The Georgia LLC Operating Agreement form is a document that describes the company’s standard operating procedures, including the manager’s responsibilities, compensatory plans, rules of internal work, commitments, and rights of each member. An Operating Agreement can be used by LLCs with one owner or multiple owners. Regardless of the number of members, each person should be listed in the document.
The document is not obligatory in the State of Georgia. However, it is very recommended as it is beneficial for the LLC. It creates such benefits as separation from the personal property of the members and tax benefits that are presented to those having an operating agreement only.
Types of Operating Agreements
A single-member LLC Operating Agreement is signed by the only member or owner of the company. Despite not being a mandatory form, this operating agreement can help the person establish clear policies and operational procedures. Moreover, it saves the owner and his personal belongings from being taken in case of the LLC’s failure. Some serious losses can happen without the document, so it is better to avoid them by signing a single-member LLC Operating Agreement. There are also some benefits for tax payments for the companies with the Operating Agreement.
A multi-member LLC Operating Agreement is a document signed and agreed upon by all the company members. The agreement consists of policies and elements of the company’s everyday working process. It is crucial for all the members to clearly understand and agree on the information stated in the document. Otherwise, a member can use an attorney’s services. The benefits available for multi-member LLCs are absolutely the same as for single-member LLCs. The only difference is the list of names indicated in the form.
Requirements and Laws in Georgia
The Georgia LLC Operating Agreement is not an obligatory form. The Official Code of Georgia Annotated (O.C.G.A) states that an Operating Agreement might provide rights and powers to any person, even if they are not a part of the agreement.
Depending on the number of company members, either one or multiple persons must be indicated in the agreement form. Those who sign the form agree with its content and take responsibility for following the instructions stated in the form.
All the responsibilities laid on an LLC member are performed towards other members or the company as a whole. In case of any court actions caused by company debts and obligations, failures of other members, executive staff, or registered agents, the member acts according to the Code and other laws of the state.
How to Form an LLC in Georgia
All the actions that are needed when creating an LLC in Georgia are described in the official guide by the Georgia Secretary of State Corporations Division. Let’s take a look at the details of this process.
1. Find a Name
To start the process of forming your LLC, firstly, you need to prepare a good name for it. As previously mentioned, the name must be different from all the already registered ones. The Georgia Secretary of State declines names that are not unique. The name must contain the words or abbreviations indicating limited liability company. Remember that the name length should not exceed 80 characters. You will have to pay $25 to register the name.
2. Register the LLC
The next step is the registration of an LLC itself. Articles of Organization are filed and presented to the Georgia Secretary of State. The fee for the filing is $100. Note that if you send the Articles of Organization on paper by mail, the cost will be $110. The AR can be filed online at the Georgia Corporations Division of Secretary of State.
The LLC Articles of Organization must follow the Official Code of Georgia Annotated requirements. Article One should include the name of the company, which is unique and has the abbreviation L.L.C. or LLC. Article Two (optional) should contain information on multiple managers if it is the case. Articles of Organization are signed by the organizer, member, manager, or an attorney-in-fact.
3. Find an Agent
Next, you need to determine the registered agent, who will deal with all the documentation as the representative of the LLC. The following representative can play the role of a registered agent:
- An individual
- A corporation
- A foreign corporation that has rights to conduct business in the State of Georgia
After this, the Operating Agreement is filed. It takes some planning and discussions to develop the version that every member of the company agrees with. So, you might spend some time on this step of the LLC formation.
4. Employer Identification Number
The IRS has to tax your business; that is why you need to obtain the Employer Identification Number (EIN). You can apply for it on the IRS website or by mail. You also need an EIN if you plan to hire some employees, apply for a business loan, or business credit.
5. Obtain necessary documentation
The last step after the registration is specific for different businesses. Depending on your sphere of work, you might need to obtain certain licenses or certificates.
Once you complete all of this, the LLC can be considered created. The process might take some time, as getting approval from the official authorities is not a quick process. However, the waiting is worth the results. Open your LLC and make the Operating Agreement to launch the business successfully.