How to Start a Limited Liability Partnership in Georgia | 2024 Guide

Start a Limited Liability Partnership in Georgia

A Limited Liability Partnership (LLP) is a popular business structure offering the flexibility of a partnership while providing limited liability protection like starting an LLC in Georgia. LLP structure is ideal for attorneys, accountants, and consultants. If you’re considering starting a Limited Liability Partnership in Georgia, this comprehensive guide will walk you through the necessary steps, from researching and planning to ongoing compliance and reporting requirements.

Webinarcare Editorial Team will help you gain knowledge through thorough research and market study. Before starting your Georgia LLP, all the steps in this article must guide you.

What is a Limited Liability Partnership?

Forming an LLP is like starting an LLC as well. However, there are differences in terms of it. A Limited Liability Partnership (LLP) is a type of business structure that combines elements of partnerships and corporations. It allows multiple individuals, known as partners, to jointly own and manage the business while providing limited liability protection to each partner. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.

LLPs are popular among professional service providers, such as lawyers, accountants, and consultants, as they allow for flexible management structures and profit-sharing arrangements. The partners in an LLP can directly manage the business, unlike forming a Corporation in Georgia, where a board of directors typically handles the management.

Each partner’s liability is also limited to the extent of their investment, and they are not personally responsible for the negligence or misconduct of other partners. This is a key difference between an LLP and Georgia General Partnership, where partners have unlimited liability for the partnership’s actions and other partners.

It is suggested that you speak with a legal professional before you begin setting up your limited liability partnership. They’ll understand what’s best for you and your company. To safeguard your personal assets from business debts, you can always start an LLC rather than a limited liability partnership.

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Steps in Starting a Limited Liability Partnership in Georgia

To form a limited liability partnership in Georgia, you must consider following the below guidelines that include research and planning, choosing an LLP name, designating a Registered Agent, filing for Articles of Organization, drafting a partnership agreement, get an EIN, obtaining necessary licenses and permits, the opening of business bank account and maintain ongoing compliance and reporting requirements. 

Step 1: Research and Planning

Before forming an LLP in Georgia, you must familiarize yourself with the state’s laws and regulations governing LLPs. Conduct thorough research to determine if an LLP is the right business structure for your needs, and create a detailed business plan outlining your goals, strategies, and financial projections.

Step 2: Choose an LLP Name

Selecting a unique and appropriate name for your LLP is crucial. First, check the availability of your desired LLP name with the Georgia business registry. Ensure that your chosen name follows Georgia naming guidelines and requirements, which typically include the use of “Limited Liability Partnership” or “LLP” in the name. You can register and reserve the name with Georgia Secretary of State if desired.

Here are some guidelines you must follow while naming your LLP in Georgia- 

  • Be distinguishable from other businesses registered in your state
  • Include the words “Limited Liability Partnership,” “LLP,” or a similar abbreviation.
  • Not include words that are restricted by your state
  • Ensure that your chosen name does not infringe on any existing trademarks or intellectual property rights.

However, to check the availability of your desired LLP name, you can also search the Georgia Secretary of State business name database and Georgia Business Name Search. If the name is available, you may choose to reserve it for a specific period of 30 days by filing a name reservation application and paying the online name reservation fee of $25 and mail name reservation fee of $25. If your LLP plans to operate under a name other than its legal name, you may also need to register a fictitious or “Doing Business As” (DBA) name. 

The DBA filing can be done by two methods, by mail and in person, which costs around $172. In addition, the DBA’s validity in Georgia is Indefinite, which you can file in the Georgia Secretary of State.

You can check out how to file a DBA in Georgia for clearer understanding.

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Step 3: Designate a Registered Agent

In Georgia, you’ll need to designate a Registered Agent for your LLP. The Registered Agent is responsible for receiving the partnership’s important legal and tax documents. Choose a qualified individual or Georgia Registered Agent Services to serve as your LLP’s Registered Agent, ensuring that they meet Georgia requirements.

However, If you plan to become a Registered Agent of your own LLP, follow the steps below. Also, this applies a guideline in hiring your registered agent.

  • Research the requirements in the state where you want to offer your service. Each state has specific criteria, such as having a physical address and being available during normal business hours.
  • Obtain a physical address in the state(s) if needed.
  • Be familiar with the rules, regulations, and compliance requirements for businesses in your state.
  • Create a business plan outlining your services, pricing, and marketing strategy.
  • Register your business entity, such as an LLP, if required.

