Types of LLC in georgia [Expert Guide]

Last updated : Sept 22, 2022

Written by : Sidney Guitierrez

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What are the 3 types of LLC?

Single-member LLC for the sole-proprietorship (solo entrepreneur)
Multi-member LLC (member-managed LLC or manager-member LLC)
Domestic LLC and Foreign LLC.
Series LLC.
L3C Company (low-profit LLC)
Anonymous LLC.
Restricted LLC.
PLLC and LLC.

What type of LLC is best?

Company transactions.
Taxes.
Debts the business owes.

What are the different LLC classifications?

Classifications. Depending on elections made by the LLC and the number of members, the IRS will treat an LLC as either a corporation, partnership, or as part of the LLC's owner's tax return (a â€œdisregarded entityâ€).

What is the difference between LLC C and LLCs?

The LLC is a low-maintenance legal entity that's best for a simple business. An S corporation is a tax status created so that business owners can save money on taxes. A C corporation is a more complicated legal entity that's best for businesses looking to keep profits in the business.

How do I know if my LLC is an S Corp or C Corp?

You'll find your corporation classification on your business returns. You can review previously filed tax returns or ask your accountant to review the returns. All corporations must file an annual income tax return. C corporations file IRS Form 1120 and S corporations file Form 1120S.

Do LLCs pay taxes?

An LLC does not pay income taxes; rather, income is passed to the LLC's members, and they report and pay tax. Even though an LLC does not pay tax itself, it still must report its income to the IRS using an "information" return.

What is the downside of an LLC?

Disadvantages of creating an LLC Cost: An LLC usually costs more to form and maintain than a sole proprietorship or general partnership. States charge an initial formation fee. Many states also impose ongoing fees, such as annual report and/or franchise tax fees. Check with your Secretary of State's office.

What can be written off with an LLC?

Car expenses and mileage.
Office expenses, including rent, utilities, etc.
Office supplies, including computers, software, etc.
Health insurance premiums.
Business phone bills.
Continuing education courses.
Parking for business-related trips.

What is a good name for an LLC?

Make It Legal. The most important thing when you're choosing an LLC name is to make sure it's legal.
Make It Memorable. You want your LLC name to be something people can remember.
Make It Meaningful.
Make It Original.
Make It Distinctive.
Make It Domain Name Ready.
Make It Social Media Friendly.

How does an LLC avoid paying taxes?

A general Corporation making a Subchapter â€œSâ€ Election or an LLC with or without a Subchapter S Election pays no federal tax on its taxable income and no employment taxes on its distributions to stockholders.

Does a single-member LLC need an EIN?

An LLC will need an EIN if it has any employees or if it will be required to file any of the excise tax forms listed below. Most new single-member LLCs classified as disregarded entities will need to obtain an EIN. An LLC applies for an EIN by filing Form SS-4, Application for Employer Identification Number.

How do you classify a business?

Sole proprietorship. A sole proprietorship is easy to form and gives you complete control of your business.
Partnership. Partnerships are the simplest structure for two or more people to own a business together.
Limited liability company (LLC)
Corporation.
Cooperative.

Which is better for taxes LLC or S Corp?

LLCs. As an LLC owner, you'll incur steep self employment taxes on all net earnings from your business, whereas an S corporation classification would allow you to only pay those taxes on the salary you take from your company. However, itemized deductions could make an LLC a more lucrative choice for tax purposes.

Is it better to be self employed or LLC?

You can't avoid self-employment taxes entirely, but forming a corporation or an LLC could save you thousands of dollars every year. If you form an LLC, people can only sue you for its assets, while your personal assets stay protected. You can have your LLC taxed as an S Corporation to avoid self-employment taxes.

Is it better to be an S Corp or LLC?

If there will be multiple people involved in running the company, an S-Corp would be better than an LLC since there would be oversight via the board of directors. Also, members can be employees, and an S-Corp allows the members to receive cash dividends from company profits, which can be a great employee perk.

