Starting a Professional Corporation in Georgia 2024: Ultimate Guide

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How to Start a Professional Corporation in Georgia

Licensed professional? Level up your business with Georgia professional corporation! Enjoy unique benefits like Georgia LLC, such as limited liability, tax perks, and a polished image. Our step-by-step guide unravels the essentials for smooth compliance and the right fit. LLCBase has your back with expert guidance, so make an informed decision and triumph in Georgia with your professional corporation today!

This guide will review the requirements for starting a professional corporation in Georgia, explore the advantages and disadvantages of this business structure, and help you determine if it is the right fit for your business goals.

Start a Professional Corporation

What is a Professional Corporation

A Professional Corporation (P.C.) is a unique type of corporation designed for licensed professionals, such as doctors, dentists, lawyers, architects, and accountants. Forming a P.C. allows licensed professionals to offer their services through a corporate structure, providing them with the benefits of a traditional corporation, such as limited liability protection and tax advantages. Forming a professional corporation in Georgia is a popular choice due to the thriving professional landscape and business-friendly environment. When starting a professional corporation, choose a reliable formation service in Georgia.

The primary purpose of Georgia Professional Corporation is to protect its owners from personal liability for the corporation’s actions. The shareholders’ personal assets are protected if the professional corporation faces legal issues. Moreover, Georgia professional corporations can offer certain tax benefits, such as deducting employee benefits and operating expenses. These advantages make forming a professional corporation an attractive option for many professionals in Georgia.

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Who Can File Under Professional Corporation Laws

Under Georgia Professional Corporation laws, only certain licensed professionals are eligible to form a professional corporation. The specific professions allowed to form a P.C. may vary slightly by state, but in Georgia, the following professionals can typically form a professional corporation:

  • Physicians and Surgeons
  • Dentists
  • Chiropractors
  • Optometrists
  • Podiatrists
  • Certified Public Accountants
  • Architects
  • Engineers and Land Surveyors
  • Psychologists
  • Marriage and Family Therapists
  • Clinical Social Workers
  • Professional Clinical Counselors
  • Veterinarians
  • Attorneys
  • Speech-Language Pathologists
  • Pharmacists
  • Registered Nurses
  • Physical Therapists
  • Occupational Therapists
  • Acupuncturists

Each profession has its governing licensing board, which sets specific rules and regulations for forming and operating a professional corporation. It is essential to check with the relevant board and state laws to ensure that your profession is eligible to form a professional corporation and to understand the specific requirements associated with your profession.

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Structure of a Professional Corporation

  • Shareholders: Georgia Professional Corporation’s shareholders must be licensed professionals in the same field as the corporation’s purpose. For example, if a professional corporation is formed to offer legal services, all shareholders must be licensed attorneys. This requirement ensures that the professional corporation’s management comprises qualified individuals with relevant expertise.
  • Directors: The directors of a professional corporation in Georgia are responsible for overseeing the corporation’s operations and making high-level decisions. The directors must also be licensed professionals in the same field as the corporation’s purpose. The number of directors required depends on the specific licensing board’s regulations, but typically a minimum of one director is needed.
  • Officers: The officers of Georgia Professional Corporation manage the professional corporation. Officers typically include a President, Secretary, and Treasurer. However, additional officers can be appointed as needed. While not all officers must be licensed professionals, the President must hold a valid license in the same field as the corporation’s purpose.

Starting a Professional Corporation in Georgia: A Guide

Here is a detailed guide to starting a professional corporation in Georgia that you should follow.

Step 1: Appointment of Registered Agent

The first step in forming a Professional Corporation is appointing Registered Agent in Georgia. This individual or company will act on behalf of the corporation, receiving official notices and legal documents. The agent must have a physical address in Georgia and be available during regular business hours.

We compiled the list of the best registered agent services in Georgia to help you choose the one you can rely on.

Step 2: Choosing the Name of the Corporation

Selecting a name for your Georgia Professional Corporation is crucial. The name must be unique and appropriate, including the words “professional corporation” or the abbreviation “P.C.” It must also comply with the rules and regulations of the governing licensing board and should not be confusingly similar to an existing corporation’s name.

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Step 3: Drafting of By-laws

By-laws are the internal rules and regulations governing the management and operations of the professional corporation. These should include provisions related to the appointment of directors, issuance of shares, and any restrictions imposed by the licensing board.

Step 4: Appointment of Board of Directors

The board of directors oversees the management and operations of the Georgia Professional Corporation. Directors must be licensed professionals in the same field as the corporation’s purpose.