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Step 4: File a Certificate of Limited Liability Partnership

To officially form your LLP, you must file a Certificate of Limited Liability Partnership with the Georgia Secretary of State. Obtain the necessary forms and provide the required information, such as the LLP name, principal office address, registered agent’s name and address, names and addresses of partners, and management structure. Pay the required filing fee and submit the completed forms to the Georgia Secretary of State’s office.

Step 5: Draft a Partnership Agreement

A well-crafted partnership agreement is essential for governing your LLP and protecting the interests of its partners. This document should cover crucial provisions such as roles and responsibilities of partners, profit and loss sharing, decision-making processes, partner admission and withdrawal, and dispute resolution. Consider having the partnership agreement reviewed by an attorney to ensure its completeness and compliance with Georgia laws.

A partnership agreement should include the following:

  • Business name
  • Description of the business
  • Contact information of the business and its owners

Ownership of all business partners, decision-making, capital contribution, profits and distribution, death and disability, and withdrawal and addition of partners is one of the key factors to consider when forming or creating a partnership agreement. In this way, all business partners will understand what this is all about and how to proceed if the mentioned scenarios happen. 

Without a partnership agreement, your company will often be subject to the general partnership default laws of Georgia. The default laws in Georgia might not be appropriate for your requirements.

Step 6: Get an EIN

Your LLP must obtain Georgia Employer Identification Number (EIN) from the Internal Revenue Service (IRS). The application of an EIN can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN, you can benefit in several ways. It will give your LLP the absolute advantage necessary to operate at full capacity without encountering legal or judicial issues.

Step 7: Obtain the Necessary Licenses and Permits

Depending on your specific industry, you may need to obtain Georgia Business Licenses and permits to operate your LLP. Research your business’s licensing and permit requirements and apply for them accordingly.

You can check out the United States Business License & Licensing Fee Resources for more information about the costs in Georgia.

Step 8: Open a Business Bank Account and Obtain Insurance

Maintaining clear financial records is crucial for any business, so open a separate bank account for your Georgia LLP. Additionally, obtain the necessary Georgia Business Insurance, such as general liability insurance, professional liability insurance (if applicable), and workers’ compensation insurance (if you have employees). 

Check the Best Bank for Small Businesses in Georgia to open a bank account.

Step 9: Maintain Compliance and Reporting Requirements

Stay informed about and comply with relevant laws and regulations to keep your LLP in good standing. File Annual Reports with the Georgia Secretary of State (if required), maintain accurate financial and operational records, and file and pay required taxes at the federal, Georgia, and local levels.

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Advantages of Forming a Limited Liability Partnership in Georgia

While the specific advantages of forming an LLP in Georgia can vary depending on the state’s unique laws and regulations, several public benefits associated with LLPs often apply across jurisdictions. Here are some advantages to consider when forming an LLP in Georgia:

  • Limited Liability Protection: One of the main benefits of an LLP is its limited liability protection to its partners. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.
  • Pass-through Taxation: An LLP typically enjoys pass-through taxation, which means that the profits and losses of the business are passed through to the partners, who report them on their personal income tax returns. This avoids the double taxation often associated with corporations.
  • Flexible Management Structure: Unlike corporations requiring a board of directors, LLPs allow for a more flexible management structure. Partners in an LLP can directly manage the business and make decisions without needing a formal board.
  • Profit-sharing Flexibility: The partnership agreement can outline the distribution of profits and losses among partners, allowing for a customized profit-sharing arrangement based on the partners’ preferences and contributions.
  • Easier Formation and Compliance: Forming an LLP is generally less complicated and expensive than forming a corporation. Ongoing compliance requirements may also be less burdensome than other business entities, depending on the specific laws and regulations in Georgia.
  • Professional Credibility: Forming an LLP can enhance your business’s professional credibility, as it demonstrates a commitment to a formal business structure and can offer reassurance to clients, customers, and potential investors.

Bear in mind that the advantages of forming an LLP in Georgia may vary based on the specific laws and regulations governing LLPs. Researching the applicable laws and consulting with legal or financial advisors is essential to fully understand the benefits and requirements of forming an LLP in Georgia.

Cost of Forming an LLP in Georgia

The cost of forming an LLP in Georgia may vary depending on the required filing fees and any additional services you may need. The filing fee for a Certificate of Limited Liability Partnership typically ranges from $50 to $200, depending on the state.

Can I Form an LLP in Other States?

You can form an LLP (Limited Liability Partnership) in other states. To form an LLP in a different state, you must follow that state’s specific registration requirements and filing procedures. This usually involves filing an application or certificate of registration, paying a registration fee, and obtaining any necessary permits or licenses.