Who pays more taxes S corp or C Corp?

If your company is making a profit and you want to take some of that money out of the company, it's generally cheaper to do so as an S corp than a C corp. But note that in some cases, the personal income tax rate paid by S corp shareholders will be higher than the corporate income tax rate.

What is the difference between a single-member LLC and an S corp?

So the main difference is with a single-member LLC, only the business owner can report business profit/loss on their personal taxes, whereas in an S-Corp, all shareholders can. When starting a small business, many entrepreneurs end up deciding between two types of business entitiesâ€”LLC vs. S-corp.

When should I convert from LLC to S corp?

The right time to convert your LLC to S-Corp From a tax perspective, it makes sense to convert an LLC into an S-Corp, when the self-employment tax exceeds the tax burden faced by the S-Corp. In general, with around $40,000 net income you should consider converting to S-Corp.

How much can an LLC write off?

If you have $50,000 or less in startup costs and are in your first year of business, the IRS allows you to deduct $5,000 in startup costs and $5,000 in organization costs from your taxes. If your startup expenses exceed $50,000, the total deduction will be reduced by however much your expenses exceed $50,000.

Can LLC Get tax Refund?

Do LLCs get tax refunds? Generally, no. However, LLCs can elect to be treated like C corporations for tax purposes by filing Form 8832. If an LLC elects C corporation status and makes quarterly estimated payments higher than its tax liability for the year, the LLC can receive a tax refund.

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Comment by Napoleon Raymundo

