How to Form a C Corporation in Georgia
Introduction
Congratulations on taking the first step toward forming a corporation! Forming a C corporation can be a great way to protect your personal assets and make sure you get the tax breaks that come with being a business owner. In order to form a C corporation, you will need to follow these steps: Select a name for your business; Register your business name with the state of Georgia; File Articles of Incorporation with the Georgia Secretary of State; Find an agent for service of process; Obtain Certificate of Authority from the IRS (if required); Hold first meeting of board and approve corporate bylaws; Appoint officers and issue stock certificates. Let’s go through each one in more detail!
Choose a Name
There are several factors to consider when choosing a corporate name. First, make sure it’s not already taken by someone else. Next, make sure it’s short and easy to spell (you don’t want your customers having to ask for too many details). Finally, try not to choose a name that is too similar or close in sound or spelling to another company’s name; this could be seen as confusing and may infringe upon their trademark rights.
Register Your Business Name
When choosing a business name, you need to make sure that it’s easy to remember and unique enough so that it doesn’t conflict with any other businesses within your state. It’s also important not pick a name that is similar to one used by a government agency or another corporation.
The good news is, anyone can do this step! Once you have chosen a business name and are ready to register it with the Secretary of State (SS) office, we’ll walk through the process step-by-step in our next section below.
File Your Articles of Incorporation
Once you’re ready to form your corporation, you’ll need to submit a few documents to the Georgia Secretary of State. You can either file these documents online or by mail. The first document is called “Articles of Incorporation.” This is basically your new company’s birth certificate, so it needs to include information like:
- Name of the corporation
- Purpose of the corporation (what business activities will it be involved in?)
You’ll also have to pay a $50 filing fee per each article filed with the Secretary of State.
Find a Registered Agent
A registered agent is a person or company who is authorized to accept legal papers on behalf of a corporation. It’s important to have a registered agent in case the corporation is sued or files a lawsuit. A registered agent can be an individual or a company.
File Your Statement of Foreign Corporation
You’ll need to file a Statement of Foreign Corporation with the Georgia Secretary of State [link]. The form is available online, and it must be filed within 90 days of the corporation’s creation. The statement must be filed by the corporation’s registered agent.
Get Your Certificate of Authority
Your next step is to get a Certificate of Authority from the secretary of state. This document, also called a corporate charter, will confirm that your business is a legal entity and allow you to file taxes as a corporation in Georgia. To obtain this certificate, you must submit an application for your corporation along with $100 and other documents like:
- Articles of Incorporation or a Certificate of Formation (if applicable)
- The names and addresses of all directors and officers (including the name and address of at least one officer who resides in Georgia)
- A list identifying each shareholder owning 10 percent or more shares in the company
Once approved by the secretary of state, your certificate will be issued within 2-3 weeks. You’ll need to renew this document every year by submitting additional paperwork; however, once approved it will last indefinitely unless revoked by law enforcement officials or other agencies like IRS audits due to noncompliance with tax laws
Hold Your First Meeting of the Board of Directors
Attending the first meeting of your corporation’s board of directors is a major milestone in the life of a business. The meeting will be held at the registered agent’s address or office, and it’s important to know what to expect from this gathering.
Holding Your First Board Meeting
The board’s first order of business will be to appoint an officer for the corporation. This person is responsible for keeping records, paying taxes and fees, submitting annual reports, issuing stock certificates (if there are any), maintaining corporate seals and other items required by state law. If there are more than one owner in this position—which means they own more than 50 percent of all shares—they will have equal voting rights at board meetings. To quickly summarize: if you’re just starting out with a C-corp company, you’ll likely find yourself sitting on the board as well as holding an officer position within this group until such time that another investor comes along who buys enough stock (or parts thereof) so that their ownership percentage exceeds yours by at least 50 percent; then they take over your role as head honcho with voting power while retaining your job responsibilities (such as paying taxes).
Approve Bylaws and Create Corporate Kits
Now that you’ve decided to form a corporation, it’s time to take some steps to be sure you get everything right. A corporate kit is an essential tool for running your business, and bylaws are the important document that spells out how your company will operate.
When creating bylaws, make sure they include:
- Management structure – Who will have control over day-to-day operations?
- Voting rights – Who has the power to vote on important decisions?
- Members – Who can become members of your LLC?
Appoint Officers and Issue Stock Certificates
The corporation needs to appoint officers, who are responsible for signing documents on behalf of the company. As a general rule, you don’t have to have any officers at all, but it’s useful if you ever decide to hire employees or delegate authority in the future. The officers should be named in the Articles of Incorporation and include:
- President/Chairman of the Board
- Secretary/Treasurer (or both)
- Other officer(s), if desired
If you want your company’s certificate holder(s) (the person(s) who hold its shares) listed on its stock certificates as “John Doe” or “Jane Smith,” then go right ahead; otherwise, you can get fancy with titles like “Vice President” or simply list their names in full. If there are multiple owners and they each hold an equal number of shares—for example, two partners who each own 50 percent—then one option is for each owner to receive one certificate representing half of his share interest (for example: 50% John Doe /50% Jane Smith). If there are multiple owners with unequal ownership interests—for example, a husband owning 75 percent and his wife owning 25 percent—then another option is for each owner’s name or initials appear on two separate certificates representing those respective percentages; these could be placed together side-by-side into an envelope along with other paperwork related to transferability rights associated with that specific class shareholder interest (“Class A” refers here).
Takeaway.
You’ve probably heard of a C corporation, but what exactly is it? A C corporation is a business entity that’s separate from the people who own it. It can only be owned by shareholders and has its own legal identity as an entity. This means that profits are taxed at the corporate level instead of being taxed at your individual level. There are also some disadvantages to forming a C corporation in Georgia: you must keep strict records and file annual reports with both your state and federal governments, as well as pay taxes on any dividends or distributions you receive from the company. Additionally, if your company goes bankrupt, creditors may have access to personal assets held by shareholders such as their homes or cars. However, forming a C corporation in Georgia does have many advantages over other business structures like LLCs or S corporations: they offer limited liability status (meaning you can’t be sued for personal debts), allow for more investors than other small business structures allow (for example five individuals), offer greater flexibility when structuring ownership percentages among owners/shareholders; this makes them ideal for businesses with multiple owners/shareholders who want a larger stake but don’t want to make all decisions together; they’re also great if seeking investment capital from venture capitalists because these entities typically prefer investing in corporations rather than LLCs due to their tax structure benefits
Conclusion
Once you have completed all of the above steps, you will have a C corporation in Georgia. Congratulations!
