How to start a business in Georgia

Entity choice drives everything downstream: liability exposure, how you are taxed, how you pay yourself, what a bank asks for, and what a contract counterparty will accept. Changing it after the fact is possible but rarely free.

A sole proprietorship requires no state filing and is not a separate legal entity from the owner. Contracts, liabilities, and licenses generally attach to the owner personally, even if a trade name is used. It gives you no separation between personal and business liability. An LLC creates that separation, is flexible on ownership and profit allocation, and is the common default for Georgia small businesses. A corporation makes sense when you need stock, outside investors, or a board structure. A nonprofit corporation is a different track entirely and pairs with a federal exemption application.

Separately from all of that, an eligible LLC or corporation can make the S corp tax election with the IRS. That is a tax decision layered on top of the entity, not an alternative to it, and it only pays off above a certain level of consistent profit because it adds payroll and a separate business return.

The EIN is issued to a legal entity, so the entity should exist first. Applying before your Georgia filing is approved is a common sequencing error that can require correcting the responsible-party record with the IRS, and in some cases requesting a replacement number, depending on the facts.

The IRS issues EINs directly at no charge. If a service quotes you a fee for "getting your EIN," you are paying for the handling, not the number. Once the EIN exists, everything else unlocks: the business bank account, payroll registration, merchant processing, and most vendor and contract onboarding.

Related decisions cluster at this point too. If an S corp election makes sense, it is time-sensitive relative to formation, so it should be evaluated now rather than at tax time.

Founders routinely assume the Secretary of State filing is the license. It is not. There are three separate layers, and being clean on one says nothing about the others.

State registration is your entity with the Secretary of State. State tax accounts are separate registrations with the Georgia Department of Revenue — sales and use tax if you sell taxable goods or services, withholding if you have employees — plus a Department of Labor account for unemployment insurance when you hire. Local licensing is the occupational tax certificate or business license issued by your city or county, and Georgia has no single statewide general business license that replaces it.

On top of those sit industry permits: food service and health department approval, cosmetology, childcare, contractor licensing, alcohol licensing, and motor carrier authority, among others. Requirements and fees vary by jurisdiction and industry, which is why they should be confirmed with your specific city or county rather than assumed from a general article.

Two partners plan a food truck. They form a multi-member LLC because there are two owners and real physical liability. They file with the Secretary of State, list a registered agent, and then obtain the EIN.

Because there are two owners, the operating agreement is not optional paperwork — it is the only place that records ownership split, capital contributions, who can sign contracts, how profit is distributed, and what happens if one partner leaves. They register for sales tax because prepared food is taxable, then work the local layer: county health department permits, commissary requirements, fire inspection, and a business license in the home jurisdiction plus wherever they operate.

They skip the S corp election in year one because profit does not yet justify payroll costs, and revisit it once the truck is consistently profitable.

A solo consultant with corporate clients forms a single-member LLC, mostly because clients want to contract with an entity and because a signed statement of work carries real exposure. The entity is taxed as a disregarded entity by default, so profit flows to the personal return.

There is likely no sales tax registration for professional services, and no local permit beyond the business license — but there is still a business license, a business bank account, quarterly estimated taxes, and professional liability insurance. When profit becomes consistent, the S corp election becomes worth pricing out against payroll and filing costs.

Filing under a name that conflicts with an existing registration or someone else's mark. Choosing an entity type because a friend used it. Skipping the operating agreement in a partnership, then discovering there are no written terms when the relationship strains. Mixing personal and business banking, which undermines the liability separation the entity was supposed to create.

Applying for the EIN out of sequence. Assuming state registration covers local licensing, then finding out during an inspection. Electing S corp status before the numbers support payroll. Never calendaring the Georgia annual registration and drifting toward administrative dissolution. Waiting until the first tax deadline to start bookkeeping.

Every one of these is inexpensive to prevent and expensive to unwind. That is the whole case for getting the sequence right the first time.