Georgia law allows a business to incorporate and be identified as its own legal entity. An incorporated business acts in its own name, whether buying and selling property, agreeing to contracts or exercising legal rights. In Georgia, the process of incorporation is begun by filing with the Secretary of State in accordance with specific guidelines.
Benefits of Incorporation in Georgia
An incorporated business enjoys certain advantages, the most important being a limit of liability for the shareholders. The most shareholders can lose is the amount they invest in the business. With unincorporated businesses, personal property of owners can be liquidated in order to fulfill the liabilities of the business. A corporation also allows creditors in the Union area to assess the credit worthiness of the business as a whole rather than that of its owners, allowing the business to get loans more easily. Lastly, the ownership of a corporation is divided into an abundance of equal portions or "shares" of stock. Without this mechanism, transferring ownership of a business would be impractical.
Costs of Incorporation
There are costs associated with incorporation, both short and long term. First, businesses in Georgia might be charged a fee to incorporate. Also, a corporation is taxed as its own entity. The individual incomes of the owners are still taxed also, and this can mean the same income is taxed twice, known as double taxation. With proper planning and assistance from a local Union lawyer, you can avoid this disadvantage.