Step 5: Conduction of Board Meetings

Regular board meetings are essential for maintaining the proper functioning and compliance of the professional corporation. The by-laws should specify the frequency, notice requirements, and procedures for conducting these meetings.

Step 6: Issuance of Corporate Shares

Shares represent ownership in the corporation. The professional corporation must issue shares to its shareholders, who must be licensed professionals in the same field. Share issuance should comply with the by-laws and any restrictions imposed by the licensing board.

Step 7: Comply with State Requirements

Forming Georgia Professional Corporation requires compliance with specific state requirements, such as obtaining necessary permits and licenses, paying fees, and adhering to rules and regulations the governing licensing board sets forth.

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Step 8: Filing of Statement of Information

Georgia professional corporations must file an annual report with the Georgia Secretary of State. This document includes essential information about the corporation, including its name, address, Registered Agent, and directors.

Step 9: Getting Tax Permits from the State

The professional corporation must obtain the necessary tax permits from the Georgia Department of Revenue, such as an Employer Identification Number (EIN) from the Internal Revenue Service (IRS).

Step 10: Opening of a Bank Account

Finally, open a separate bank account for the Georgia Professional Corporation to maintain proper accounting and financial records.

Fees Associated with Professional Corporation in Georgia

Here are some of the most common fees when starting a professional corporation in Georgia.

  • State Laws and Regulations: To form a professional corporation in Georgia, it is crucial to comply with the state laws and regulations governing professional corporations. The Georgia Code Title 14 and the specific licensing board’s regulations for each profession outline the requirements and restrictions for professional corporation formation. Before starting the process, professionals should consult with their licensing board to ensure they meet the necessary qualifications.
  • Incorporation Process: Once the licensing requirements are met, the next step to form a professional corporation in Georgia is to draft and file the Articles of Incorporation with the Georgia Secretary of State. This document includes essential information about the corporation, such as its name, address, purpose, and number of authorized shares. Filing the Articles of Incorporation requires a filing fee currently $100 for most professions. However, it is essential to check with the Georgia Secretary of State for the specific fee associated with your profession.
  • Naming Requirements: You must follow specific rules when choosing a name for a Professional Corporation in Georgia. The name must include the words “Professional Corporation,” “P.C.,” or “Prof. Corp.” Additionally, the name cannot be misleading or too similar to an existing corporation’s name. Conducting a name search with the Georgia Secretary of State is recommended to ensure the chosen name is available. This search is free, but reserving a name before filing the Articles of Incorporation requires a reservation fee of $25 online and $25 mail.
  • Articles of Incorporation: The Articles of Incorporation is a critical document for forming a professional corporation in Georgia. It outlines the corporation’s essential information, such as the name, address, purpose, and number of authorized shares. The Articles must also include a statement that the corporation is a professional corporation and the specific profession it practices. Once completed, the Articles of Incorporation must be filed with the Georgia Secretary of State, accompanied by the appropriate filing fee.
  • Additional Fees and Costs: In addition to the filing fees mentioned above, forming Professional Corporation in Georgia may involve other costs, such as:
    • Annual Report: professional corporations must file an initial Statement of Information with the Georgia Secretary of State every April 1st of filing the Articles of Incorporation. The filing fee for this form is $5.
    • Licensing and Permit Fees: Depending on the specific profession, the governing licensing board may require additional licensing and permit fees.
    • Registered Agent Fee: Hiring of Registered Agent service will likely involve an annual fee of $50 – $150, which can vary depending on the service provider.
    • Legal and Accounting Fees: Forming a professional corporation may involve consulting with attorneys and accountants, which can result in additional professional fees.

Advantages of a Professional Corporation

  • Limited Liability Protection: One of the main benefits of a professional corporation is its limited liability protection to its shareholders. This means the shareholders’ assets are protected from the corporation’s debts and liabilities.
  • Tax Benefits: Professional Corporations enjoy specific tax benefits, such as deductions for business expenses and the ability to retain earnings within the corporation.
  • Business Credibility: Operating as a professional corporation can enhance the credibility and reputation of the professional services, demonstrating a commitment to compliance and professionalism.
  • Continuity of Operations: A professional corporation has a perpetual existence, ensuring the continuity of operations even if the shareholders or directors change.

