Georgia LLC: Disadvantages

While there are plenty of advantages to choosing to structure your business as a LLC (Limited Liability Company) there are also some disadvantages that may or may not affect you. We strongly suggest reading through all of the advantages and disadvantages here before coming to a decision about whether or not the LLC entity is the right choice for your Georgia business.

LLC Disadvantages

• Most states don’t mandate LLC’s to have an operating agreement (OA) but, if you’re operating without one you may run into problems because most states assume you have one.
• LLC’s have many different titles which may cause confusion among the general public, or perhaps even within the LLC it’s self as one tries to determine who has the authority to enter contracts on the LLC’s behalf.
• Some states levy a franchise or margin tax on LLC’s for the priviledge of enjoying limited liability status. This fee may be assessed based on revenue, profits, amount of capital, or based on the number of owners in the LLC, or possibly even a flat fee.
• Though the LLC is supposed to protect memebers from incurring personal debt in the case of LLC legal problems, some lenders will rquire members of newly formed LLC’s to guarantee personally the loans – making members personally liable for loans that are defaulted on.
• Unfamiliarity. LLC’s are not required to have a board of directors or officers if they don’t wish. Traditional corporations do.
• Inside the USA – an LLC is treated as an LLC. Outside the USA and LLC is probably going to be treated as a US corporation, regardless of LLC designation.
• Some states do not fully recognize LLC’s and may treat the owner as a sole proprietorship or partnership in the case of more owners. This defeats the purpose of establishing an LLC.
• Investors traditionally fund corporations without the LLC designation. If you choose to call your business a LLC you may run into problems trying to raise investments in your business. Most investors like to invest in a company that will have an Initial Public Offering – which would reap them more on their investment. One way to overcome this is to create a new corporation into which the LLC merges. An IPO can now be a possibility.

More Info:

Fill out online LLC form now >

What is a LLC? >

LLC Advantages >

LLC Category (all posts related to LLC’s) >

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Georgia LLC: Advantages

Georgia LLC’s have a number advantages. There are certain advantages inherit in doing business as various corporate entities. Here are some of the advantages people frequently cite when talking about Limited Liability Companies.

Georgia LLC Advantages:

• A LLC has a lot of flexibility when it comes to taxes… The LLC can choose to be taxed as a partnership, s-corp, c-corp, or even as a sole proprietor.
• Unless the Limited Liability Company chooses to be taxed as a C-corporation it can pass through taxes… meaning, there will be no double taxation.
• Avoids corporate formality and requirements necessary to maintain corporate status.
• There is some protection from personal liability – personal assets are not open to court judgement in cases that don’t involve fraud or intentional malevolent acts by individuals.
• LLC members can devise their own contract. This allows for some variance in management duties and responsibility.
• Multiple classes of interest. A LLC can issue many types of stock, whereas a Subchapter S corporation could only issue one type.
• Little paperwork & records-keeping in comparison to a traditional corporation.
• As a default tax classification profits earned by the LLC are taxed personally at the member level and not at the level of the LLC.
• In some states just one individual can create an LLC.

These were some of the major benefits of LLC’s, though there are other benefits if you choose to look into the matter.

If you would like to begin processing your LLC filing with the State of Georgia you can do so HERE.

More Info:

Fill out online LLC form now >

What is a LLC? >

LLC Disadvantages >

LLC Category (all posts related to LLC’s) >

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Call Toll Free: 888-905-7380
Email: Flincorporation@gmail.com
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Georgia LLC: What is it?

A limited liability company ( LLC or L.L.C.) is a legal form of business company giving some limited liability to the LLC owners. This is a legal business entity in most U.S. States. An LLC is not correctly called a limited liability corporation, it’s always limited liability company.

A LLC is a fusion of  two types of business entities:

1. partnership
2. corporation.

The main function of a corporation is the lower liability to owners. There is some limited protection available for actions and debts of the company. Having a corporate entity separate from one’s own personal assets can, in some cases buffer the losses the individual will experience or ameliorate them altogether.

Partnerships offer a pass through of income taxation.

A LLC is seen as being more adaptable or flexible than a regular corporation or partnership and is appropriate for single owned smaller companies.

Some words to be familiar with regarding LLC’s:

• Operating Agreement (OA): This is the agreement that is of utmost importance to the success of the LLC entity because it regulates the rights of members and, if any exist, managers.
• Members: Members of LLCs are the owners of the limited liability company similar to compared with shareholders as the owners of a corporate entity or the partners in a partnership. Members might be persons, corps., partnerships or even other limited liability companies. A member has a certain limit of responsibility to pay back obligations to the LLC which is limited by the capital contribution defined previously.
  
• Managers: Limited Liability Companies might be member-managed in relation to their membership interest. Quite a few LLC OA’s allow for a manager or even a panel of managers to manage the affairs of the LLC. Managers are either appointed by members, win elections, and can also be removed by members. A member could also be a manager, “Managing Member”.
• Articles of Organization: Every Limited Liability Company must register witht he secretary of the state of Georgia. When the articles of organization are filed – these are sufficient.

More Info:

Fill out online LLC form now >

LLC Advantages >

LLC Disadvantages >

LLC Category (all posts related to LLC’s) >

**********

Call Toll Free: 888-905-7380
Email: Flincorporation@gmail.com
Question or Comment? Support Form

Georgia LLC Online Incorporation Form

Here is a link to our online LLC incorporation form if you need an LLC (Limited Liability company) in the state of Georgia.

Here are other links you may need before you start incorporating your LLC online:

More Info:

Fill out online LLC form now >

Georgia LLC – What is it?

LLC Advantages >

LLC Disadvantages >

LLC Category (all posts related to LLC’s) >

**********

Call Toll Free: 888-905-7380
Email: Flincorporation@gmail.com
Question or Comment? Support Form