Operating Agreement for LLC Georgia: Everything You Need to Know
When writing an operating agreement for LLC Georgia, it's important to understand how this works. 3 min read
When writing an operating agreement for LLC Georgia, it's important to understand how this works. Limited liability companies, also known as LLCs, are businesses that provide several advantages to their owners. When owners, or members, create an LLC, they get the tax benefits that a partnership has. They also get the benefit of liability protection that a corporation has.
Name the LLC
The first and most essential step when starting an LLC is to name the LLC. Research must be done to make sure the name fits well with what the business is about. It should also be searchable by any client. The following words must be included:
- Limited Company
- Limited Liability Company
The name can't be more than 80 characters with spaces included. If restricted words are used, such as “attorney,” “university,” or “bank,” extra paperwork will need to be filled out. They may also require someone who is licensed, such as a lawyer or a doctor, to be a member of the LLC.
Words that aren't allowed include any that would confuse the LLC with a state or federal agency, such as “treasury,” “FBI,” and “Secret Service.”
The name must be different from any other names in the Georgia Secretary of State's records. The company should first check if the LLC is available so it can then reserve the name. Doing a business name search on the Secretary of State's website will ensure the name is available. A name can be reserved for up to 30 days at the cost of $25. Even if the company doesn't plan to make a website soon, it should buy the domain name so no one else can.
Choose a Registered Agent
A registered agent must be nominated for LLCs in the state of Georgia. This agent is a business or person who agrees to receive and send all legal papers on the LLC's behalf. These papers include state filings and service of process of legal action in case the company gets sued. The registered agent needs to be a corporation that can legally do business in Georgia or a resident of Georgia. Someone within the company may be elected as well.
File the Articles of Organization
In order to register the LLC, the articles of organization will need to be filed within Georgia. This can be done through the mail or online. The document must have certain information that's required under the laws of Georgia. This includes the name and address of the registered agent, main place of business, and the company's name.
When the articles of organization are filed, it will need to be decided if the LLC will be member- or manager-managed. This document can be filed online at a cost of $100. Make sure to submit both the Transmittal 231 forms and the articles of organization when registering the LLC.
Create an Operating Agreement
The state of Georgia does not require an operating agreement. However, this is highly recommended, even if there is just one member in the LLC. This legal document will list all the operating procedures and ownership of the LLC. The agreement is just an internal document, so there's no need to file it with the state of Georgia. It should be kept with the company's business records.
A written agreement will help reduce any disputes that might happen among the managers and members. The agreement should state how the LLC will be operated. This includes how much every member contributes in capital, how the members will share any profits and losses, and how the company is managed.
This helps to outline the relationship between the owners and shows financial institutions and the IRS that the company is operational and legitimate. This agreement also will provide liability protection by separating the members and the business. Lenders like to see an operating agreement when they begin business transactions. If the articles of organization do not specifically state that the LLC is manager-managed, by default it will be treated as a member-managed LLC. This document lets changes happen as the business grows.
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