When it comes to business, you can talk to lawyers who work in a couple of different spheres. Litigation lawyers specifically work in the world of lawsuits, and can help answer questions and represent you in court if someone is suing your business or if you feel the need to sue someone else on behalf of your company.
Transactional attorneys generally don’t see the courtroom. Instead, they work behind the scenes, doing the research and drafting the documents that bring things to life. Their main work involves research, writing, negotiating agreements, and giving legal advice. While there may be a little bit of overlap between the two, most business attorneys will work either on one side or the other.
- How Do You Start a Small Business in Georgia?
- What Legal Structure Should I Use?
- What Should I Name My Business?
- What Paperwork Should I File to Create and Register My Business?
- What Do I Need to Know About Taxes and Insurance?
- Do I Need a Business License?
- Contract Law in Georgia
- How Do I Sue for Breach of Contract in Georgia?
- What Happens in Small Claims Court?
- Should I Hire a Georgia Business Lawyer to Help Me?
Once you’ve done the background work of figuring out just what your business is going to do, you need to set up the legal entity for your business so that you can get to work. Georgia does have a specific process for starting businesses, and you may find it helpful to talk to a small business lawyer in order to make sure you’ve done everything that you need to.
What form your business takes can have implications for taxes, liability protection, and potential financing (if you need it). The different ways to structure your business include:
- Sole Proprietorship: When you go off to start your own business on your own, you may be a sole proprietorship at first. Sole proprietorships are owned and managed by one person, and the owner is personally liable for all debts of the business. There is no real separation between the individual and the business in a sole proprietorship.
- Partnership: Partnerships involve two or more partners who go into business together for profit. In a general partnership, there are no limits to liability — all partners are personally liable for all the debts of the business.
- Limited Partnership: A limited partnership (sometimes called an LP) also involves two or more partners, but is slightly different when it comes to liability. At least one of the partners (called the limited partner) is personally liable only up to the amount that they invested in the business (thus limiting their liability). The other partner (the general partner) is personally liable for the debts of the business.
- Limited Liability Company (LLC): A limited liability company combines the limited liability benefits of a corporation with the management and tax structures of a partnership. Members of the LLC generally are not personally liable for the debts of the business.
- Corporation: A corporation is a legal entity owned by shareholders, with the corporate entity itself being legally liable for the company’s debts. The shareholders are generally not liable for the debts or actions of the corporation. Unlike other business entities, corporations have officers and boards of directors that help to run the company.
There are also different types of corporations depending on the type of business and the tax structure that the business needs: C Corporations, S Corporations, Professional Corporations, and Non-Profit Corporations. If you decide to structure your business as a corporation, you may find it helpful to consult a small business lawyer to determine the best option for your business.
Building your brand starts with naming your business. However, there is a little bit more to picking a name than deciding on one that sounds good. You should also check with the Georgia Secretary of State’s office to determine whether the business name you want is available (i.e., not already in use by someone else) and that it is indistinguishable from other businesses. If another business already has a name that sounds close to yours, you may need to choose another name to avoid confusion.
If your business is a sole proprietorship or a partnership, and you are using a name other than the names of the individuals involved, you will need to file a form that indicates the name of the business and the names of the business owners. This form is sometimes called a DBA or “doing business as” affidavit and should be filed with the superior court in the county where your business is located. For example, Sam Smith is an independent plumber, but he calls his business “Peachtree Plumbing.” Sam would need to file a DBA with the superior court so that Peachtree Plumbing is registered under his name.
The paperwork needed to create your business depends on the business structure that you have selected. If you are a sole proprietor, or a member of a general partnership, there is no need to file any paperwork (with the exception of the DBA, if it’s necessary).
If you are forming a limited partnership, you will need to file a Certificate of Limited Partnership with the superior court in the county of the partnership’s principal place of business. If your limited partnership does business in multiple counties, you’ll need to file the certificate in every county where you do business.
For an LLC, you will need to file Articles of Organization with the Georgia Secretary of State’s office and appoint a registered agent for service of process. An Operating Agreement, which outlines the basic rights and obligations of the members of the LLC, is not required, but it is recommended.
For a corporation, you will need to file Articles of Incorporation with the Secretary of State’s office and appoint a registered agent for service of process. Corporate bylaws, which set out the rules and regulations that govern how the business is run and what the members’ responsibilities are, are not required. However, it is recommended to have written bylaws in order to operate your corporation efficiently and prevent potential disputes.
