🍑 How to Form a Georgia Corporation

Requirements (O.C.G.A. § 14-2-401):

• Must be distinguishable from existing Georgia entities
• Must contain "Corporation," "Incorporated," "Company," "Limited," or abbreviation ("Corp.," "Inc.," "Co.," "Ltd.")
• Cannot contain restricted words ("bank," "insurance," "university") without approval
• Cannot imply governmental affiliation

Name Availability Check:

• Search: Georgia Secretary of State Business Search
• Reserve name (optional): $25 fee, holds name for 30 days
• Check federal trademarks: USPTO TESS

Requirements (O.C.G.A. § 14-2-501):

• Must have a physical Georgia street address (no P.O. boxes)
• Must be available during normal business hours (9am-5pm)
• Can be an individual Georgia resident or registered agent company
• Receives legal documents, service of process, official correspondence

Filing Method:

• Online (Recommended): Georgia eCorp System - Fastest (7-10 business days)
• Mail: Georgia Secretary of State, Corporations Division, 2 MLK Jr. Drive SE, Suite 313 West Tower, Atlanta, GA 30334
• Filing Fee: $100

Required Information:

• Corporate name
• Number of shares authorized (no par value required)
• Registered agent name and Georgia street address
• Registered office address (can be same as agent)
• Incorporator name and address (person filing, doesn't have to be shareholder)
• Principal office address (can be out of state)
• Purpose (can be "any lawful purpose")

Not filed with state, but REQUIRED for internal governance.

Bylaws establish rules for corporate operations:

• Shareholder meeting procedures (annual, special)
• Board of Directors composition, election, removal
• Officer roles and duties (President, Secretary, Treasurer)
• Voting requirements (majority, supermajority, unanimous)
• Stock issuance and transfer procedures
• Dividend policies
• Amendment procedures

First board meeting to formally organize the corporation:

• Adopt bylaws
• Elect officers (President, Secretary, Treasurer minimum)
• Authorize issuance of stock
• Adopt corporate seal (optional)
• Select fiscal year and accounting method
• Authorize opening of bank account
• Adopt stock certificate form
• Document in minutes (keep in corporate records)

Formalize ownership by issuing stock certificates:

• Issue stock certificates to initial shareholders
• Receive payment (cash, property, services) for shares
• Document in stock ledger (date, shareholder, shares, price)
• File IRS Form D if securities exemption claimed
• Comply with securities laws (federal and Georgia)

All corporations need an EIN:

• Online (Instant): IRS EIN Online Application
• Cost: Free from IRS
• Required for corporate tax filing, payroll, bank accounts

Georgia Annual Registration (O.C.G.A. § 14-2-1622):

• Due Date: Between January 1 and April 1 each year
• Fee: $50 per year
• First Year: Due the year AFTER incorporation (incorporate in 2025 → first annual registration due by April 1, 2026)
• File: Georgia eCorp System

• Maximum 100 shareholders
• All shareholders must be U.S. citizens or residents (no foreign shareholders)
• Shareholders must be individuals, estates, or certain trusts (no corporate or partnership shareholders)
• Only one class of stock (though voting/non-voting shares allowed)

• Must be a domestic U.S. corporation
• Cannot be a bank, insurance company, or certain financial institutions
• Cannot be a DISC (Domestic International Sales Corporation)

Follow all C-Corporation formation steps (Articles of Incorporation, bylaws, organizational meeting, stock issuance, EIN).

Form 2553: Election by a Small Business Corporation

• Deadline: Must file by March 15 of current year, OR within 2 months and 15 days of incorporation
• Signatures: All shareholders must consent and sign Form 2553
• Filing: Mail or fax to IRS (address on form varies by state)
• Cost: Free
• Download: IRS Form 2553

IRS will send acceptance letter (typically within 60 days). Keep this letter in corporate records.

IRS requires S-Corp shareholders who work in the business to pay themselves a "reasonable salary" subject to payroll taxes. You cannot take all income as distributions to avoid payroll tax.

What is "reasonable"?

• Based on industry standards for your role
• Consider time spent, responsibilities, comparable salaries
• IRS scrutinizes low salaries (e.g., $20K salary + $200K distribution = audit risk)
• Rule of thumb: 60-70% salary, 30-40% distribution (consult tax advisor)

• Run payroll for shareholder-employees (quarterly or monthly)
• Withhold federal income tax, Social Security, Medicare
• Withhold Georgia state income tax
• File Form 941 (quarterly payroll tax) with IRS
• File Georgia Form G-7 (withholding tax)
• Issue W-2 to yourself by January 31

• Federal: Form 1120-S (S-Corp return) - due March 15
• Georgia: Form 600-S (Georgia S-Corp return) - due March 15
• Shareholders: Receive Schedule K-1 showing share of income
• Report K-1 income on personal returns (Form 1040, Georgia Form 500)