Disadvantages of a Professional Corporation

  • Complexity and Cost of Formation: Forming a professional corporation can be more complex and costly than other business structures, such as sole proprietorships or partnerships.
  • Ongoing Compliance Requirements: professional corporations must adhere to ongoing compliance requirements, including regular board meetings, filing annual reports, and maintaining proper records.
  • Limited Flexibility in Management: professional corporations may need more flexibility in management, as the board of directors must consist of licensed professionals in the same field.

Taxation of Professional Corporations

Here are the taxes that your professional corporation must pay in Georgia:

Federal income tax

A professional corporation in Georgia is subject to federal income tax on its net earnings. However, a P.C. can elect to be taxed as an S corporation, which allows the corporation’s income, deductions, and credits to pass through to the shareholders. This can result in significant tax savings by avoiding double taxation.

State taxes

Georgia Professional Corporation is also subject to state taxes, such as the Georgia franchise tax, which is based on the corporation’s annual net income. Additionally, depending on the nature of its operations, the professional corporation may be subject to other state and local taxes, such as payroll and sales taxes permit in Georgia.

Tax deductions and exemptions

A professional corporation in Georgia can take advantage of various tax deductions and exemptions, such as deductions for employee benefits, operating expenses, and depreciation. These deductions can help reduce the corporation’s taxable income, ultimately leading to tax savings for the P.C. and its shareholders.

Alternatives to Professional Corporations in Georgia

If you decide that a professional corporation is not for you, then you might consider the following alternatives.

  • Sole Proprietorships: A simpler business structure is where an individual operates the business under their name without limited liability protection.
  • Partnerships: Two or more individuals join to operate a business, sharing profits, losses, and responsibilities.
  • Limited Liability Companies (LLCs): A hybrid business structure that combines the limited liability protection of a corporation with the tax benefits and flexibility of a partnership.
  • S-corporations: Starting an S Corp in Georgia avoids double taxation by allowing income, losses, and deductions to pass through to the shareholders’ personal tax returns.

