Legal Guide to            Doing Business in            Georgia                                                     June 20...
Disclaimer ..................................................................................................................
The Federal Trade Commission Act ................................................................................ 14      ...
Trade Names..................................................................................................................
Georgia Trade Development Foreign Offices ...................................................................................
DisclaimerPLEASE NOTE: The information contained in this guide is for general reference only anddiscusses certain laws app...
IntroductionGeographyThe State of Georgia, the tenth largest state in the country and the largest state east ofthe Mississ...
and its transportation infrastructure, and also such industries as technology, agriculture,manufacturing, and forestry.The...
operations in Georgia, customized to each employer’s specific needs and focusing onentry-level job skills. The Department ...
Business EntitiesCorporationsAdministrative AgencyBusiness corporations, nonprofit corporations, professional corporations...
incorporator, and the corporation’s initial principal mailing address. An incorporatornamed in the Articles of Incorporati...
Annual ReportsEvery Georgia corporation must annually register with the Secretary of State. The initialregistration must b...
Limited PartnershipsGeorgia has adopted its own Revised Uniform Limited Partnership Act (“GRULPA”) basedupon, but with sig...
Limited Liability CompaniesFormationThe Georgia Limited Liability Company Act (O.C.G.A. § 14-11-100 et seq.) regulates the...
or transfer of all or a substantial amount of its assets requires the unanimous vote orconsent of the members. (O.C.G.A. §...
transacting business in Georgia, thereby exempting the LLC from registering with theSecretary of State (for examples of su...
information can be found in Internal Revenue Service Publication 557, located athttp://www.irs.ustreas.gov or by calling t...
the licensing relationship, unless by reason of the facts and circumstances it is deemed toconstitute a "business opportun...
Trade RegulationFederal Trade RegulationThe Sherman and Clayton ActsThe Sherman Act, passed in 1890, prohibits all contrac...
State Antitrust LawNo Georgia state statute provides a private cause of action for damages for antitrustactivity; however,...
TaxationFederal Income TaxationPersonal Income TaxUnited States citizens and resident aliens must pay federal personal inc...
federal tax credit of 15% of the qualified wages paid during a calendar year, up to a$10,000 wage limit per employee per c...
Corporate Net Worth (License) TaxGeorgia’s annual tax on net worth (capital stock + retained earnings) is called a license...
equipment used for pollution control and solar energy systems used for heating, cooling,or drying.Inventory TaxIn some Geo...
LaborFederal ConsiderationsImmigrationA variety of United States permanent and temporary visas allow domestic employers to...
•   F-1 and F-2 Academic Student VisasIndividuals pursuing an F Academic Visa must both petition the Bureau of            ...
obtained for spouses and minor children (under twenty-one years of age) of J-1       visa holders. J-2 individuals may wor...
employees for each working day in each of twenty or more calendar weeks in the currentor preceding calendar year.Fair Labo...
Title VII of the Civil Rights Act of 1964 (“Title VII”)Title VII, administered and enforced by the Equal Employment Opport...
Periodic reports evidencing such insurance are required with the State Board of WorkersCompensation (O.C.G.A. § 34-9-1 et ...
Child Labor ActSupplementing the Federal Fair Labor Standards Act, Georgia’s Child Labor Act requiresthat individuals seve...
EnvironmentalFederal ConsiderationsResource Conservation and Recovery Act (“RCRA”)The RCRA, and its subsequent amendments,...
stratospheric ozone protection and acid rain control were added to the CAA in 1990. TheCAA uses a permit system, administe...
The Georgia Water Quality Control Act (O.C.G.A. § 12-5-20 et seq.) works in conjunctionwith the Federal Clean Water Act to...
Intellectual PropertyCopyrightsCopyrights protect original, intellectual literary, artistic, musical, or dramatic workprod...
of the county where the business operates. (O.C.G.A. § 10-1-490.) Trade names are alsosometimes referred to as “DBAs” or “...
Dispute ResolutionFederal Court SystemThe United States Constitution authorizes the Legislative Branch (the United StatesC...
Doing Business in Georgia Guidance File
Doing Business in Georgia Guidance File
Doing Business in Georgia Guidance File
Doing Business in Georgia Guidance File
Doing Business in Georgia Guidance File
Doing Business in Georgia Guidance File
Doing Business in Georgia Guidance File
Doing Business in Georgia Guidance File
Doing Business in Georgia Guidance File
Doing Business in Georgia Guidance File
Doing Business in Georgia Guidance File
Doing Business in Georgia Guidance File
Doing Business in Georgia Guidance File
Doing Business in Georgia Guidance File
Doing Business in Georgia Guidance File
Doing Business in Georgia Guidance File
Doing Business in Georgia Guidance File
Doing Business in Georgia Guidance File
Doing Business in Georgia Guidance File
Doing Business in Georgia Guidance File
Doing Business in Georgia Guidance File
Doing Business in Georgia Guidance File
Doing Business in Georgia Guidance File
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Doing Business in Georgia Guidance File

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This document explains brief legal guidelines to do business in the State of Georgia. It helps people to avoid mistakes and follow through all required matters to open up and run small business.