• Articles of Incorporation must state: "This corporation is a close corporation" (O.C.G.A. § 14-2-902)
• Maximum 50 shareholders at all times
• Stock certificates must contain conspicuous notice of transfer restrictions
• All shareholders must approve close corporation status (unanimous consent)

Close corporations MUST restrict stock transfers. Common restrictions:

• Right of first refusal: Existing shareholders can buy before outside sale
• Consent requirement: Board or shareholders must approve transfers
• Buy-sell agreements: Corporation or shareholders must purchase upon triggering event (death, divorce, termination)
• Transfer restriction notice must appear on stock certificates

Close corporations can eliminate the board of directors entirely (O.C.G.A. § 14-2-908):

• Shareholders manage corporation directly
• Shareholders have same duties as directors would (fiduciary duty, care, loyalty)
• Must state in Articles: "All corporate powers shall be exercised by the shareholders"
• No annual shareholder meetings required (can operate informally)

Must include:

• "This corporation is a close corporation" (O.C.G.A. § 14-2-902)
• If eliminating board: "All corporate powers shall be exercised by the shareholders"
• Transfer restrictions (or reference to bylaws/shareholder agreement)

Highly recommended (often required) to establish:

• Transfer restrictions and right of first refusal
• Buy-sell provisions (death, disability, retirement, termination)
• Valuation methods for share purchases
• Management responsibilities (if no board)
• Voting requirements and deadlock resolution

Articles of Incorporation must state the corporation's purpose includes creating "general public benefit" or one or more "specific public benefits."

General Public Benefit (O.C.G.A. § 14-2-1801):

• "A material positive impact on society and the environment, taken as a whole"
• Assessed against third-party standard (e.g., B Impact Assessment)

Specific Public Benefit Examples:

• Providing low-income individuals with beneficial products/services
• Promoting economic opportunity beyond job creation
• Protecting or restoring the environment
• Improving human health
• Promoting arts, sciences, or advancement of knowledge
• Increasing flow of capital to entities with public benefit purpose
• Conferring any other particular benefit on society or environment

Must publish annual report to shareholders containing:

• Description of how corporation pursued general/specific public benefit
• Extent to which benefit was created
• Circumstances hindering creation of benefit
• Assessment against third-party standard
• Name of third-party standard used
• Compensation paid to directors/officers
• Statement from each director regarding compliance with benefit purpose

Public Disclosure:

• Report must be publicly available on website OR
• Provided to anyone who requests it (within reasonable time)
• NOT filed with Georgia Secretary of State

Directors must consider:

• Shareholders' interests
• Employees and workforce
• Customers as beneficiaries of general/specific public benefit
• Community and societal factors
• Local and global environment
• Short-term and long-term interests of corporation
• Ability to accomplish general/specific public benefit

Key protection: Directors NOT liable for considering these stakeholders (even if it reduces short-term profits).

Articles of Incorporation must include:

• Statement: "This corporation is a benefit corporation" (O.C.G.A. § 14-2-1802)
• Description of general public benefit and/or specific public benefit(s)
• Standard corporate formation requirements (name, shares, agent, etc.)
• Filing fee: $100 (same as regular corporation)

Select an independent third-party standard for measuring benefit creation:

• B Impact Assessment (most common): Free at B Lab
• GRI Standards: Global Reporting Initiative
• IRIS Metrics: Impact Reporting & Investment Standards
• Standard must be developed by independent entity

Within 120 days of fiscal year end, prepare and publish annual benefit report (described above).

Requirements (O.C.G.A. § 14-3-401):

• Must be distinguishable from existing Georgia entities
• Should contain "Corporation," "Incorporated," "Company," "Limited," or abbreviation
• Cannot use words that imply for-profit purpose ("Company" less common for nonprofits)
• Check availability: GA SOS Search

Filing:

• Form: Georgia Form 227 (Articles of Incorporation - Nonprofit)
• File online: Georgia eCorp
• Fee: $100

Required Information:

• Corporate name
• Purpose: Must state nonprofit purpose (charitable, educational, religious, scientific, literary, etc.)
• Registered agent name and Georgia street address
• Principal office address
• Incorporator name and address
• No members OR member structure: State if nonprofit will have voting members or be member-less (board-controlled)
• Dissolution clause: Assets upon dissolution must go to another nonprofit (required for 501(c)(3))

Nonprofit bylaws establish governance:

• Board of Directors composition, election, removal, terms
• Officer roles (President, Secretary, Treasurer minimum)
• Meeting requirements (annual board meeting, quorum)
• Voting procedures
• Conflict of interest policy (required for 501(c)(3))
• Amendment procedures
• Member rights (if membership nonprofit)

