How to Set up a Sole Proprietorship in Georgia
Create a business plan., Decide if you will operate your business under your own name or under a "trade name.", Publish an announcement of your Georgia trade name in the local paper for 2 weeks., Apply for Georgia business tax collection, sometimes...
Step-by-Step Guide
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Step 1: Create a business plan.
This is an important step for any new business, since it helps you to organize expenses, debts, marketing, employees and more.
Since certain license agreements are only good for a limited time, you should make sure you are ready to begin operating as a business before filing the paperwork. -
Step 2: Decide if you will operate your business under your own name or under a "trade name."
Since a sole proprietorship and the person who operates it are considered the same, you will not need to file any forms if you choose to use only your name as listed on your tax return.
If you want to name your business, then you must file your trade name with the Clerk of Superior Court in the county where you plan to do business.
For example, if a man plans to offer contractual tax filing help, he could choose to do business as simply "Michael D.
Peterson" without filing paperwork.
If he plans to name his services "Michael Peterson Tax Services," then he would need to register his name in the county.
Search for expired and existing trade names at Corp.sos.state.ga.us.
Registering a trade name on the state, county or city level does not reserve it or prevent its use by another entity.
However, it is a good idea not to duplicate names to avoid confusion or lost business.
To find the appropriate trade name form, you can visit your county clerk of court website.
Search with the terms "clerk of superior court" and your county in Georgia.
Find the "Businesses" section or look for a link listing civil forms.
You can also request and file the form by visiting your County Clerk of Court office.
Fill out the application with your personal details and details about your business.
Pay the fee to file a trade name.
Prices and acceptable forms of payment vary depending upon the county; however, most counties charge between $130 and $175 to file a trade name. , Inquire about the acceptable publications through the County Clerk of Court office.
There is a fee between $20 and $100 associated with publishing these newspaper ads.
Inquire at your local Chamber of Commerce or City/County Clerk's office as to the local licensing that is required for your business.
This depends highly on the type of business that you will be involved in.
Georgia.gov lists the occupations that must be licensed by a state board under the "Employment" and "Licensing" section of the website. , Common tax collection licenses include sales, property, alcohol and tobacco, motor fuel, compliance, local government distributions and withholding tax. , This will create a separate account for tax filing and it is given at no cost.
Some sole proprietors who do not have employees also choose to apply for an EIN to reduce their risk of identity theft associated with social security number use. , This is an optional step, especially if you do not intend to have a trade name or an EIN.
However, it can help to separate the assets of a sole proprietorship more clearly.
You will need to bring your trade name registration with you in order to start a bank account under an assumed business name. , This is a Georgia state requirement.
You can go online and compare worker's compensation insurance quotes from leading private insurance companies.
Research other business insurance options.
The main disadvantage with being a Georgia sole proprietor is that you and your business are considered the same, so your personal assets can be seized in the case of a lawsuit or debt collection.
Liability insurance can protect your personal assets. , These sites will also tell you how to process tax withholding. , Use your taxable income amount on your Georgia state income tax return.
You will be required to pay federal self-employment tax.
This accounts for your contributions to federal programs like social security and Medicare.
In 2011, the federal self-employment tax rate was
13.3 percent.
However, you can deduct half of that percentage when you calculate your adjusted gross income.
Also, only $106,800 that you earn is subject to this tax. -
Step 3: Publish an announcement of your Georgia trade name in the local paper for 2 weeks.
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Step 4: Apply for Georgia business tax collection
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Step 5: sometimes called business licenses
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Step 6: or zoning permits with the county that are deemed necessary to operate your business.
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Step 7: Apply for a federal Employee Identification Number (EIN) if you plan to have employees.
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Step 8: Apply for a bank account.
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Step 9: Apply for worker's compensation insurance if you intend to have 3 or more employees.
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Step 10: Report new hires on the IRS website and at Georgia's new hire reporting website
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Step 11: Newhire-reporting.com/GA-Newhire.
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Step 12: Report your earnings on your personal IRS Form 1040
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Step 13: Schedule C. Consult IRS Publication 535 for a list of business expenses that you can also report on this form.
Detailed Guide
This is an important step for any new business, since it helps you to organize expenses, debts, marketing, employees and more.
Since certain license agreements are only good for a limited time, you should make sure you are ready to begin operating as a business before filing the paperwork.
Since a sole proprietorship and the person who operates it are considered the same, you will not need to file any forms if you choose to use only your name as listed on your tax return.
If you want to name your business, then you must file your trade name with the Clerk of Superior Court in the county where you plan to do business.
For example, if a man plans to offer contractual tax filing help, he could choose to do business as simply "Michael D.
Peterson" without filing paperwork.
If he plans to name his services "Michael Peterson Tax Services," then he would need to register his name in the county.
Search for expired and existing trade names at Corp.sos.state.ga.us.
Registering a trade name on the state, county or city level does not reserve it or prevent its use by another entity.
However, it is a good idea not to duplicate names to avoid confusion or lost business.
To find the appropriate trade name form, you can visit your county clerk of court website.
Search with the terms "clerk of superior court" and your county in Georgia.
Find the "Businesses" section or look for a link listing civil forms.
You can also request and file the form by visiting your County Clerk of Court office.
Fill out the application with your personal details and details about your business.
Pay the fee to file a trade name.
Prices and acceptable forms of payment vary depending upon the county; however, most counties charge between $130 and $175 to file a trade name. , Inquire about the acceptable publications through the County Clerk of Court office.
There is a fee between $20 and $100 associated with publishing these newspaper ads.
Inquire at your local Chamber of Commerce or City/County Clerk's office as to the local licensing that is required for your business.
This depends highly on the type of business that you will be involved in.
Georgia.gov lists the occupations that must be licensed by a state board under the "Employment" and "Licensing" section of the website. , Common tax collection licenses include sales, property, alcohol and tobacco, motor fuel, compliance, local government distributions and withholding tax. , This will create a separate account for tax filing and it is given at no cost.
Some sole proprietors who do not have employees also choose to apply for an EIN to reduce their risk of identity theft associated with social security number use. , This is an optional step, especially if you do not intend to have a trade name or an EIN.
However, it can help to separate the assets of a sole proprietorship more clearly.
You will need to bring your trade name registration with you in order to start a bank account under an assumed business name. , This is a Georgia state requirement.
You can go online and compare worker's compensation insurance quotes from leading private insurance companies.
Research other business insurance options.
The main disadvantage with being a Georgia sole proprietor is that you and your business are considered the same, so your personal assets can be seized in the case of a lawsuit or debt collection.
Liability insurance can protect your personal assets. , These sites will also tell you how to process tax withholding. , Use your taxable income amount on your Georgia state income tax return.
You will be required to pay federal self-employment tax.
This accounts for your contributions to federal programs like social security and Medicare.
In 2011, the federal self-employment tax rate was
13.3 percent.
However, you can deduct half of that percentage when you calculate your adjusted gross income.
Also, only $106,800 that you earn is subject to this tax.
About the Author
Samantha Lewis
Creates helpful guides on DIY projects to inspire and educate readers.
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