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Doing Business in Georgia Guidance File

  1. 1. Legal Guide to Doing Business in Georgia June 2006ATLANTA CHARLOTTE NEW YORKOne Atlantic Center Bank of America Plaza 90 Park Avenue1201 West Peachtree Street 101 S. Tryon Street, Suite 4000 New York, NY 10016Atlanta, GA 30309-3424 Charlotte, NC 28280-4000 212-210-9400404-881-7000 704-444-1000RESEARCH TRIANGLE WASHINGTON, DC3201 Beechleaf Court The Atlantic BuildingSuite 600 950 F Street, NWRaleigh, NC 27604-1062 Washington, D.C. 20004-2601919-862-2200 202-756-3300 www.alston.com
  2. 2. Disclaimer ............................................................................................................................................. 1Introduction ......................................................................................................................................... 2 Geography.................................................................................................................................. 2 Demographics ............................................................................................................................. 2 Economy ..................................................................................................................................... 2 Educational Institutions ............................................................................................................... 4Business Entities .................................................................................................................................. 5 Corporations ............................................................................................................................... 5 Administrative Agency..................................................................................................... 5 State of Incorporation ..................................................................................................... 5 Corporate Formation ....................................................................................................... 5 Articles of Incorporation.................................................................................................. 5 Name .............................................................................................................................. 6 Bylaws ............................................................................................................................ 6 Share Capital.................................................................................................................. 6 Meetings of Shareholders and Directors ........................................................................... 6 Limited Liability............................................................................................................... 6 Annual Reports................................................................................................................ 7 Taxation.......................................................................................................................... 7 Partnerships................................................................................................................................ 7 General Partnerships ....................................................................................................... 7 Limited Partnerships........................................................................................................ 8 Limited Liability Partnerships ........................................................................................... 8 Limited Liability Companies ......................................................................................................... 9 Formation ....................................................................................................................... 9 Name .............................................................................................................................. 9 Managers and Members................................................................................................... 9 Contributions and Distributions...................................................................................... 10 Annual Reports.............................................................................................................. 10 Foreign Limited Liability Corporations ............................................................................ 10 Sole Proprietorship.................................................................................................................... 11 Joint Venture............................................................................................................................. 11 Nonprofit Corporations .............................................................................................................. 11 Alternative Means of Doing Business.......................................................................................... 12 Sales Representatives ................................................................................................... 12 Distributors ................................................................................................................... 12 Licensing....................................................................................................................... 12Trade Regulation ................................................................................................................................14 Federal Trade Regulation........................................................................................................... 14 The Sherman and Clayton Acts...................................................................................... 14 The Robinson-Patman Act.............................................................................................. 14 i
