One of the US states that permits single-member LLCs is Georgia. An organization with only one owner that functions similarly to an LLC is known as a single-member LLC. It permits pass-through taxation and affords the owner liability protection for their own assets.
An LLC can have numerous owners or members, whereas a single-member LLC only has one owner, hence this is the fundamental distinction between the two. However, proprietors of LLCs and single-member LLCs are protected from unlimited liability. In the event of a lawsuit or bankruptcy, personal assets like homes, vehicles, and bank accounts are therefore not at danger.
Similar to an LLC, a single-member LLC is protected in Georgia. This indicates that the assets of the business are distinct from those of the owner. The owner’s personal assets won’t be impacted if the business runs into legal or financial difficulties. It’s crucial to remember that the owner could be held personally liable if they personally guarantee any debts or obligations of the business.
You must first decide on a name for your business before you can create a single-member LLC in Georgia. The name must be original and unclaimed by another company operating in the state. You must submit articles of incorporation to the Georgia Secretary of State’s office after deciding on a name. This document contains the name of your business, the contact information for the registered agent, as well as the contact information for the owner.
In Georgia, creating an LLC or a single-member LLC costs $100. However, maintaining your firm in good standing entails constant costs. For instance, you have to submit an annual report and pay $50 per year. Depending on your area and sector, you might also need to seek business licenses or permissions.
In Georgia, single-member LLCs and LLCs with more than one member are taxed differently. Single-member LLCs are taxed as pass-through entities, and LLCs are subject to a $50 annual flat tax. The business’s gains and losses are therefore reported on the owner’s personal tax return and are subject to individual taxation.
In conclusion, creating a single-member LLC is a realistic alternative if you’re thinking about launching a firm in Georgia with just one owner. It offers pass-through taxation, liability protection, and is reasonably inexpensive and simple to set up. Before making any business decisions, it’s crucial to speak with an attorney or accountant to make sure you are aware of all the potential legal and tax repercussions.
You can pay yourself a salary as a single-member LLC in Georgia, yes. However, the pay must be fair and commensurate with the services you accomplish for the LLC. The income and losses of the LLC are recorded on your personal tax return because, as a single-member LLC, you are classified as a “disregarded entity” for taxation purposes. As a result, self-employment taxes will also apply to any salary you pay yourself. To ensure compliance with all state and federal laws, it is advised to speak with a tax expert and/or an attorney.