Small Business Checklist for New Georgia Incorporations
Navigating through the maze of recommendations and requirements for newly incorporated small businesses is a real challenge. There are requirements from the Internal Revenue Service, the state of Georgia, the county the new business is in, such as Fulton or Gwinnett, and even the city, if the business is located in the city limits.
This process is never simple. However, to make it easier, we have compiled a list of common activities that new companies should do, along with some information on how and why to do it. If you have any questions about these matters, please feel free to contact us.
Initial Business Registration Tasks
Obtain a Federal Tax ID Number
Similar to a Social Security Number, a Federal Tax ID number identifies your business to the Internal Revenue Service. It’s sometimes known as an Employer Identification Number, since this number is also used when you withhold taxes from your employees. You’ll also need this number to open a bank account. You can obtain a federal tax number by completing IRS from SS-4. Georgia business owners should obtain a Georgia withholding number by registering with the Georgia Department of Labor.
Decide if You Want to be a Chapter S Corporation
Your business can be incorporated either as a traditional Georgia Chapter C corporation, or as a Georgia Chapter S Corporation. For many businesses with a small number of shareholders that do not expect to sell stock to the public, the Chapter S election can reduce paperwork, and save money. A Chapter C corporation pays its own taxes, and returns earnings to its shareholders through dividends. A Chapter S corporation does not pay income taxes; these are paid on the shareholders’ personal tax returns. There are additional benefits to being an S Corp as well.
By default, your new company will be a C corporation. If you want to make an S corporation election, you must do so within 75 days of doing business, issuing shares of stock, or acquiring any assets. Filing IRS Form 2553 makes this election. You can find out more about the requirements in the IRS Form 2553 Instructions.
Open A Bank Account
Soon after forming your company, you will want to open a corporate bank account. You will need you tax identification number in order to do this. Having a separate bank account for company business is extremely important. Because you and your business are now two separate entities, if you mix personal and company finances, it becomes extremely difficult to determine whether cash was spent by you or the corporation.
Hold Your Corporation’s Organizational Meeting
Each new corporation must hold an organizational meeting of its shareholders to elect officers and approve its bylaws. The results of this meeting should be recorded in the company’s minutes book. You need to hold a meeting even if you are the sole shareholder in your new corporation. The meeting should be held prior to entering into any contracts, or conducting business.
Obtain a City or County Business License
Sometimes called an Occupation Tax, a business license should be obtained from the county or city in which your office is located. If you primarily work out of your home, then obtain the license in your home county. You can find out the proper procedure for doing this by calling your city hall or county courthouse. For example, in Gwinnett County, you obtain your business license in person at the Licensing and Revenue Department at the County Annex building on South Perry Street in Lawrenceville.
If you are located in the city limits of a town you should obtain your business license from the municipality in which your business operates. For those in Atlanta you can get your license by contacting the City of Atlanta Business Tax Division, 55 Trinity Avenue, SW, Suite 1350, Atlanta, GA 30335-0317 or by calling them direct at 404-330-6270. For those living in Lawrenceville please visit the licensing office at their office at 70 S. Clayton Street, Lawrenceville, GA 30045 or by phone at 770-963-2414. If you live within the city limits of Duluth please contact City Hall at 3578 West Lawrenceville Street, Duluth, GA 30096 with their phone being 770-476-3434.
Please note that many cities and municipalities allow for the registration forms to be down loaded on-line. Generally licenses have a basic underlying fee which then fluctuates based upon your projected sales levels.
Get Your Georgia State Taxpayer ID Number
You will need a Georgia State Taxpayer ID Number to pay your Georgia Income Tax and Net Worth Tax obligations. If you do this online, you may also get a provisional Federal ID number at the same time. Get started at the Georgia Tax Registration Gateway.
Obtain a Georgia Sales and Use Tax ID Number
If you will be selling goods at retail, you will need to collect Georgia state sales tax, and any local sales taxes. The Georgia Department of Revenue will issue this tax ID, and provide information about the sales and use taxes you should be collecting. Learn more at the Sales and Use Tax website.
The preceding list includes most of the initial registrations and forms you will need to file as a new corporation. Depending on the type of business you run, there may be additional registrations and forms, including registering a trade name or trademark, if you use one; or acquiring special licenses (for example, a health department permit if your business will serve food).
If your business will have any employees, you will need to complete additional registration forms. Find out more about these requirements in our Hiring Employees in Georgia checklist.
HIS CPA, Inc. has helped many new businesses through the maze if incorporation and making sure that all the correct forms and registrations are completed in a timely manner. We would be happy to assist you with the process as well. Feel free to contact us for more information.
His CPA PC (A Christian CPA Firm) Offers Free Initial Consultations/Interviews offering:
- Atlanta Virtual/Part-time CFO
- Advice on Incorporating in Georgia & Entity Selection
- Atlanta Business Startups, Financial Management & Tax Preparation
- Atlanta Corporate & Personal Income Taxes