as of 2021 there are 31.7 million business owners in the united states many business owners are setting up llc's one out of every six taxpayers that comes to my office owns an llc i own six llc's and i've set up over 5 000 llcs for my clients l to the l to the c i love saying llc because it reminds me of ll cool j llc's are the most popular business vehicles that business owners set up why is it that most business owners who have llc's aren't sure if they should be in llc's my name is carlton dennis and in today's video we are going to go over what you need to consider before setting up an llc llc owners make a lot of mistakes i'm sorry and in today's video i need to point out some of the mistakes that you need to be conscientious of before establishing your llc let's dive in mistake number one is not knowing the type of income you're receiving prior to setting up your llc this is really important and reason why is because there are three different income types you could be receiving and it could determine whether or not you need an llc versus an s corp or a c corporation the three different income types that you need to be familiar with are number one ordinary income ordinary income is everyday income that you work for and is typically in the form of w2 wages or 1099 compensation the next form of income is passive income passive income is income you technically do not have to work for typically you're familiar with passive income from investment properties or interest that you earn off of the money that you have in your bank account the third type of income is portfolio income portfolio income is typically income that you receive when you decide to sell capital assets or if you have capital gains tax from the sell of a rental property these three types of income are important for us to know because it can help us decide whether or not it makes sense for us to have an llc so let's talk about it number one passive income if we have passive income what we have to understand is that passive income is not subject to social security tax or medicare tax that ordinary income is subject to so when you think about it it may not make sense for you to worry about whether or not you have to eventually transition your llc to an s corporation if you have rental real estate if your income is passive you don't have to worry about self-employment tax so typically a lot of real estate investors will establish llc's for their real estate holdings so if you ever had the question in your head why do people set up llc's as opposed to c corps or s corporations for their real estate a big deciding factor around this is because real estate investors are not subject to the social security and medicare tax that ordinary income earners are subject to this leads me to ordinary income ordinary income is the income you're familiar with when you're working a job where you are putting in labor anytime you're putting in labor you're going to have to pay into social security and you're going to have to pay into medicare taxes and if you decided to become a business owner that means you pay into self-employment tax it's been talked about in all of my youtube videos if you've seen them now one thing that you have to understand about ordinary income is that ordinary income you will pay 15.3 self-employment tax which is your social security and medicare but then you will also pay your federal taxes and your state taxes so knowing that ordinary income is subject to self-employment tax federal tax and state tax we have to define what type of business owners need to know that their business is actually ordinary income instead of passive business let's talk about that i have clients all the time that'll get on the phone with me and tell me carlton i have a passive business i started amazon automation i'm doing amazon fba i'm selling products on etsy i have my online shop any of these clients that i talk to that have these businesses that are very automated had to work to get to a place where their businesses are automated they sat on the computer they figured out how to put up ads build their website hire the contractors and someone else is doing the fulfillment and dropping off the orders to the house that is a business that requires work and if labor is involved we are subject to social security and medicare taxes federal and state taxes so i just wanted to make sure that when we go into setting up a llc that we also understand which type of businesses are ordinary income businesses and truly understanding what would be considered a passive business last but not least is portfolio income i don't really get too much into the portfolio income unless i'm dealing with my real estate investors which i primarily focus on if you happen to have real estate income and you decide to sell an investment property you're dealing with capital gains it could be short or long-term capital gains depending on how long you held on to that asset but if you're aware of capital gain income you might realize that this is actually categorized as portfolio income to your tax account so understanding these three types of income can let us know whether or not you should have an llc that's going to remain as an llc or if you have an llc that will eventually be switched to an s corporation or another desired entity structure mistake number two with llcs is not establishing your llc prior to knowing that you wish to have a real estate acquisition it comes up pretty often that i get on the phone with a client that told me that they just bought an investment property and now they're trying to decide whether or not it makes sense for them to have an llc and i sometimes wish that they would just have a conversation with me prior to them buying the rental property because then i might have advised them to establish the llc prior to buying the rental property so that they can buy the property in the name of the llc that they establish for themselves this is a way that we can completely avoid having your name ever online at the accounting assessor's office saying that you're on title for owning the property but then we get to a place where you want to have that asset protection because you find out that someone could slip and fall and hurt themselves inside of your property so you eventually want to have an llc for liability protection but the property is already in your name so now we have to decide does it make sense to set up an llc and do a quick claim deed and re-title your property in the name of the llc well this is where we can run into some issues at least i've had clients run into issues one of the issues that they run into is this whole do on sale clause where now there's a stipulation in their mortgage agreement that says that anytime a property is being transferred or sold that the mortgage is now due so this is where we have to be extremely careful and mindful prior to establishing llc's into investing in real estate we have to speak with the tax pro we have to speak with our mortgage company we have to determine if we can purchase a rental property in the name of an llc and if you're setting up

Thanks for your comment Napoleon Raymundo, have a nice day.
- Sidney Guitierrez, Staff Member