  3. 3. The Federal Trade Commission Act ................................................................................ 14 State Trade Regulation.............................................................................................................. 14 Warranties.................................................................................................................... 14 State Antitrust Law........................................................................................................ 15 Unfair and Deceptive Trade Practices/Consumer Protection ............................................ 15Taxation..............................................................................................................................................16 Federal Income Taxation ........................................................................................................... 16 Personal Income Tax..................................................................................................... 16 Corporate Income Tax................................................................................................... 16 Federal Tax Benefits...................................................................................................... 16 State Taxation........................................................................................................................... 17 Personal Income Tax..................................................................................................... 17 Corporate Income Tax................................................................................................... 17Labor ...................................................................................................................................................20 Federal Considerations .............................................................................................................. 20 Immigration .................................................................................................................. 20 Labor and Employment Statutes................................................................................................ 22 Age Discrimination in Employment Act (“ADEA”)............................................................ 22 Americans with Disabilities Act (“ADA”) ......................................................................... 22 Fair Labor Standards Act (“FLSA”)................................................................................. 23 Equal Pay Act (“EPA”).................................................................................................... 23 Family and Medical Leave Act (“FMLA”).......................................................................... 23 National Labor Relations Act .......................................................................................... 23 Occupational Safety & Health Act (“OSHA”)................................................................... 23 Title VII of the Civil Rights Act of 1964 (“Title VII”)........................................................ 24 Employee Benefits......................................................................................................... 24 State Considerations ................................................................................................................. 24 Georgia Labor Laws....................................................................................................... 24 Labor Unions................................................................................................................. 25 Child Labor Act.............................................................................................................. 26Environmental ....................................................................................................................................27 Federal Considerations .............................................................................................................. 27 Resource Conservation and Recovery Act (“RCRA”)........................................................ 27 Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”)... 27 Clean Air Act (“CAA”) .................................................................................................... 27 Clean Water Act (“CWA”)............................................................................................... 28 State Considerations ................................................................................................................. 28Intellectual Property .........................................................................................................................30 Copyrights ................................................................................................................................ 30 Patents ..................................................................................................................................... 30 Trademarks and Service Marks.................................................................................................. 30 ii
  4. 4. Trade Names............................................................................................................................. 30 Trade Secrets............................................................................................................................ 31Dispute Resolution .............................................................................................................................32 Federal Court System................................................................................................................ 32 State Court System................................................................................................................... 34 Inferior State Courts ..................................................................................................... 34 Superior Court .............................................................................................................. 35 Court of Appeals............................................................................................................ 35 Supreme Court.............................................................................................................. 36 Arbitration and Mediation in Georgia .......................................................................................... 36Financing Investments......................................................................................................................38 Tax-Exempt Financing ............................................................................................................... 38 Federal Securities Law............................................................................................................... 38 Securities Act of 1933 ................................................................................................... 38 Securities Exchange Act of 1934.................................................................................... 38 Sarbanes Oxley Act of 2002........................................................................................... 39 State Securities Law.................................................................................................................. 39 Georgia Securities Act ................................................................................................... 39Real Estate ..........................................................................................................................................41 Agricultural Foreign Investment Disclosure Act (“AFIDA”) .......................................................... 