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What business structure should you use in Georgia?

On Behalf of | Mar 23, 2021 | Business Law |

When you’re setting up a business in Georgia, you need to think about what type of structure is best. A sole proprietorship is the most common type of business structure but also the riskiest for your personal property and assets.

Limited liability company

With an LLC, your personal property and assets aren’t at risk; only your interest in the business is liable. Any debt that you personally guaranteed for the business, however, is still your personal responsibility. You can use this business structure either as an individual or with partners. Unlike a sole proprietorship that has no administrative requirements, an LLC has operation rules to follow. Make sure that you understand federal and state laws to avoid business litigation over mismanagement.

General partnership

A general partnership consists of two or more co-owners. In general, death or withdrawal of a partner will dissolve the partnership, but you can register it again. You need to write a partnership agreement to clarify what will happen if a partner withdraws, how the partners will resolve disagreements and other key details related to agreeable operation of the business. A partnership agreement isn’t legally required, but it’s in your best interest to prevent major headaches when conflict arises.

Limited partnership

If you have partners who want to invest in the company but don’t want control of the company as co-owners, you can set up your business as a limited partnership. Limited partners can invest in the business without personal responsibility for the partnership’s debts and obligations.


In a corporation, you have three different groups of people: shareholders, directors and officers. Shareholders own the company and elect the directors. Usually, all three aspects of the corporation aren’t personally liable for company debts. Corporations are subject to double taxation unless they are an S corporation. You can’t have more than 75 shareholders in order to structure your business as an S corporation.

What business structure is best for you depends on your unique situation. You’re not stuck in one type of business structure if you decide a different type is better later on. An attorney familiar with business law may help you evaluate your options.

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