Comment by h1yQ

what's up guys Devin here with another quick video on how to go about creating an LLC or in a limited liability company in the state of Georgia I know it varies state from state in state of Georgia you actually can not to sell online I know a lot of states may require you to physically go to the county office and Georgia it's really quick and it's really simple so today I'm going to walk you through the steps of creating your LLC online in addition I'm going to show you how to go about creating your tax ID number or your EIN for your business because this is one of those things that's extremely vital to do things like maybe open up a business account for your business so I'm gonna walk you through all these stuff and of course guys if you like the video if you learn something new please don't hesitate to press that like button down below and of course don't forget to subscribe for more alright let's get started so I'm gonna go ahead and pull up my internet here good old Google right and then what we're gonna do is we're gonna type in Georgia secretary iterative state just like that right and you're gonna go to the Georgia Secretary of State website typically it would be the first option unless you type in Georgia secretary state right from there you're gonna corporations okay and then there and put on my face a bit you're gonna hit file online okay it's really really quick and really simple so once you get here you're gonna go to online services and you're gonna have to create a username and password so if you don't have one created already I would advise you to go ahead and knock this process on so let me continue for all you would do is literally hit this button right here says create a user account right cool right so moving on I already have one set up so I'm just gonna go ahead and get my game it takes a few seconds but what you get in here you're gonna then hit where it says create or a register or I'm sorry create eight or register a business here it is right here against off to little arrow right there on the side right here create or register business so I'm gonna go ahead and get back create a register business like so okay and what you're gonna do is I am creating a new domestic business now if you heard I'm a not a Georgia resident or business that is in good standing or in its place of formation you just hit this other option but this is for those who are creating a new entity or a new business right you're gonna heat er select domestic limited partnerships are a domestic limited liability company so word because we're creating an LLC now if you wanted to create those other options from on profit corporation nonprofit a limited partnership and so on you can choose a lot but for the point of this video we're gonna go ahead and knock out the limited liability company because we want to create an LLC right okay so next we don't have a business registration of a reservation number if you do we get to let you would select yes and put it in here but in this case you know be a brand brand spanking new we don't have so we're gonna get note and continue for to our next option here you're gonna place your business a let's just say Bob Marley real estate right oh and it must contain LLC all right this is a limited liability company our next option let's say the Marley brothers LLC right these aren't needed but in the event that you can't use that particular registered name if it's taken already you you'll have a lot to choose from or they will have other options for you to work with right okay it's applicable upload of a letter of name approval one from an appropriate agency and I think this is if you were needing some type of a pool from a particular agency in this instance this isn't needed hopefully the name you choose does it require any of that good stuff since it's a unique name that you're going to use and it's not from some or rather it's you don't have you don't need any terms of documentation needed from like your partners or a specific business to continue forward all right so we're gonna go ahead and continue forward to our next business purpose here in a ICS Co so basically what it's asking is for what does your business have to do what is it witnessed a niche for me personally we're dealing with real estate so I would obviously like the option where it says real estate right so I would go to real estate and Lynch leasing and then furthermore you have a sub code here in my particular instance I would use let's say other activities related to real estate but again just depending on your niche you know you have several options to choose from let's choose something that's you know mostly related to your particular business so that whenever they do go through and create your your LLC for you you'll have something or that code that is strictly strictly specific to your business of choice right so once you get that done you're gonna go here and put in your address so let's see I'm just gonna use one of these old addresses here I have so many so let's just use this headers here I think this is from a house I was working on selling so you just put in your address to city and county or country furthermore you'll put the state in the zip code right next you also put an email address so I'll just fill in some information on one of my email addresses I have so just simply put down your primary you put down the secondary email address if need be I'm just going to keep that blank you could burn that primary email address also you are going to create a registered agent so this is the person that basically creates is LLC for you or that needs to go in and do any of these is filing for you so again in my case I put it in my name all my information just like so right and it fills in here you go hit add right once you have it had it you'll see it add it here right under there there's no other optional provisions that I need so I'm just going to continue forward and then all you do next is just hit this box claiming the Fowler's the Defiler is surreal and that you're you're you're certifying that everything is accurate right okay so I'm the ultimate signer and the authorizer title is going to be for myself I would put member because I'm a member of the organization right so I'm going to board oh it says please create the registered agent some what reason why I have myself selected here here we go so you got to make sure all this good stuff still damn form looks like he continued his trade a registered agent it still says that so this is I don't know why this part gets pretty iffy so here what I'm gonna do I'll create my girl information here I'm gonna meet your Italy guy - all right we'll click email and all that good stuff here you got we're in Fulton County so I'll just you'll just create this based on where you are right there go all right let's see if that works everyone at work all right cool so here we are we're almost done reading the review stage here so are you gonna do next is this verify everything looks good Bob miles real estate or the multi brothers see you got your address here let's see principal purpose is real estate in

Thanks h1yQ your participation is very much appreciated
- Sidney Guitierrez

About the author

Sidney Guitierrez

I've studied social stratification at York College of Pennsylvania in York and I am an expert in sociology of generations. I usually feel mellow. My previous job was materials inspector I held this position for 16 years, I love talking about soccer and lamp making. Huge fan of Hillary Clinton I practice horse riding and collect disneyana.

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