41 International Investment and Trade in Services Survey Act (“IITSSA”)....................................... 41 Foreign Investment Real Property Tax Act (“FIRPTA”)................................................................ 42 State Real Estate Statutes......................................................................................................... 42Miscellaneous .....................................................................................................................................43 Qualification Requirements........................................................................................................ 43 Registration Requirements......................................................................................................... 44 Local Requirements....................................................................................................... 44 State Requirements....................................................................................................... 45 Federal Requirements.................................................................................................... 46 Applicability of Usury Laws ........................................................................................................ 47 Restrictions on Specific Professions............................................................................................ 47 Business Name Registration Requirements................................................................................. 47 Incentives ................................................................................................................................. 47State Agencies....................................................................................................................................49 Georgia Department of Agriculture ............................................................................................ 49 Georg ia Department of Banking and Finance.............................................................................. 49 Georgia Department of Community Affairs................................................................................. 49 Georgia Council of Juvenile Court Judges ................................................................................... 50 Georgia Court of Appeals ........................................................................................................... 50 Georgia Board of Regents {Higher Education} ........................................................................... 52 iii
  5. 5. Georgia Trade Development Foreign Offices ...................................................................................54 Brazil ........................................................................................................................................ 54 Europe ...................................................................................................................................... 54 Korea........................................................................................................................................ 54 Mexico ...................................................................................................................................... 55 United Kingdom......................................................................................................................... 55 iv
  6. 6. DisclaimerPLEASE NOTE: The information contained in this guide is for general reference only anddiscusses certain laws applicable to doing business in Georgia as of January 2006. Thispublication should not be relied upon in any specific factual or legal situation, does notcreate an attorney-client relationship, and does not cover all laws or regulations that maybe applicable in all circumstances. Readers of this guide should seek independentprofessional advice from a lawyer authorized to practice in Georgia before proceeding toinvest or do business in Georgia. 1
  7. 7. IntroductionGeographyThe State of Georgia, the tenth largest state in the country and the largest state east ofthe Mississippi River, covers 59,441 sq. mi. (153,952 sq. km.) and lies in the country’ssoutheastern quadrant, between the 31st and 35th degrees of north latitude in the easternstandard time zone.Georg ia is geographically divided into six physiographic zones. The northern part of thestate consists of the Blue Ridge Province, the Ridge and Valley Province, and theAppalachian Plateaus. Mountains, lakes, and mixed forests cover this area of the state.Brasstown Bald Mountain, the highest point in the state at 4,784 feet (1,458 meters), islocated in this region. Central Georgia consists of the Piedmont zone, characterized byrolling upland hills, much like Stone Mountain, which is located outside of the Capital Cityof Atlanta. The southern portion of the state consists of the Atlantic and Gulf CoastalPlains. Characterized by flat lands and salt marshes, this Georgia region is home to theOkefenokee Swamp and the deep-water port cities of Savannah a nd Brunswick.Georgia’s climate is humid and subtropical, with mean annual temperatures between 60°and 70° Fahrenheit (15° and 21° Celsius), and mean annual precipitation between 40 and60 inches (102 to 152 centimeters). While the Georgia mountains receive light snowseveral times a year, the vast majority of the state rarely experiences snow fall.DemographicsGeorgia’s population has grown by over twenty-five percent during the past decade.Georgia, with a total population of 8,581,489 residents, s currently the ninth most ipopulous state in the nation. In 2000, the state’s demographic diversity included Whites(65.1%); Blacks (28.7%); Hispanics (5.3%); Asians (2.1%); Native Americans (0.3%);and Native Hawaiians and other Pacific Islanders (0.1%). About half of Georgia’spopulation lives in metropolitan Atlanta while the other half is widely distributedthroughout the State. Seventy-eight percent of Georgians are high school graduates andover twenty-four percent possess a bachelor’s degree or higher.EconomyGeorgia has a strong, diverse, and vibrant business community. The fourth fastestgrowing state, Georgia has consistently provided a progressive, stable environment forboth the domestic and foreign financial entities. The state maintains a Standard andPoor’s rating of AA+, a Moody’s AAA credit rating, and a Finch’s AAA rating. Moreover,Georgia aggressively solicits foreign investment through a wide array of tax incentives,budgetary policies, and financial assistance programs. The sta te invests in its workforce 2