• Adopt bylaws
• Elect initial board of directors
• Elect officers
• Adopt conflict of interest policy
• Authorize EIN application
• Authorize opening bank account
• Document in minutes

All nonprofits need an EIN (even before 501(c)(3) approval):

• Apply online: IRS EIN Application
• Free
• Instant approval
• Needed for bank account and 501(c)(3) application

File IRS Form 1023 or 1023-EZ:

• Form 1023-EZ (Streamlined): $275 fee, for small nonprofits (under $50K annual revenue, under $250K assets)
• Form 1023 (Full): $600 fee, for larger nonprofits or complex situations
• Processing time: 3-12 months
• Apply online: IRS Tax Exempt Application

Required documents:

• Georgia Articles of Incorporation (with 501(c)(3) language)
• Bylaws
• Conflict of interest policy
• Financial projections (3-year budget)
• Description of programs and activities
• Board composition and governance

After receiving 501(c)(3) determination letter:

• Apply for Georgia sales tax exemption: GA DOR Exemptions
• Allows nonprofit to make purchases without paying sales tax
• File Form ST-5 (Application for Sales and Use Tax Certificate of Exemption)

If soliciting donations in Georgia:

• Register with Georgia Secretary of State (Charities Division)
• Form CRF-002 (Charitable Organization Registration)
• Fee: $35/year
• Required if raising over $25,000/year or using paid fundraisers
• Info: GA SOS Charities Division

• Annual Registration: $50/year, due January 1 - April 1
• Charitable Solicitation Renewal: $35/year (if fundraising)

• Form 990 (Annual Return): Due 5 months + 15 days after fiscal year end
• Form 990-N (E-Postcard): If gross receipts under $50,000
• Form 990-EZ: If gross receipts $50K-$200K
• Form 990 (Full): If gross receipts over $200K or assets over $500K
• Penalty: Lose tax-exempt status if fail to file 3 consecutive years

BEFORE filing Articles of Incorporation, obtain approval/certificate from your licensing board:

• Georgia Composite Medical Board (physicians, DOs)
• Georgia Board of Dentistry
• State Bar of Georgia (attorneys)
• Georgia State Board of Accountancy (CPAs)
• Georgia Board of Professional Engineers and Land Surveyors
• Etc. (varies by profession)

Each board has specific requirements for PC formation (some require name approval, certificate of good standing, etc.).

Must include:

• Corporate name ending in "Professional Corporation," "Professional Association," "P.C.," or "P.A."
• Statement: "This corporation is a professional corporation"
• Specific professional service(s) to be rendered
• Statement that all shareholders are licensed to render the professional service
• Certificate/approval from licensing board (attached)
• Filing fee: $100 (same as regular corporation)

All shareholders must be licensed in the profession:

• Cannot have non-licensed shareholders (exception: estates/trusts for brief transition)
• Some professions allow related professions (e.g., medical PC can have MDs, DOs, PAs)
• If shareholder loses license → must sell shares within reasonable time

Bylaws are the internal rules governing your corporation's operations. They are NOT filed with the state but are required under Georgia law (O.C.G.A. § 14-2-206).

Bylaws should include:

• Shareholders: Annual meeting date/location, special meeting procedures, voting rights, quorum requirements
• Board of Directors: Number of directors, election procedures, terms, meeting frequency, quorum, removal
• Officers: Roles and duties (President, Secretary, Treasurer), appointment/removal, terms
• Stock: Issuance procedures, transfer restrictions, stock certificates
• Amendments: How bylaws can be amended (typically board or shareholder vote)
• Fiscal Year: Corporation's fiscal year
• Indemnification: Director/officer indemnification provisions

• Minimum: 1 director (Georgia allows one-person corporations)
• Qualifications: No residency requirement (directors can live anywhere)
• Election: Directors elected by shareholders at annual meeting
• Term: Typically one year (or staggered terms if multiple classes)
• Removal: Shareholders can remove directors with or without cause (unless bylaws require cause)

Duty of Care:

• Must act with care an ordinarily prudent person would exercise in similar position
• Duty to be informed before making decisions
• Can rely on officers, employees, advisors if reasonable

Duty of Loyalty:

• Must act in best interests of corporation (not personal interests)
• Disclose conflicts of interest
• No self-dealing or corporate opportunity usurpation

• Frequency: At least annual board meeting (typically quarterly for active businesses)
• Notice: Must provide notice (unless waived) per bylaws
• Quorum: Majority of directors (unless bylaws specify different)
• Action: Majority vote of directors present (unless bylaws require higher threshold)
• Minutes: Must document actions taken in written minutes
• Unanimous Consent: Can take action without meeting if all directors consent in writing

Georgia requires at least these officers:

• President (or CEO): Chief executive, manages day-to-day operations
• Secretary: Maintains corporate records, minutes, stock ledger
• Treasurer (or CFO): Manages finances, accounting (optional in Georgia but recommended)

Additional officers (optional): VP, COO, General Counsel, etc.