If you are establishing an S Corporation, you will need to file additional forms with the IRS in order to be taxed appropriately.
Now that you’ve established your business and filed the appropriate paperwork with the Secretary of State’s office, you will need to consider taxes. If your business is going to be selling goods, you will need to register with the Georgia Department of Revenue in order to collect the appropriate sales tax for your sales. If you have employees, you will also need to register with the Georgia Department of Revenue to report wage information and pay any employer withholding taxes.
Businesses that have employees or that are taxes separately from individual people will also need to file a form with the IRS to obtain an Employer Identification Number (called an EIN). This is not necessary for every single business, but it can be a good thing to have — many times, banks will require an EIN in order to set up a bank account in the business name.
Insurance is something to consider in order to protect yourself and your business from accidents and mistakes. If you have three or more employees, you will be required to carry worker’s compensation insurance, regardless of how many hours those employees work.
There is no overarching State of Georgia business license that is required in order to do business in the state. However, some cities and municipalities may require a business license or other regulatory permit in order for you to get started.
Some professions and services such as accountants, home inspectors, landscapers, plumbers and others require professional licensing. Certain industries, such as daycares, food service, and others may also require specific business licenses.
A contract is the lifeblood of business. It’s basically an agreement between parties that creates a legal obligation for them to do certain things, such as render a payment or deliver an order of goods.
Not every contract needs to be in writing to be enforceable (although it’s a really good idea to have your agreements in writing). However, there are certain types of contracts that must be in writing in order to be enforceable, including real estate contracts, prenuptial agreements, and any commitments to lend money. If the contract concerns work that will take over a year to complete, then the contract must be in writing to be enforceable.
If you are dealing with a breach of contract situation, there are statutes of limitations that you must be mindful of. After the time period for the statute of limitations has passed, any lawsuit for breach of contract will be barred — so make sure you keep an eye on the clock.
The Georgia statute of limitations (filing deadline) for breach of an oral contract is four years. For a written contract, the statute of limitations is six years.
The value of the contract also determines whether you should sue in small claims court (also called “magistrate court”) or superior court. Superior court is the main trial court in the state of Georgia, and hears a variety of cases, both criminal and civil. Superior court will have jurisdiction for breach of contract claims where the damages are over $15,000.
Generally, recovery in small claims is limited to money damages of $15,000 or less. In small claims court, you will present your case in court without a lawyer, and the case is heard and decided by a judge without a jury. You may find it helpful to consult a Georgia lawyer for advice on which court your case belongs in.
To file a claim for breach of contract in small claims court you need to take several steps, which may include:
- Filing Paperwork: File a Statement of Claim form with the small claims division of district court in the county where the defendant is located. Make sure you have the defendant’s correct legal name and contact information. You will also be asked to provide copies of all relevant documents to support your claim, like contracts, receipts, emails, or canceled checks;
- Filing Fee: A filing fee will be required at the time you submit your claim;
- Defendant Notice: The court will serve the defendant with a copy of the claim and a summons to appear in court. In most cases, the defendant has 30 days to give an answer to the claim or file a counterclaim;
- Hearing Date: After the defendant files their answer, the court will set a hearing date — usually between 15 and 30 days after the defendant’s answer is filed;
- Prepare for Hearing: Collect all the documents that are relevant to your case, and make extra copies for the judge and the defendant. If you want to call witnesses at the hearing, contact them and let them know the date and time; and
- Present Your Case: When you appear in court, you will be notified when it is time to present your claim. Be prepared to present your claim against the defendant in your own words, question witnesses (if witnesses are needed, it is your responsibility to make sure they come to the hearing), and present any evidence that you have.
Some counties require mediation before the hearing, in an attempt to settle the case before trial. If you can’t agree on a settlement, the judge will explain courtroom procedures at the hearing and then hear the arguments. Keep in mind that both parties will have a chance to present their side of the case at the hearing.
If the defendant failed to file an answer or fails to appear at the hearing, the plaintiff may ask the court to grant a default judgment, entitling the plaintiff to the money damages specified in the original claim, plus court costs.
Whether you are starting your own business, running your own business, or concerned about a breach of contract claim, you want to make sure that you have the best possible information. It is in your best interests to talk to an experienced Georgia business attorney for advice tailored to your specific situation.
A Georgia lawyer can help you determine the risks, benefits, and process associated with starting your business, and help represent you in court if necessary for a breach of contract action.