Benefits of a Corporation
A corporation is a limited liability entity, which means that shareholders of a corporation are not personally responsible for the corporation’s financial or legal obligations. Many people form corporations because of this as well as possible tax benefits.
Requirements for Incorporating in Georgia
Preparing Your Articles of Incorporation
To form a Georgia corporation, you must file articles of incorporation with the Secretary of State and pay a filing fee. Your corporation will exist as soon as you have filed the articles, unless your articles specify a later date. Articles of incorporation may contain many optional provisions, but they must include the following:
- Name of the corporation
- Number of shares authorized
- Registered agent and registered office
- Names and addresses of incorporators
- Address of the principal office of the corporation
A corporation can have different types of stock, called classes or series. These types of stocks can have different advantages, for example one can offer voting rights while another may not. In regards to shares, the articles of incorporation must meet the following requirements:
- The articles of incorporation must specify the classes of shares and the number of shares of each class that the corporation is authorized to issue.
- If there is more than one class or series of shares, the articles must provide a designation for each class. Before any shares of a class or series are issued, the articles must state the rights, preferences and limitations of each class or series of shares.
Naming Your Corporation
Before filing articles of incorporation, you should make sure your proposed corporation name is available either through the Secretary of State’s website or an online entity name check service.
You can reserve a name for 30 days by submitting a name reservation request to the Secretary of State. A 30-day extension is also available.
When choosing your corporation name, keep in mind the following requirements:
- All corporation names must include the words “corporation,” “incorporated,” “company” or “limited,” or the abbreviations “corp.,” “inc.,” “co.,” or “ltd.”
- A corporation’s name must be distinguishable from the names of other business entities on file or currently reserved with the Secretary of State.
- A corporation name cannot be more than 80 characters long, including spaces and punctuation.
Incorporators are responsible for signing and filing the articles of incorporation. Their names and addresses must be listed in the articles.
The following requirements apply when specifying incorporators:
- There may be one or more incorporators.
- An incorporator must be a person.
- The incorporators must arrange for publication a notice of intent to incorporate. The notice must appear in the newspaper that is the legal publication for the county in which the business is located. The request for publication must be delivered to the newspaper no later than one day after the articles are filed.
- If the articles do not name the corporation’s initial directors, the incorporators must hold an organizational meeting to elect directors.
Corporate directors are responsible for setting corporate policies and strategies and managing the affairs of the corporation. Directors are fiduciaries, which means they must act in good faith, exercise good business judgment and place the interests of the corporation and its shareholders ahead of their own personal interests.
You must adhere to the following guidelines when specifying your corporation’s directors, although your bylaws may include additional qualifications:
- A corporation can have one or more directors.
- State law does not require a maximum number of directors, but the number of directors should be stated in the articles of incorporation or bylaws.
- Directors must be 18 or older.
- Directors do not need to live in Georgia or be shareholders of the corporation
Specifying a Registered Agent
A registered agent is a person or entity that receives official correspondence or documents on behalf of the corporation and alerts the appropriate corporate personnel. A registered office is a place where the registered agent is personally located.
When specifying a registered agent for your corporation, you must adhere to the following guidelines:
- A registered agent may be a person who resides in Georgia or a corporation authorized to do business in Georgia. The registered agent must have the same business address as the corporation’s registered office.
- Your corporation’s registered office must be an actual street address, not a post office box, and may be the same as the corporation’s place of business.
- The articles of incorporation must list the mailing address for your corporation’s principal business office, if that address is different than the registered office address. This address may be a post office box.
Stating a Corporate Purpose
Unlike many states, Georgia does not require you to state the purpose of your corporation. All Georgia corporations have the purpose of engaging in any lawful business.
Determining Incorporation Bylaws
Bylaws outline a corporation’s internal rules and operating procedures. They may also contain provisions for managing the business and regulating the affairs of the corporation. Usually bylaws include such provisions as the number of officers and directors, the way officers and directors are chosen and the way directors’ and shareholders’ meetings are called and conducted.
Your corporation’s bylaws must adhere to the following requirements:
- Bylaws are not required for incorporation and are not filed with the Secretary of State. However, after the articles of incorporation are filed, the directors or incorporators must meet and adopt bylaws.
- Bylaws cannot be inconsistent with the law or the articles of incorporation.
Costs of Incorporating in Georgia
The Georgia Secretary of State requires a fee when filing articles of incorporation or reserving a corporation name. There is also a fee, paid to the newspaper, to have your incorporation notice printed. Corporations are also required to pay state and federal income taxes.
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