousands of shareholders, lots of classes to stocks, and sells its stock to anyone (corporations, individuals, retirement plans, etc).

Taxation of C Corporations

A C Corporation pays taxes on all its profits first at the corporate level and then when the dollars are paid out to the owners in subsequent years, the owners pay tax again at the individual level. C Corporations, therefore, are exposed to a “double taxation” that none of the other entity types are exposed to. If you think taxes are bad enough paying them once, try paying them twice. OUCH!

Converting from a C to an S Corporation

A C Corporation can make a timely tax election to become an S Corporation and start taking advantage of tax advantages of being an S Corporation. Care should be taken to ensure that all shareholders understand and agree to become an S Corporation and that there are no or relatively insignificant net operating losses that might still be utilizable if you were to stay a C Corporation. Then after these are utilized/considered, we would effect the change.

To read more and see which entity type is best for you visit http://www.hiscpa.com/article2.html

We serve clients that are located in Atlanta GA, Gwinnett County, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, and Beyond.

John Dillard CPA of His CPA PC (a Christian CPA firm) is an author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey visit http://www.john-dillard.com/

“Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!”

(Proudly Serving Alpharetta & Roswell for Over Twenty Years)

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Atlanta CPA on LLC’s, LLP’s, and Partnerships…A Flow Through Entites Menu

John Dillard — Mon, 19 Jan 2009 17:17:29 +0000

Atlanta CPA on LLC’s, LLP’s, and Partnerships…A Flow Through Entites Menu

Limited Liability Corporations (LLCs), Limited Liability Partnerships (LLPs) and General Partnerships are all taxed in the same manner. Choosing one of these types as a business entity would be a poor selection for a business such as a distribution business, as they will all result in higher taxes with no additional advantages for the distributor.

Generally a business which is an LLC, LLP, or Partnership will pay higher taxes with no additional advantages as opposed to being an S Corporation. A Limited Partnership is also an option that could be explored when certain partners want to limit their liability and exposure.

Below are some of the reasons you might want select an LLC or LLP as your entity choice:

If you were a lawyer or physician’s practice then all of the partners’ personal assets are at risk if one partner does something wrong, while if an LLC or an LLP, only the offending partners personal assets would be at risk. This is because of the professional service statutes for these type of professionals, but these rules do not relate to a distribution business, for example.
If you were an real estate developer and you had a piece of land that had dramatically increased in value, you can transfer that property to an LLC, LLP, or Partnership without having to pay any capital gains tax. Also with these entity types, you can take shareholder distributions that are not based upon ownership, whereas in an S or a C Corporation they have to be. Again, this does not relate to a distributor.

If you have set up as one of these entity types, it might be advantageous to consider a tax-free merger into an S Corporation which will allow you to retain all the legal contracts, etc. of your present entity while switching to the tax advantages of being an S Corporation.

To read more and see which entity type is best for you visit http://www.hiscpa.com/article2.html

“Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!”

(Proudly Serving Alpharetta & Roswell for Over Twenty Years)

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Incorporating in Georgia: Be Sure to Chose the Right Entity For Your Business

John Dillard — Sun, 26 Oct 2008 19:18:21 +0000

Serving Atlanta and Beyond

If you have a new business the first thing you will want to do is to review to see which type of entity works best for your corporation. Both the LLC (Limited Liability Company) and the S Corporation continue to lead the way in being the most popular choice of entity selection in the state of Georgia. There are many options to chose from when choosing the best entity for your business including:

S Corporations. Generally results in the lowest amount of tax for most businesses. Best suited for U.S. citizens or resident aliens who have less than one-hundred shareholders who do not need to be another entity type for operational or liability reasons.

-LLC. Limited Liability Company. Generally these are well suited to real estate development companies, for entities where owners are not U.S. citizens or resident aliens, you have multiple classes of stock, or have over one-hundred shareholders.

-LLP. Limited Liability Partnership. Frequently utilized by multi-practice physicians and dentists who are looking to limit their professional liability from other owners and practitioners.

-Partnerships. These entities can have general or limited liability partners and are also well suited for business whose predominant focus is the investment of real estate dollars or ventures.

-C Corporations. Typically results in the highest of all the tax entity choices as a result of owners having to pay taxes twice (first at the corporate level for any profits and then later for any dollars paid out to stockholder owners).

To review these choices in greater detail please visit our web site at http://www.hiscpa.com/article2.html There on the site you will also find a mathematical example which will further illustrate the nuances and differences in taxes by entity selection.

For those who are just beginning a new business a checklist is often a great way to ensure that you have all of your bases covered. One is available for your use and review at http://www.hiscpa.com/checklist.htm Whether you are a Atlanta business or one in Duluth, GA you will find these articles an invaluable source of information to utilize again and again.

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