Important: One person can hold multiple officer positions (President can also be Secretary and Treasurer).

• Required: Must hold annual meeting to elect directors
• Notice: 10-60 days advance written notice to shareholders
• Location: Can be anywhere (in or out of Georgia)
• Quorum: Majority of shares entitled to vote (unless bylaws specify different)
• Actions: Elect directors, approve major transactions, amend bylaws (if reserved to shareholders)

• Can be called by board, president, or holders of 10%+ shares (or as bylaws specify)
• 10-60 days notice required
• Purpose must be stated in notice (can only act on stated purposes)

Georgia corporations must maintain:

• Articles of Incorporation (as amended)
• Bylaws (as amended)
• Board resolutions creating classes of stock, fixing rights
• Minutes of shareholder meetings for past 3 years
• All written shareholder communications for past 3 years
• Financial statements for past 3 years
• List of current directors and officers (names and addresses)
• Stock ledger (list of shareholders, shares owned, transfers)
• Copies of all reports/statements sent to shareholders

Where to keep: Principal office or registered office in Georgia

Shareholder inspection rights: Shareholders can inspect and copy records (with 5 days' advance notice)

• ☐ Hold annual shareholder meeting (elect directors)
• ☐ Hold annual board meeting (elect officers, approve financials)
• ☐ Prepare and approve minutes
• ☐ File Georgia Annual Registration ($50, due Jan 1 - April 1)
• ☐ File federal tax return (Form 1120 or 1120-S)
• ☐ File Georgia tax return (Form 600 or 600-S)
• ☐ Update stock ledger (if any transfers)
• ☐ Review and update bylaws/shareholder agreement if needed

C-Corporations:

• Rate: 5.75% flat tax on Georgia taxable income
• File: Form 600 (Georgia Corporate Income Tax Return)
• Due: 15th day of 4th month after fiscal year end (April 15 for calendar year)
• Estimated Payments: Quarterly if expect to owe $1,000+ (April 15, June 15, Sept 15, Dec 15)

S-Corporations:

• Corporate level: No Georgia tax (pass-through to shareholders)
• File: Form 600-S (Georgia S-Corporation Tax Return) - due March 15
• Shareholders: Report income on personal Georgia return (Form 500)
• Rate: Shareholders pay 5.49% on distributive share of income

• Rate: 21% flat federal corporate tax (Tax Cuts and Jobs Act of 2017)
• File: Form 1120 (U.S. Corporation Income Tax Return)
• Due: 15th day of 4th month after fiscal year end (April 15 for calendar year)
• Estimated Taxes: Quarterly (Form 1120-W) if expect to owe $500+
• Double Taxation: Corporate profits taxed at 21%, then dividends to shareholders taxed at 0-20% (qualified dividends)

• Corporate level: No federal tax (pass-through)
• File: Form 1120-S (U.S. Income Tax Return for S-Corp) - due March 15
• Schedule K-1: Issued to each shareholder showing share of income/loss
• Shareholders: Report K-1 income on personal Form 1040
• Rate: Shareholders pay income tax at personal rates (10-37%)
• Self-Employment Tax Savings: Only salary subject to payroll tax (15.3%), distributions NOT subject

Choose Corporation if: Raising VC funding, planning IPO, want S-Corp tax savings, need stock options for employees, professional practice (PC).

Choose LLC if: Small business, real estate investing, maximum flexibility, minimal formalities, not raising VC.

I can help you decide based on your specific situation.

S-Corp is a tax election, not a different entity type. You form a C-Corporation first, then elect S-Corp tax treatment (Form 2553). S-Corp gives you pass-through taxation and self-employment tax savings.

Georgia Secretary of State processes online filings in 7-10 business days. With my service:

• Standard Package: 7-10 business days total
• Professional Package: 5-7 business days total
• Premium Package: 3-5 business days total
• Expedited service available (2-3 business days) for $300 extra

You need a Georgia registered agent address (which I can provide). Your principal office, directors, and shareholders can be located anywhere.

My shareholder agreements (Professional/Premium packages) are drafted personally by me and include:

• Buy-sell provisions (death, disability, termination)
• Transfer restrictions and right of first refusal
• Valuation methods for share purchases
• Drag-along/tag-along rights
• Deadlock resolution procedures
• Board representation and voting rights

Yes! My packages include:

• Annual registration deadline reminders ($50 due Jan-April)
• Tax deadline calendar (federal and Georgia)
• Optional annual registration filing service ($99/year)
• Premium package includes quarterly compliance check-ins with me