There are five main steps to forming an LLP.
- Choose a business name
- File a trade name
- Draft and sign a partnership agreement
- Obtain licenses, permits and zoning clearance
- Obtain an Employer Identification Number
1. How to Choose a Partnership Name
The name of a Georgia partnership must be either unique or a combination of the names of the partners (e.g., Smith and Johnson, or Smith, Smith and Smith). If you plan to create your own unique business name, it must be easily distinguishable from the name of any existing company on record.
To ensure your business name is unique and available, run a search on the Georgia Secretary of State website at https://cgov.sos.state.ga.us and the U.S. Patent & Trademark Office at http://tess2.uspto.gov.
2. File a Trade Name
If you plan to use a business name that is different from the surnames of the individual partners, Georgia requires registration of the business name. You may file a trade name with the Superior Court in the county where your business is located. You may also file your business name online on the Secretary of State’s website.
To file online, you must first procure a username and password by registering with the Georgia Secretary of State website at https://cgov.sos.state.ga.us/Account.aspx/Register. Once you have registered, you may use your username and password to login at https://cgov.sos.state.ga.us.
For more information about how to register your business name in your county’s superior court, contact the clerk of that county. You can usually find contact information for the clerk of the your county’s superior court just by Googling “clerk of superior court [name of your county]” (e.g., “clerk of superior court Chatham County).
Although not required, you may want to consider registering your business name as a trademark. Nolo.com offers a great resource for how to register your business name as a trademark. More information may be found here: http://www.nolo.com/legal-encyclopedia/trademark-law.
3. Draft and Sign a Partnership Agreement
A partnership agreement is recommended, although it is not a mandatory legal requirement. Its purpose is to determine in advance how to handle situations that might later pose difficulties for the original partners.
The following items should be a part of every well-drafted partnership agreement:
- Each partner’s contribution to the partnership
- The allocation of profits, losses and draws
- Each partner’s authority and management duties
- Voting rules for decision-making
- How to admit new partners
- What happens upon bankruptcy, withdrawal or death of a partner
- How to resolve future disputes
It is always possible to amend a partnership later if circumstances change, but creating a well-crafted and signed partnership agreement can avoid much unwanted strife and legal expense.
4. Obtain Licenses, Permits and Zoning Clearance
Many Georgia businesses need to obtain business or professional licenses before forming a partnership. To find out if your business requires special licensure, visit Georgia’s database of occupations that require a license at http://sos.ga.gov/index.php/?section=licensing.
Health care, some legal services and numerous other professions in Georgia are regulated by independent agencies. If your occupation or business activity is not regulated by the licensing board, you may need to check with the appropriate Georgia state agency.
In addition, local regulations, including licenses, building permits and zoning clearances, may apply to your business. You will need to check with your city and county governments for more information.
5. Obtain an Empoyer Identification Number
The IRS requires all partnerships to obtain an Employer Identification Number (EIN). The EIN is a nine-digit number issued by the IRS for tax reporting purposes. A partnership must have an EIN even if it does not have employees. You may register for an EIN at http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online.
You will also use your federal EIN to report state taxes through the Georgia Department of Revenue Tax Center. If you have employees, you must report and pay employment taxes on a periodic basis. You can register to report and pay all employment related taxes through Georgia Department of Revenue New Business Registration at https://gtc.dor.ga.gov/_/#1.
Additional Information for LLPs
Each limited partnership must file an annual registration with the Secretary of State. The fee is $50.00.
The initial registration is due between January 1st and April 1st of the year following the calendar year in which the limited partnership was formed. The annual registration should be filed online at http://www.sos.ga.gov/corporations. The LLP’s principal office address, registered agent and registered office address may be changed on the annual registration.
Changes to the LLP address, registered agent and registered agent address may be made throughout the year by filing another annual registration form and paying the $50.00 fee.