Additionally, you may need to register your LLP as Georgia Foreign LLC if you plan to conduct business in multiple states. It is advisable to consult with an attorney or a business consultant familiar with the laws and regulations of the state where you plan to form your LLP.

Can an LLP Need to Have One Owner?

An LLP (Limited Liability Partnership) cannot have just one owner. By definition, an LLP is a partnership, which means it requires at least two partners to be formed. If you want a business structure with limited liability protection and only one owner, you may consider forming a Single-Member LLC in Georgia instead. An LLC can have one or more owners, known as members, and offers limited liability protection and pass-through taxation. The requirements for forming an LLC will vary by state, so consult your state’s laws and regulations.

FAQs

What is a limited liability partnership (LLP) in Georgia?
An LLP in Georgia is a type of business structure in which partners are not personally responsible for the actions or debts of the business.
Who can form an LLP in Georgia?
Two or more individuals or businesses can form an LLP in Georgia.
What are the filing requirements to create an LLP in Georgia?
To create an LLP in Georgia, you must file a Certificate of Limited Liability Partnership with the Georgia Secretary of State.
What ongoing compliance obligations do LLPs in Georgia have?
LLPs in Georgia must file a biennial report with the Secretary of State and maintain proper business records.
Are LLPs in Georgia required to have a registered agent?
Yes, LLPs in Georgia are required to have a registered agent with a physical street address in the state.
Can non-residents form an LLP in Georgia?
Yes, non-residents can form an LLP in Georgia as long as they have a registered agent with a physical address in the state.
What are some advantages of forming an LLP in Georgia?
Advantages of forming an LLP in Georgia include liability protection for partners, flexibility in management, and pass-through taxation.
What are some disadvantages of forming an LLP in Georgia?
Disadvantages of forming an LLP in Georgia include the possibility of partner disagreement and vulnerability to legal challenges.
What is the cost to file for an LLP in Georgia?
The cost to file for LLP in Georgia is $205.
Are LLP names protected in Georgia?
Yes, LLP names are protected in Georgia and must be unique.
Can an LLP convert to another type of business structure in Georgia?
LLPs can convert to other business structures in Georgia by filing necessary paperwork with the Secretary of State.
How can I search for an existing LLP in Georgia?
You can search for an existing LLP in Georgia on the Georgia Secretary of State’s website.
Is a business license required to operate an LLP in Georgia?
Depending on the type of business, you may be required to obtain a business license in Georgia.
Can LLP partners participate in the daily business management in Georgia?
Yes, LLP partners can participate in daily business management in Georgia.
Are LLPs taxed in Georgia?
LLPs in Georgia are subject to pass-through taxation, meaning the LLP itself does not pay income tax, but the partners are responsible for reporting their share of income or losses on their individual income tax returns.
What benefits do LLPs in Georgia have compared to sole proprietorships?
LLPs in Georgia provide more liability protection for partners and, unlike sole proprietorships, allow multiple individuals to share in the management and finances of the business.
What is the main document needed to set up an LLP in Georgia?
The main document needed to set up an LLP in Georgia is a Certificate of Limited Liability Partnership.
Can LLPs do business outside of Georgia?
Yes, LLPs in Georgia can conduct business in other states.
Is there a limit to the number of partners that can be in an LLP in Georgia?
There is no limit to the number of partners in an LLP in Georgia.
What entities can be partners in an LLP in Georgia?
Individuals, corporations, LLCs, and other types of businesses can all be partners in an LLP in Georgia.
What is required to maintain an active LLP status in Georgia?
In Georgia, LLPs must file a biennial report with the Secretary of State, maintain proper records and a registered agent, and pay applicable fees.
Can an LLP engage in any legal business in Georgia?
Yes, LLPs in Georgia can engage in any legal or legitimate business activity.
Is a partnership agreement required for an LLP in Georgia?
An LLP partnership agreement is not required in Georgia, but it is highly recommended to help prevent partner disagreements.
Are the partner structures in an LLP in Georgia uniform?
Partner structures in LLPs in Georgia are not uniform and can be structured in a variety of ways.
Are there any ownership restrictions for forming an LLP in Georgia?
There are no ownership restrictions for forming LLP in Georgia.
How fast can I register for an LLP in Georgia?
The processing time for registering for an LLP in Georgia can vary, and you should allow ample time for processing and review.
Can an LLP in Georgia offer equities to employees?
Yes, LLPs in Georgia can offer equities to employees.
Can two individuals form an LLP in Georgia to explore an idea?