FAQs

What is a professional corporation in Georgia?
A professional corporation (PC) in Georgia is a type of business formation designed specifically for professionals who require a state license to practice, such as attorneys, doctors, and accountants.
How do I know if I qualify for a professional corporation in Georgia?
You may qualify for a professional corporation in Georgia if you are a licensed professional in a field that requires a state license, such as a doctor, lawyer, or accountant.
What type of license is required to start a professional corporation in Georgia?
To start a professional corporation in Georgia, you must have a state license to practice in your field, as well as any other relevant certifications or permits.
Do I need to have a separate office space to start a professional corporation in Georgia?
You may not need a separate office space to start a professional corporation in Georgia, but it depends on the requirements of your field and the type of services you offer.
Can a professional corporation in Georgia operate remotely?
Yes, a professional corporation can operate remotely in Georgia. However, you must comply with any state or local regulations and licensing requirements.
Does the Georgia Secretary of State offer a Professional Corporation Formation service?
Yes, the Georgia Secretary of State offers a Professional Corporation Formation service. You can also form a PC through an attorney, legal service provider, or third-party filing service.
Can foreign professionals start a professional corporation in Georgia?
Yes, foreign professionals can start a professional corporation in Georgia if they have a state license to practice in their field and comply with any additional requirements.
What type of fees am I required to pay the state when forming a Professional Corporation in Georgia?
Fees for forming a professional corporation in Georgia typically include incorporating fees, processing fees, and other miscellaneous expenses. These fees may vary depending on the type of business formation and the services you require.
How long does it take to form a Professional Corporation in Georgia?
The timeframe for forming a professional corporation in Georgia can vary depending on the complexity of the business structure and the processing times of the Georgia Secretary of State.
Do I need a lawyer to form a professional corporation in Georgia?
While you can form a professional corporation in Georgia without a lawyer, it is often recommended for legal services, guidance, and compliance advice.
How many members are required to start a professional corporation in Georgia?
In Georgia, at least one member is required to start a professional corporation.
Are professional corporations required to pay Georgia state taxes?
Professional corporations located in Georgia are subject to state taxes and must pay taxes for income earned within the state.
Can professional corporations in Georgia apply for tax breaks or credits?
Depending on the business model and state regulations, professional corporations might be eligible for federal and state tax credits in Georgia.
Are there any restrictions on the types of professional corporations I can start in Georgia?
In Georgia, certain professions and services require special registration requirements. As such, it is essential to verify your business model with appropriate legislators or members before completion of the set-up procedure.
Do professional corporations in Georgia have additional insurance requirements?
In Georgia, some professions such as surgeons and lawyers need to acquire more comprehensive insurance compared to other industries and standard corporation forms.
Are professional corporations in Georgia required to have a board of directors?
Depending on the type of professional corporation in Georgia, the law can obligate the formation of a board of directors.
Is it possible for out-of-state professional corporations to do business in Georgia?
Out of the state professional corporations that hope to do business in Georgia need to register with the appropriate federal agencies.
Do I require an operating agreement to form a professional corporation in Georgia?
No. Georgian Legal protocol does not oblige the judiciary to issue an operating agreement to complete the registration process, but we would highly recommend documentation of operating protocols and formation documents to avoid subsequent problems.
Are there any biannual financial statement filings required for professional corporations in Georgia?
In Georgia, bylaws can require filings of financial expenditure and receipts with the corporation’s residents and any outside federal regulatory agencies or especially for monitored industries.
Can Georgia professional corporations hire additional business owners or prohibit them?
Once registered and, potentially, board member’s approval provide permission, owners’ proportion of equity and investment may be raised, even for third parties and potentially expanding the board of directors for larger corporations.
Are there residency requirements for board members or officers for a Georgian Professional Corporation?
Georgian Law recognizes a qualified resident of employment office requirements of professional corporations.
Are the rules on the types of portfolio ventures in my professional corporation in Georgia particular on special registrations or qualifying of interested individuals?
A few conditions and disclosures must be obtained before particular owners of corporate stock shares, models of incentives, or portfolio venture receptions are allowed to engage.
Can a Georgia Professional Corporation provide services outside of its industry due legally?
At present, the corporations do their operation visibly, although judicial precedence precede non-specialized processes licensing or significant interstate interaction licenses usually reserved.
To continue to operate my APC in Georgia, Do I need to renew or file state accountings?
Every fourteen years, Georgia requires renewals for your acts of service. Moreover, filings with certain state regulators, for instance, Boards of Licensure, and regularly scheduled transactional filings.
Is there an option/policy in Georgia where a to-be-professionals Corporation may who prefer not to incorporate be exempt from requirements?
In Georgia all professionals must meet state requirements and status conditions to regain licensing – there are numerous means to assemble practice statutes, although non-incorporation employment only conveys a predetermined measure of individual liability protection compared to a corporate environment.
Have there been amendments to incorporate processes in light of the COVID-19 pandemic and subsequent health and safety protocols?
As safety procedures normally shift during exceptional health events and state law adjusts accordinaly permiting digital filings and teleconferencing registrations.
Who can form a professional corporation in Georgia?
Any licensed professional who wants to incorporate their business in Georgia can form a professional corporation.
Can a non-professional own a part of the stock in a Georgia professional corporation?
No, only licensed professionals are allowed to own stock in a Georgia professional corporation.
How many licensed professionals are required to form a professional corporation in Georgia?
In Georgia, at least one licensed professional is required to form a professional corporation.
Are there any limitations on the number of shareholders in a professional corporation in Georgia?
In Georgia, there is no limitation on the number of shareholders in a professional corporation.
Is there a minimum capital requirement for starting a professional corporation in Georgia?
No, there is no minimum capital requirement in Georgia.
Is it necessary to file articles of incorporation with the State of Georgia to start a professional corporation?
Yes, articles of incorporation must be filed with the Secretary of State of Georgia to start a professional corporation.
Do I need to choose a name for my professional corporation before filing articles of incorporation in Georgia?
Yes, you need to choose a name for your professional corporation before filing articles of incorporation in Georgia.
Can I reserve a name for my professional corporation in Georgia?
Yes, you can reserve a name for your professional corporation in Georgia by filing a Name Reservation Request with the Secretary of State of Georgia.
Do I need to have a physical address in Georgia to start a professional corporation?
Yes, you need to have a physical address in Georgia to start a professional corporation.
How long does it take to incorporate a professional corporation in Georgia?
It takes about 5-7 business days to incorporate a professional corporation in Georgia after articles of incorporation have been properly filed with the Secretary of State.
What are the annual requirements for a professional corporation in Georgia?
In Georgia, all professional corporations are required to file annual reports with the Secretary of State.
Do professional corporations in Georgia require a business license?
Yes, professional corporations in Georgia require a business license.
Do I need to obtain a tax ID number for my professional corporation in Georgia?
Yes, you need to obtain a tax ID number for your professional corporation in Georgia.
Is it necessary to have a registered agent for a professional corporation in Georgia?
Yes, it is necessary to have a registered agent for a professional corporation in Georgia.
Can I act as my own registered agent for my professional corporation in Georgia?
Yes, you can act as your own registered agent for your professional corporation in Georgia.
Can I change the directors and officers of my professional corporation in Georgia after formation?
Yes, you can change the directors and officers of your professional corporation in Georgia after formation.
Can I merge my professional corporation with another corporation in Georgia?
Yes, you can merge your professional corporation with another corporation in Georgia.
Is there any amendment form available in Georgia to change the information of previously registered corporation?
Yes, there is an amendment form available in Georgia to change the information of a previously registered corporation.
What is the fee to file articles of incorporation in Georgia?
The fee to file articles of incorporation in Georgia is $100.
Is there a standard form that is used to file articles of incorporation in Georgia?
Yes, the Georgia Secretary of State has a standard form for articles of incorporation.
Do I need to include bylaws when filing articles of incorporation in Georgia?
No, you don’t need to include bylaws when filing articles of incorporation in Georgia.
Can I file for a delayed effective date when incorporating a professional corporation in Georgia?
Yes, you can file for a delayed effective date when incorporating a professional corporation in Georgia.
Can I apply for expedited processing of my professional corporation formation in Georgia?
Yes, you can apply for expedited processing of your professional corporation formation in Georgia by paying an additional fee.
Do I need to file for a certificate of authority if I want to do business outside of Georgia with my professional corporation?
Yes, you need to file for a certificate of authority if you want to do business outside of Georgia with your professional corporation.
Is it possible to form a professional limited liability company (PLLC) instead of a professional corporation?
Yes, it is possible to form a professional limited liability company instead of a professional corporation in Georgia.
Do professional corporations require a business license to do business within local municipalities in Georgia?
Yes, professional corporations require a business license to do business within local municipalities in Georgia.
Is there any alternate method of filing incorporation acknowledgement specified by Georgia Secretary of State?
Yes, Georgia Secretary of State provides eCorp facility where an applicant can transact with ease.
Can two different licensed professions act as combined registered agents in one professional corporation in Georgia?
No, professional corporations in Georgia should designate only a single registered agent as per the provisions specified.

