With an economy that’s the 6th fastest growing in the United States, Georgia prides itself on having a business environment that’s among the friendliest in the nation. The state offers a vast array of tax credits, tax exemptions and development programs designed to draw businesses of all sizes and forms, from innovative startups to industry heavy-hitters.

Even in Georgia’s pro-business environment, getting down to the actual nuts and bolts of owning and operating a business can frustrate even the most seasoned of entrepreneurs. It’s not just the usual opportunities and challenges that make it difficult to know where you stand. Whether its business structures, wages or contracts, legal aspects of owning your business can also prove daunting at times and things can get complicated pretty quickly.

Fortunately, we’re here to shed some light on Georgia’s legal landscape. Here’s what to expect in the Peach State whether you’re a new small business owner or a seasoned owner of a much larger business looking to relocate.

Understanding Employment Law

Georgia’s employment laws aren’t much different from other states. Nevertheless, having a firm grasp of the nuances will help you avoid various pitfalls and keep your business on top of its game. The Georgia Department of Labor has a more comprehensive rundown of its various employment laws, but here are a few basic aspects to keep in mind as a Georgia business owner.

Minimum Wage and Overtime Pay

Georgia is among 30 U.S. states that set their own minimum wage rate. As of 2024, the current rate is set at $5.15 per hour. However, this rate only applies to employers under the following exemplary conditions:

● Five or fewer employees

● Sales under $40,000 per year

● Farm owners, land renters or sharecroppers

● Those who hire domestic employees, minors, high school or college students

● Tipped workers and newspaper carriers

Otherwise, Georgia follows the current Federal minimum wage rate of $7.25 per hour. Business owners in Georgia must pay their employees that amount for non-overtime hours worked unless they’re tipped employees or qualify for other exemptions. The state also follows federal guidelines for overtime wage rates, which are set at 1.5 times the employee’s regular rate for each hour worked beyond 40 hours in a typical work week.

Georgia lacks statewide pay transparency laws, but such laws may exist on a more local level. For instance, the city of Atlanta enacted a law prohibiting city agencies from requesting salary histories from job applicants.

New Hire Reporting

Georgia requires all businesses to report all newly hired and rehired employees to the Georgia New Hire Reporting Center. This allows both the state and federal government to keep track of employment numbers as well as the unemployment rate. Businesses must report all hired and rehired employees within 10 days of their hire date. This applies whether they’re full-time, part-time or temporary employees.

Anti-Discrimination Laws

In addition to federal anti-discrimination laws, Georgia also has its own law in place: the Georgia Fair Employment Practices Act of 1978. Much in the same spirit as federal anti-discrimination laws, Georgia’s also makes it unlawful for state agencies to discriminate based on a variety of factors, including age, race, colour, sex, national origin, disabilities and relation. The Georgia Commission on Equal Opportunity conducts enforcement through its investigation of unlawful discrimination claims.

Choosing and Forming Your Business Entity Structure

Size matters, but what matters more in the business world is structure. Or, more to the point, how a business is structured. Most businesses in Georgia will fall into one of the following structures:

● Sole Proprietorship – This structure is ideal for small businesses in low-risk industries as well as new businesses looking to test out their ideas. A sole proprietorship gives you total control over your business, but you’re also personally liable for all business debts and obligations. Some also find it more difficult to get business loans as a sole proprietor.

● Partnership – This structure works for those getting into business with one or more partners. There are various kinds of partnerships with limited partnerships (LP) and limited liability partnerships (LLP) being the most common.

● Limited Liability Company – As the name implies, an LLC limits your personal liability for your business, keeping your personal assets including your home and savings accounts shielded from lawsuits or bankruptcy.

●      Corporation – This structure offers the benefits of an LLC but with a few benefits that go beyond those offered by LLCs. Not only are corporations completely separate from their owners, but shareholders can also enter and exit the business while leaving the structure itself intact.

Choosing LLC as a business structure makes sense for small and medium-sized business owners who need the liability protection offered by an LLC structure, but without the onerous requirements for establishing and maintaining corporations. However, business owners who want more control over profits and a better chance of attracting outside investment should consider a corporation as a business structure.

Whichever structure you choose, the next step in its formation involves a filing with the Georgia Secretary of State Corporations Division. The Corporations Division acts as a custodian of records, lacking any ability to arbitrate between those involved in business disputes.

Obtaining Relevant Licenses and Permits

You’ll also need the right permits and licenses to do business in the state of Georgia. If you’re opening a business that sells alcoholic beverages or tobacco, for example, you’ll need the relevant license before you’re able to conduct business. If you plan to have any type of coin-operated amusement machine on the premises, you’ll also need licenses and stickers for each machine present.

Certain professions also require licensing. The Professional Licensing Boards Division oversees licensing for a broad range of professions, ranging from land surveying and electrical contracting to long-term care, nursing, barbers and cosmetologists.

Knowing Your Way Around Revenue and Taxation

Tax collection isn’t glamorous, but it’s certainly a necessity for any business operating in the state of Georgia. In addition to collecting state, county and local sales taxes, you may also be responsible for collecting other fees and surcharges depending on the type of business.

Any business with employees that’s subject to withholding taxes must also receive a withholding number from the Georgia Department of Revenue. This step allows for the prompt and accurate remit of Georgia payroll taxes.

When it comes to running any type of business, navigating legal labyrinths are the last thing you look forward to. However, having a clear understanding of the legal landscape not only preserves your business but also makes it more profitable in the long run.