Yes, two individuals can form an LLP in Georgia for any lawful purpose.
What rules govern LLPs in Georgia?
The Georgia Uniform Partnership Act governs LLPs in Georgia.
What is a limited liability partnership (LLP)?
An LLP is a type of business structure that provides limited liability protection to its partners.
How is an LLP taxed in Georgia?
An LLP is taxed as a partnership in Georgia, meaning the income and losses flow through to the individual partners’ personal tax returns.
What are the advantages of forming an LLP in Georgia?
Some advantages of forming an LLP in Georgia include limited liability protection, flexibility in management, no double taxation, and potential tax benefits.
How many partners are required to form an LLP in Georgia?
In Georgia, two or more partners are required to form an LLP.
Can a foreign-based company form an LLP in Georgia?
Yes, a foreign-based company can form an LLP in Georgia by following the same process as domestic companies.
Do all partners have to be residents of Georgia to form an LLP in the state?
No, not all partners have to be residents of Georgia to form an LLP in the state.
What is the process for forming an LLP in Georgia?
To form an LLP in Georgia, partners must file a registration with the Office of Secretary of State and complete other formalities required under Georgia law.
Is a registered agent required for an LLP in Georgia?
Yes, an LLP in Georgia is required to have a registered agent who is a resident of the state.
Can an LLP in Georgia convert to another entity type?
Yes, an LLP in Georgia can convert to another entity type, such as a corporation or a limited liability company.
What are the filing fees for forming an LLP in Georgia?
The filing fee for forming an LLP in Georgia is $100.
Can an LLP in Georgia have employees?
Yes, an LLP in Georgia can have employees.
How is an LLP’s name chosen in Georgia?
In Georgia, an LLP’s name must not be the same or similar to any other entity’s name on record with the Office of Secretary of State.
Is there a requirement to have a certain type of insurance when forming an LLP in Georgia?
No, there is no requirement to have a certain type of insurance when forming an LLP in Georgia.
Can an LLP in Georgia have silent partners?
Yes, an LLP in Georgia can have silent partners who do not participate in the daily operation of the business.
What is the liability limit for partners in an LLP formed in Georgia?
The liability limit for partners in an LLP formed in Georgia is limited to the capital contributions they make to the business.
Can partners in an LLP formed in Georgia contribute varied amounts of capital?
Yes, partners in an LLP formed in Georgia can contribute varied amounts of capital.
What is required to dissolve an LLP in Georgia?
To dissolve an LLP in Georgia, partners must file a Certificate of Dissolution with the Office of Secretary of State.
Can an LLP continue to operate indefinitely in Georgia?
Yes, an LLP in Georgia can continue to operate indefinitely as long as the partners wish to do so.
Are LLP agreements required in Georgia?
Yes, partnership agreements are required for LLPs formed in Georgia.
What should be included in an LLP agreement in Georgia?
An LLP agreement in Georgia should include the names of partners, capital contributions, distribution of profits and losses, and management responsibilities.
Is an attorney or accountant required to form an LLP in Georgia?
No, an attorney or accountant is not required to form an LLP in Georgia.
Do partners in an LLP formed in Georgia have voting rights?
Yes, partners in an LLP formed in Georgia have voting rights.
What happens if a partner in an LLP formed in Georgia declares bankruptcy?
If a partner in an LLP formed in Georgia declares bankruptcy, their share of the business is treated as an asset to be used towards paying off the bankruptcy’s debts.
Is an annual report required from an LLP formed in Georgia?
Yes, an annual report is required from an LLP formed in Georgia.
What is the deadline for an annual report from an LLP in Georgia?
The deadline for an annual report from an LLP in Georgia is April 1.
Is it possible to adopt a doing-business-as (DBA) name for an LLP formed in Georgia?
Yes, it is possible to adopt a DBA name for an LLP formed in Georgia.
Is it possible to change the name of an LLP formed in Georgia?
Yes, it is possible to change the name of an LLP formed in Georgia by filing the proper paperwork with the Office of Secretary of State.
How can I find out if a particular name for an LLP is available?
The Office of Secretary of State provides a free online database to check for the availability of names for an LLP in Georgia.
Are annual meetings required for partners in an LLP formed in Georgia?
Annual meetings are not required for partners in an LLP formed in Georgia, but partners may choose to hold them.

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Conclusion

Starting an LLP in Georgia may seem daunting, but you can successfully establish and run your business with thorough research, planning, and compliance with legal requirements. Feel free to seek professional assistance from legal or financial advisors when needed to ensure your Limited Liability Partnership’s smooth operation and growth in Georgia.

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