Also Read

How to Save Money While Forming Georgia Professional Corporation

First and foremost, entrepreneurs should do thorough research on the different options available for forming a professional corporation in Georgia. From choosing the right legal structure to determining the suitable business licenses and permits required, it’s essential to understand all the necessary steps involved in the process. By educating oneself on these aspects, entrepreneurs can avoid unnecessary expenses and streamline the formation process.

Another way to save money when forming a Georgia professional corporation is to take advantage of online resources and DIY tools. Many online platforms offer affordable solutions for setting up a professional corporation, including document preparation services, legal advice, and filing assistance. Using these online resources can help entrepreneurs save money on professional fees and paperwork, while still ensuring compliance with Georgia state laws.

Networking and seeking advice from other professionals who have gone through the process of forming a professional corporation in Georgia can also be a cost-effective way to navigate the formation process. By connecting with industry peers, attending workshops, or joining business associations, entrepreneurs can gain valuable insights and tips on saving money during the formation process. Building a support network can also provide access to referrals for affordable legal services and other resources needed for forming a professional corporation.

Additionally, entrepreneurs should consider using free or low-cost business tools and software to manage various aspects of their professional corporation. From accounting and bookkeeping software to project management tools and collaboration platforms, there are numerous cost-effective solutions available to help streamline business operations and save money on administrative expenses. Using these tools can also help entrepreneurs track expenses, manage cash flow, and make informed decisions to optimize their finances.

Finally, entrepreneurs should prioritize budgeting and financial planning throughout the formation process of their professional corporation. By setting realistic financial goals, creating a budget, and monitoring expenses, entrepreneurs can ensure that they stay within their means and avoid overspending. Financial planning can also help entrepreneurs identify potential areas for cost savings and make informed decisions on where to allocate resources effectively.

In conclusion, forming a professional corporation in Georgia doesn’t have to break the bank. By doing thorough research, leveraging online resources, networking with other professionals, using cost-effective tools, and prioritizing financial planning, entrepreneurs can save money while setting up their business for success. With the right approach, entrepreneurs can achieve their goals of forming a professional corporation in Georgia without compromising on quality or compliance.

Conclusion

Georgia Professional Corporation can offer several benefits for licensed professionals. However, it is essential to carefully consider the proper structure and compliance requirements before proceeding. Seeking professional guidance in forming a professional corporation can help ensure a smooth process and enable professionals to focus on providing their services. Visit LLCBase for more information about starting a professional corporation in Georgia.

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