  8. 8. and its transportation infrastructure, and also such industries as technology, agriculture,manufacturing, and forestry.The Georgia Department of Economic Development provides assistance in thedevelopment of international business and trade opportunities, joint ventures, licensing,and other business matters. Major international trade partners with Georgia include:Canada, Japan, Mexico, Germany, the United Kingdom, Ireland, and China. Fifty-twogovernments from throughout the world maintain consular offices and/or traderepresentation in Atlanta. Additionally, thirty-one bi-national Chambers of Commercereside in Atlanta. Finally, three general-purpose Foreign Trade Zones in Atlanta,Brunswick, and Savannah permit users to delay, reduce, and sometimes eliminate U.S.customs duties on imports.With an eye on the future, Georgia heavily invests in technology. The first fiber-opticcable was manufactured in Georgia and now the state has become the transmission hubfor the country’s two largest fiber-optic trunk routes through its 500,000 miles ofunderground fiber-optic cable. The state also supports a variety of public and privateindustry, government, and university partnerships in technology, including the YamacrawProject (which encourages the design of broadband communications systems, devices, andchips) and the Georgia Centers for Advanced Telecommunications Technology (which is aresearch center that supports new product development and recent technology companystart-ups).Georgia’s economy also includes a strong foundation in the agricultural and livestockproduction, manufacturing, and forestry industries. Georgia leads all states in theproduction of broilers (i.e., young chickens raised for meat), peanuts, and p ecans.Manufacturing and forestry also provide the states with its primary economic activities.Centered around the cities of Augusta, Columbus, Macon, Rome, Savannah, and Atlanta,Georgia’s manufacturing and forestry centers provide the world with a vast array ofessential goods, such as paper, timber, textiles, turpentine, and transportation equipment.Georgia is the 12th largest exporting state in the country, grossing $19.6 billion from itsindustries’ exports in 2004.Many of the world’s largest and most influential companies have chosen to do business inGeorgia. In fact, seventeen Fortune 500 and thirty Fortune 1000 companies haveheadquarters in Georgia. Georgia -grown companies include Coca-Cola, CNN/TurnerBroadcasting, and The Home Depot. Other companies based in Georgia are PhilipsElectronics, United Parcel Service (UPS), AFLAC, Delta Airlines, Porsche North America,Pirelli Tire North America, Gulf Stream Aerospace, Siemens Energy & Automation,Earthlink, and Intercontinental Hotels & Resorts.Helping these companies achieve success is Georgia’s 4.29 million person workforce. Aright-to-work state, Georgia provides a diverse, well-educated workforce trained at solvingthe challenges of business in the 21st century. The Quick Start employee training programprovides free training services to businesses opening new facilities or expanding existing 3
  9. 9. operations in Georgia, customized to each employer’s specific needs and focusing onentry-level job skills. The Department of Labor complements this service by offeringprospective employers free employee screenings at its offices throughout the state.Georgia’s workers have assisted the state in becoming one of the top ten states fortechnology employment and have given Atlanta the second largest population with acollege degree in the United States.Facilitating Georgia’s businesses is an expansive transportation network. Atlanta’sHartsfield-Jackson International Airport, the world’s busiest passenger airport, servesmore than 83 million passengers annually. More than 500 direct flights to citiesthroughout North America, Latin America, Europe, and Asia fly from Hartsfield-JacksonInternational Airport every day. Georgia also maintains two of the largest air cargobuildings in the world (with an area of 415,000 and 390,000 square feet, respectively), aswell as 216,000 and 60,000 square feet facilities. Georgia’s ground transportation systemincludes 1,244 miles of interstate highways and 18,000 miles of federal and statehighways that connect the state to the rest of the nation and two major rail systems, CSXand Norfolk Southern Corporation, who together maintain 5,200 miles of track in the state(the largest track system in the Southeast). Finally, the Port of Savannah is the largestcontainer port in the Southern United States and is the fastest growing port in the country.These land, air, and water transportation networks allow eighty percent of domesticcustomers to be reached in 2 hours of air travel or less from Georgia. Similarly, overeighty percent of the domestic industrial market may be reached by truck within two daysfrom Georgia.Educational InstitutionsGeorgia is home to over seventy public colleges, universities, and technical colleges. Theoldest state -chartered university in the United States, the University of Georgia, is locatedin Athens, Georgia. Other major state -supported institutions include the Georgia Instituteof Technology in Atlanta, the Medical College of Georgia in Augusta, and Georgia StateUniversity in Atlanta. Forty-five nationally known and respected private colleges anduniversities also are located in Georgia, including Atlanta’s Emory University, OglethorpeUniversity, and Atlanta University Center (a consortium of historically black institutionsincluding Morehouse College, Morris Brown College, and Spelman College), as well asMacon’s Mercer University. 4
  10. 10. Business EntitiesCorporationsAdministrative AgencyBusiness corporations, nonprofit corporations, professional corporations, limitedpartnerships, limited liability partnerships, and limited liability companies are required toregister and file reports with the Corporations Division of the Georgia Secretary of State,located on the plaza level of the James H. Floyd Veterans Memorial Building, 315 WestTower, #2 Martin Luther King, Jr. Drive, Atlanta, Georgia 30334-1530.State of IncorporationState statutes regulate public and private corporations in the U.S. Georgia’s BusinessCorporation Code (O.C.G.A. § 14-2-101 et seq.), adopted in 1988, was modeled on the1984 Revised Model Business Corporation Act, as amended, and portions of the DelawareGeneral Corporation Law. The Corporate Code Revision Committee of the Corporate andBanking Section of the State Bar of Georgia monitors changes in United States corporationlaw to assure that Georgia maintains a modern business corporation law.Corporate FormationA Georgia company may be formed by submitting an original and one copy of its Articlesof Incorporation, a completed Transmittal Form 227, and a $100.00 filing fee to theCorporations Division of the Georgia Secretary of State. Articles of Incorporation areeffective on the date received by the Corporations Division unless a post-effective date isspecified. Forms and a sample Articles of Incorporation may be obtained at the GeorgiaSecretary of State’s website located at http://www.georgiacorporations.org.All corporations must also publicize a notice of intent to incorporate in the newspaper thatis the legal organ for the county they are registering as their initial office of thecorporation or in a newspaper of general circulation in a county where at least sixtypercent of the subscriptions are paid. The notice and the $40.00 publication fee must besent to the newspaper no later than the next business day after filing the Articles ofIncorporation with the Secretary of State’s office. A list of authorized newspapers can beobtained from the Clerk of Superior Court.Articles of IncorporationArticles of Incorporation are considered a matter of public record. They must include at aminimum the exact name of the corporation, the number of shares the corporation isauthorized to issue, the street address and county of the initial registered office and thename of the initial regis tered agent at that office, the name and address of each 5
