Do I Have to Register My Business in Georgia? And What Happens If I Don't?

Most businesses operating in Georgia need to register with the Georgia Secretary of State and comply with annual registration requirements.  Corporations, limited liabilities companies (LLCs), limited partnerships (LPs), limited liability partnerships (LLPs), and professional corporations (PCs) must register with the Secretary of State.  Additionally, corporate entities formed in another state or country must register with the Georgia Secretary of State for authorization to transact business in Georgia.  As part of registration, entities provide a company name and principal office address, registered agent and address, and other business information.  See §§ O.C.G.A. 14-2-1622, 14-9-206.5.

If your business is a sole proprietorship or other type of entity that does not have to register with the Georgia Secretary of State, or your registered business does business under a separate trade name, then you must register the trade name with the clerk of the superior court in the county where you primarily conduct business unless the trade name discloses individual ownership of the business. O.C.G.A. § 10-1-490.  Registration includes the name and addresses of the owners and nature of the business.  There are no annual renewal requirements, but you'll need to update if ownership changes.

Failure to comply with registration requirements does not prohibit a company from conducting business in Georgia.  However, there may be administrative, legal and practical consequences for failing to register. 

Administrative and legal consequences

The primary purpose of registration requirements is to ensure compliance with Georgia laws rather than nullify or prohibit business operations.  A company’s failure to register may subject the company to penalties but does not prohibit the company from operating in Georgia or render its contracts void.  The penalties are higher for foreign entities doing business in Georgia. Foreign entities are subject to a $500 civil penalty for failing to register with the Georgia Secretary of State within 30 days of commencing business in Georgia.  O.C.G.A. §§ 14-2-122, 14-11-711.  An unregistered foreign entity is also barred from maintaining a lawsuit in Georgia courts until it obtains a certificate of authorization.  O.C.G.A. §§ 14-11-702, 14-2-1501. In addition, any business operating under an unregistered trade name may be liable for court costs if it initiates a lawsuit without registration.  O.C.G.A. § 10-1-491. 

Perhaps more importantly, where a corporation or LLC fails to register as a legal entity, the individuals or partners conducting business may be personally liable for debts and obligations as well as any judgments arising from business operations.  An agent acting on behalf of an invalid corporate entity will also be personally bound by obligations undertaken on behalf of the entity.  See Zuberi v. Gimbert, 230 Ga. App. 471, 473 (1998); Don Swann Sales Corp. v. Echols, 160 Ga. App. 539, 541-42 (1981).

In partnerships, generally all partners are jointly and severally liable for debts, obligations and liabilities of the partnership, regardless whether the partnership is registered.  However, in a limited liability partnership (LLP), partners are generally not personally liable except for their own wrongful acts or omissions, unless otherwise agreed among the partners.  O.C.G.A. § 14-8-15.  Failure to register an LLP may impact this benefit. 

Practical consequences

A company’s failure to register as a legal entity, or comply with annual registration requirements, may appear unsophisticated or unstable and cause concern or raise red flags for those looking to do business with the company.  It may also create administrative and operational challenges in opening business accounts, obtaining insurance, and complying with other governmental requirements. 

For these reasons, if you are entering into a new relationship with a business, it is always a good idea to confirm if they are registered with the Secretary of State and/or have a registered trade name before making any commitments.  If any problems should arise down the road, dealing with an unregistered legal entity often presents additional procedural challenges such as lack of a registered agent for service and other notices. 

If you need assistance with corporate registration or with corporate liability or governance issues, contact Melissa Ewing at melissa@theewingfirm.com to schedule a consult for more information.