Georgia LLC Operating AgreementThe Georgia LLC Act, the 30-day dissociation rule, and a tightening flat-tax regime
The 30-Day Dissociation Rule
O.C.G.A. § 14-11-602 provides that a member may dissociate from a Georgia LLC by giving 30 days' written notice to the LLC, unless the operating agreement provides otherwise. After dissociation, the member ceases to have any voting rights or management authority, but retains the right to receive distributions of the allocable share of the dissociated interest. The dissociated member becomes an "assignee" rather than a member.
The 30-day default is unusually short. Most state LLC statutes either prohibit unilateral dissociation or require longer notice (90 days is common). The Georgia rule means that a single member of a multi-member LLC can effectively walk away with 30 days' notice, leaving the remaining members with an assignee who receives distributions but has no operational role.
For most Georgia LLCs, the operating agreement should override this default. Common alternatives include: prohibit unilateral dissociation entirely; require 90 or 180 days' notice; require unanimous consent of remaining members for any voluntary dissociation; or pair dissociation with a mandatory buyout at a specified valuation. Without one of these overrides, the LLC structure is brittle.
Default Rules Under O.C.G.A. § 14-11
| Topic | Default Rule | Statute |
|---|---|---|
| Profit allocation | Per-capita (equal among members) | O.C.G.A. § 14-11-403 |
| Voting | Per-capita (one vote per member) | O.C.G.A. § 14-11-308 |
| Management | Member-managed unless Articles state manager-managed | O.C.G.A. § 14-11-301 |
| Member admission | Unanimous consent of existing members | O.C.G.A. § 14-11-503 |
| Distributions | Equal among members; on member request | O.C.G.A. § 14-11-405 |
| Member dissociation | Permitted with 30 days' notice | O.C.G.A. § 14-11-602 |
| Dissolution | Majority of members in interest unless agreement requires more | O.C.G.A. § 14-11-603 |
The per-capita default for both profit allocation and voting is the standard RULLCA pattern, even though Georgia has not formally adopted RULLCA. With unequal capital contributions, capital-weighted treatment must be expressly written into the operating agreement.
Sample Georgia-Specific Clauses
Forming a Georgia LLC: The Five Steps
- Choose and check a name. Search the Georgia Corporations Division business name database. Names must include "Limited Liability Company", "LLC", or "L.L.C."
- Appoint a registered agent. Required under O.C.G.A. § 14-11-209. Must have a Georgia physical street address.
- File Articles of Organization with Transmittal Form. $100 fee online ($110 mail). Filed with the Georgia Corporations Division.
- Adopt the operating agreement, including a 30-day dissociation override. Standard practice; the dissociation override is unusually important in Georgia.
- Obtain EIN and calendar the 1 April annual registration. EIN free from the IRS. First annual registration due between 1 January and 1 April of the year following formation.
Five Georgia-Specific Mistakes
The default 30-day notice is unusually short. Always override with 90 days plus mandatory buyout.
Late filing triggers a $25 penalty and potential administrative dissolution. Calendar 1 March as the personal deadline.
The Articles of Organization must be filed together with the Transmittal Form (Form CD 030). Filing only the Articles results in rejection.
O.C.G.A. § 14-11-403 splits profits equally regardless of capital. Capital-weighted allocation must be written in expressly.
5.49% flat individual rate applies to pass-through LLC income. Members in higher-tax states pay additional home-state tax on Georgia LLC income.
Statutory Sources
- Georgia Limited Liability Company Act, O.C.G.A. § 14-11, official text
- Georgia Secretary of State Corporations Division, LLC formation and registration
- Georgia Department of Revenue, individual and corporate income tax