  11. 11. incorporator, and the corporation’s initial principal mailing address. An incorporatornamed in the Articles of Incorporation or a filing attorney may sign the document.Underneath the signature, t e signer must include the capacity in which he or she is hsigning.NameThe name of a Georgia corporation may be reserved prior to filing by accessing theSecretary of State’s website at http://www.georgiacorporations.org. Corporate namesmust contain the word “corporation,” “incorporated,” “company,” or “limited,” or theabbreviation “corp.,” “inc.,” “co.,” “ltd.,” or words or abbreviations of like nature.(O.C.G.A. § 14-2-401)BylawsBylaws help regulate the overall structure of the corporation. They typically include suchinformation as the governance structure of the corporation, the meeting structure ofshareholders and directors, the authority of the corporation’s officers, and the liability ofthe officers. The Board of Directors typically can amend bylaws, unless the provisionsamend shareholder or director authority, in which case, shareholder approval is neededprior to altering the bylaws.Share CapitalThe articles of incorporation stipulate the class of shares and the numbers of shares ofeach class that is offered by the corporation. All shares of a certain class must have thesame preferences, limitations, and relative rights. All issued shares are consideredoutstanding shares until they are reacquired, redeemed, converted, or cance led. Finally,the articles of incorporation must authorize (1) one or more classes of shares thattogether have unlimited voting rights and (2) one or more classes of shares that togethercan receive the net assets of the corporation upon dissolution. (O.C.G.A. § 14-2-601 etseq.)Meetings of Shareholders and DirectorsMeetings of both shareholders and directors may be held either within or without the stateand may be conducted in accordance with the bylaws through any means ofcommunication whereby all may hear each other simultaneously.Limited LiabilityShareholders of most corporations enjoy “limited liability,” that is, they are not liable fordebts incurred during the operation of the corporation, only for their individual amountsinvested into the corporation. The only exception to this rule is if the shareholdersspecifically agreed to be liable for such debts as stated in the articles of incorporation. 6
  12. 12. Annual ReportsEvery Georgia corporation must annually register with the Secretary of State. The initialregistration must be filed within ninety days of incorporation. Subsequent registrationsmust be submitted by April 1 of each year. Reports may be filed electronically athttp://www.georgiacorporations.org. A $30.00 filing fee must also be submitted. Failureto register annually could lead to an administrative dissolution of the corporation.Taxation“For Profit” corporations are subject to “double taxation” in Georgia. That is, thecorporation pays taxes on the income earned by the corporation and its shareholders paytaxes on the dividends earned from the corporation. S corporations, however, are notsubject to double taxation; their income is not taxed, but the income and losses of the Scorporation are “passed through” to the shareholders in relation to their ownershipinterests. S corporations are constructed by having (1) no more than seventy-fiveshareholders, (2) no shareholders who are nonresident aliens, and (3) only one class ofstock. Corporations interested in the tax benefits of an S corporation designation shouldconsult a tax professional to fully understand the advantages and disadvantages of such achange.PartnershipsGeneral PartnershipsGeorgia has adopted the Uniform Partnership Act with minor but helpful modifications.(O.C.G.A. § 14-8-1 et seq.) Partnerships consist of two or more persons, the generalpartners, who share management duties and who share in the profits of the group. Ageneral partner’s interest in the organization cannot be transferred without the consent ofthe other general partners (unless the transferred interest is only a right to profits) andupon the death of any general partner, the general partnership is dissolved. Partnershipsare common business entities because they provide a convenient taxation advantage; thatis, partnerships are not separate taxpayers for state or federal income tax purposes. Infact, partnerships are “pass-through” tax entities, making only the general partners liablefor taxation on their respective shares of general partnership income, losses, deductions,and credits. However, one disadvantage of a general partnership is that each generalpartner has joint and several unlimited personal liability for obligations of the entirepartnership. Thus, each partner may personally be indebted for the debts and obligationsof the general partnership as a whole or for another general partner. The GeorgiaSecretary of State imposes no recordkeeping or filing requirements on generalpartnerships. 7
  13. 13. Limited PartnershipsGeorgia has adopted its own Revised Uniform Limited Partnership Act (“GRULPA”) basedupon, but with significant changes from, the official version of the Revised Uniform LimitedPartnership Act (“RULPA”) adopted by the National Conference of Commissioners onUniform State Laws in 1976 and amended in 1985. (O.C.G.A. § 14-9-100 et seq.)Georgia is a common site for the creation of limited partnerships, because unlike manyother states, Georgia allows limited partners to participate in controlling the b usinesswithout becoming personally liable for the limited partnership’s obligations and debts.Limited partners may assign their respective interests in the profits of the limitedpartnership to others and the assignees may become limited partners if the limitedpartners’ agreement so provides or if all the other partners consent. General partners,likewise, have equal rights to control the business and have the power to bind the limitedpartnership into transactions with third parties. The limited partnership pays no entity-level income tax or net worth