Incorporation Procedures for Your LLC

Incorporation Procedures for Your LLC

Incorporating as an LLC...Understanding the Incorporation Process

Incorporating as an LLC is not necessarily difficult but those who do it alone without the services of a good attorney are a sitting recipe for disaster. Frequently I will see clients, who have incorporated themselves soon to learn that although they have filed the Georgia Articles of Incorporation they have failed to:

-Reserving a Business Name. If so desired the name of the business may be reserved prior to the initial filing of the Articles of the Incorporation. In Georgia, for example, a reservation fee of $25 must accompany the request. To reserve a name visit the Corporations Division web site. Care should be taken to ensure that you follow the rules of your particular state's incorporation process ensuring that each and every step is correctly performed.

- Incorporation Articles. The Secretary of State is required to receive an original and one copy of the articles of incorporation. In Georgia, a completed Transmittal Form 227, and a $100. filing fee must be submitted along with the articles.

-Select Managing embers/Partners of the Partnership. Officers of a Corporation are people who are duly authorized and able to legally run the business and have contractual ability.

- Legal Posting in the Official County Paper. All incorporated business's must publish a Notice of Intent to Incorporate in the official legal organ/newspaper of the business initial incorporating address. Georgia, for example list these on the Secretary of States web-site.

- Tax Elections. All newly incorporated business's will need a new Federal Identification Number/EIN, which can be applied for on-line at www.irs.gov/ Also LLC's that desire to become an S Corporation/flow through entity for tax purposes must file IRS Form 2553: Election by a Small Business Corporation within 75 days of the beginning of the tax year to which you would like to become effective. When incorporating with the Secretary of State a company is initially a C Corporation and has to file the S Corporation paperwork to become an S Corporation. LLC's who wish to become an S Corporation for tax purposes should also file this form within the time allotment referred to above. Please note that LLC's pay FICA/Medicaid taxes on all of their net earnings and S Corporations will only pay it on the fair and reasonable salary amounts paid to their active employee/owners, which may make a substantial difference. To read more on how entities are taxes and their respective differences visit http://www.hiscpa.com/article2.html
On an ongoing basis also many business owners fail to:

-Company's Annual Registration Fee to the Secretary of State. Failure to pay this fee can result in your business being listed as a Non-Compliant Entity or worse yet Administratively Dissolved by the Secretary of State's office. For example in Georgia, this can be done on-line.

-Maintain a Valid Business License. Business licenses are to be obtained from the county the business transacts business in/has a physical presence. If the business is located with a town's city limits, then the license is procured from the city.

For all business's before you incorporate, it is prudent to first talk with a Certified Public Accountant to ensure that you select the right entity type for your business. To gain a basic understanding of these nuances visit http://www.hiscpa.com/article2.html  

John Dillard is a Christian Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/  (An Atlanta CPA firm)