tax; instead, each partner is taxed directly for his or hershare of the limited partnership’s profits (unless the limited partnership elects to be taxedas a corporation). Likewise, individual limited partners cannot be held liable for thepartnership’s debts and obligations.Unlike general partnerships, limited partnerships must meet certain filing requirementswith the Georgia Secretary of State. To register a limited partnership, an individual mustfile with the Secretary of State an original and one copy of the group’s certificate of limitedpartnership, a completed Transmittal Form 246 (obtained from the Secretary of State’swebsite), and the $100.00 filing fee. The certificate of limited partnership must include:(1) the exact name of the limited partnership, (2) the street address and county of theinitial registered office and the name of the initial registered agent at that office, (3) thename and address of each general partner, and (4) the signatures of all general partners.Furthermore, a registered limited partnership must continue to pay an annual registrationfee of $30.00 to the Secretary of State’s office. The initial payment is due betweenJanuary 1 and April 1 of the year following the calendar year in which the limitedpartnership was formed.Limited Liability PartnershipsLimited Liability Partnerships (“LLPs”) function like general partnerships but provide extraprotections for the general partners. Such protections include personal immunity forliability arising from the negligence and wrongful acts of other partners, unless the otherpartners were under their direct supervision. Thus, a partner’s loss with respect to the LLPis limited to his or her investment into the partnership. 8
  14. 14. Limited Liability CompaniesFormationThe Georgia Limited Liability Company Act (O.C.G.A. § 14-11-100 et seq.) regulates thecreation of a limited liability company (“LLC”) in Georgia. Formation of an LLC is allowedafter one or more organizers of the LLC supply to the Georgia Secretary of Stateinformation including (1) the name and address of each organizer, (2) the street addressand county of the LLC’s initial registered office and the name of its initial registered agentat that office, and (3) the mailing address of the LLC’s principal place of business.(O.C.G.A. § 14-11-203.) An LLC must also submit an original and one copy of its articlesof organization, completed Transmittal Form 231, and its $100.00 filing fee to theCorporatio ns Division of the Georgia Secretary of State. Articles of organization areeffective on the date received by the Corporations Division unless a post-effective date isspecified. The articles of organization must include information described in O.C.G.A. §14-11-204 and be submitted on 8 ½ x 11 inch white paper and must be signed by theappropriate organizers.NameA name may be reserved prior to filing an application to create an LLC. The reservation ismade at the Corporations Division’s website at http://www.georgiacorporations.org.Names must contain the words “limited liability company” or “limited company” or theabbreviations “L.L.C.,” “LLC,” “L.C.,” or “LC.” The name must also be distinguishable fromany other name held by a Georgian LLC, corporation, or limited partnership held on recordat the Georgia Secretary of State’s office. Finally, the LLC’s name may not surpass eightycharacters, including spaces and punctuation.Managers and MembersAn LLC may be governed by either its members or selected managers. An LLC operatedby its members functions in many ways like a partnership. Each member has an equal sayin the decision-making processes of the company. (O.C.G.A. §§ 14-11-301(a) – 304.)However, the members may elect to select a manager or managers to run the LLC inmuch the same way a board of directors governs a corporation. These managers areresponsible for the daily affairs of the corporation. (O.C.G.A. §§ 14-11-301(b) – 304.)The election of managers must be stipulated for in the articles of organization. Managers,as well, do not have to be members of the LLC to be selected to their position. (O.C.G.A.§§ 14-11-304.) With either type of governance structure, there is no personal liability forthe debts and obligations of the LLC as a whole, unless members elect to becomepersonally liable through written consent in the operating agreement. (O.C.G.A. §§ 14-11-303.) Moreover, with either type of LLC, either members or managers get one voteregarding the direction of the business affairs of the company and majority rule decidesoutcomes. However, approval of the dissolution of the LLC or the sale, exchange, lease, 9
  15. 15. or transfer of all or a substantial amount of its assets requires the unanimous vote orconsent of the members. (O.C.G.A. §§ 14-11-308.)Contributions and DistributionsMembers can make contributions to the LLC. (O.C.G.A. §§ 14-11-401 et seq.) Acontribution to the capital of an LLC may be made in cash, tangible or intangible property,services rendered, or a promissory note or other obligation to contribute cash or tangibleor intangible property, or to perform services. A promise to make a contribution to thecapital of an LLC is not enforceable unless it is set out in the articles of organization or awritten operating agreement that is binding on the person to be charged or in anotherwriting signed by that person.Disbursements of members are also regulated. (O.C.G.A. § 14-11-404 et seq.) A membershall be entitled to receive distributions from an LLC before dissolution and winding up ofthe LLC only to the extent specified in the articles of organization or a written operatingagreement, or as otherwise approved by all members. Upon disassociation, however, amember is entitled to receive in reasonable time the fair value of the member’s interest inthe LLC only if disbursement does not cause the dissolution of the LLC. There are someexceptions to disbursement, such as if the LLC would not be able to pay its debts as theynormally become due or if the LLC’s total assets would be less than its liabilities. (O.C.G.A.§ 14-11-407)Annual ReportsEach LLC must file an annual registration with the Georgia Secretary of State’s office. Thefee is $30.00. The initial registration is due between January 1 and April 1 of the yearfollowing the calendar year in which the LLC was formed. The registration can be filedonline at the Georgia Secretary of State’s website (http://www.georgiacorporations.org).Foreign Limited Liability CorporationsForeign LLCs are regulated under O.C.G.A. § 14-11-702 et seq. A foreign LLC transactingbusiness in Georgia must obtain a certificate of authority from the Georgia Secretary ofState’s office. The foreign LLC must first submit an application for the certificate whichincludes the following: (1) the name of the foreign LLC, and if different, the name it willuse in Georgia; (2) the name of the jurisdiction under whose laws it is organized; (3) itsdate of organization and period of duration; (4) the street address and county of itsregistered Georgia office and its registered agent at that office; (5) a statement identifyingthe Georgia Secretary of State as its agent for service of process if the foreign LLC has notalready identified its agent; (6) the address of its principal place of business, (7) theaddress of the office at which it keeps a list of names and addresses of its members; and(8) the name and business address of a person who has substantial responsibility formanaging its business activities. Some activities of a foreign LLC do not count as 10
  16. 16. transacting business in Georgia, thereby exempting the LLC from registering with theSecretary of State (for examples of such exceptions, see O.C.G.A. § 14-11-702(b)).Sole ProprietorshipPersons conducting business alone without the protection afforded by incorporation arecalled sole proprietors. Business income is reflected on a schedule attached to theproprietor’s personal income tax returns. The proprietor may operate under a trade nameregistered in the county in which the business is carried on (to allow creditors and othersthe opportunity to learn who the owner of the business is to obtain payment on any debtsor obligations). Such registration, however, provides limited protection for exclusive useof the name, absent trademark or service mark registrations. The main disadvantage offorming a sole proprietorship is that the owner is wholly liable for all debts and obligations.All the personal and business assets of the sole proprietor can be seized to makepayments.Joint VentureA joint venture is not, as such, a specific legal form of doing business. It may be apartnership for a limited purpose or may, depending upon its form of organization, be incorporate form or evidenced only by a series of agreements. Regardless, the jointventure’s purpose is more specific than generally to carry on any business.Nonprofit CorporationsIn 1991, Georgia enacted a new Nonprofit Corporation Code, based upon its BusinessCorporation Code, with a few provisions based upon the Revised Model NonprofitCorporation Act published in 1988 (O.C.G.A. § 14-3-101 et seq.). Basic differencesbetween nonprofit and business corporations are that nonprofit corporations have noshareholders and do not have operating for profit as a purpose.Nonprofit corporations in Georgia must all submit the $100.00 filing fee, Transmittal Form227, and an original and one copy of their Articles of Incorporation to the GeorgiaSecretary of State. Articles of Incorporation for nonprofit corporations should contain thesame information as for profit corporations, except that they should include at a minimuman article that states “The corporation is organized pursuant to the Georgia NonprofitCorporation Code,” rather than a statement of the number of shares the corporation isauthorized to issue and should include a statement indicating whether or not thecorporation will have members. An example of an acceptable Articles of Incorporation canbe obtained at http://www.georgiacorporations.org.Nonprofit corporations do not automatically gain tax-exempt status under Section501(c)(3) of the Internal Revenue Service Code. Recognized entities must submit anApplication for Recognition of Exemption with the Internal Revenue Service beforesubmitting incorporation documents to the Georgia Secretary of State. Further 11
  17. 17. information can be found in Internal Revenue Service Publication 557, located athttp://www.irs.ustreas.gov or by calling the Internal Revenue Service.Alternative Means of Doing BusinessSales RepresentativesA non-resident business may act in Georgia through one or more sales representatives.The legal questions raised by this form of conducting business are first, whether theactivities of a sales representative are sufficient to require the foreign corporation whichemploys the representative to qualify with the Secretary of State to do business in Georgiaunder O.C.G.A. § 14-2-1501; and, second, whether the representatives activities aresufficient to subject the foreign corpora tion to an apportioned Georgia income tax underO.C.G.A. § 48-7-31. This latter question is generally one of either constitutional or federalstatutory dimension, because the Georgia statute is drafted with the intention ofsubjecting to an apportioned in come tax every foreign corporation that has anyconstitutionally cognizable connection with the state "for the purpose of financial profit orgain." If tangible personal property is shipped into Georgia, the presence of a salesrepresentative will require registration as a dealer for sales and use tax purposes andcollection of tax, unless a valid exemption certificate is obtained from each customer.Finally, O.C.G.A. § 10-1-700 et seq. requires that any contract between a foreigncorporation and its sales representative soliciting wholesale orders in Georgia must inwriting describe the method of computation and payment of the representatives salescommission. A covered foreign corporation is then subject to the jurisdiction of Georgiacourts for its enforcement.DistributorsWhether the activities of a distributor are sufficient to require that the foreign entity whoseproducts are being distributed qualify to do business in Georgia or pay Georgia taxes is aquestion of agency: Is the relationship of the foreign entity with the local distributor aprincipal-agent relationship (with the acts of the local agent being deemed the acts of theforeign principal under the theory of respondeat superior) or an independent-contractorrelationship (where the foreign entity is not treated as acting through the distributor)?The question is fact-intensive, answered only by determining the extent of the foreignentitys right to control the manner in which the distributor conducts its business activities.LicensingThe relationship between the grantor (licensor) and grantee (licensee) of a license, thecustomary way of transferring certain rights in intellectual property such as patents,trademarks and trade names, is ordinarily a relationship between independent contractors.Therefore, the licensor is customarily not considered to be transacting business in Georgiajust because of the presence in the state of its licensee, absent other factors suggestingthe licensors presence through agency principles of control. No aspects of state law affect 12
  18. 18. the licensing relationship, unless by reason of the facts and circumstances it is deemed toconstitute a "business opportunity," the sale of which is regulated. 13
  19. 19. Trade RegulationFederal Trade RegulationThe Sherman and Clayton ActsThe Sherman Act, passed in 1890, prohibits all contracts and corporate trusts that restrainforeign and domestic commerce. Section 1 of the Sherman Act prohibits such horizontalrestraints on trade as competitors agreeing to fix prices, agreeing to restrict output, andagreeing to allocate territories or customers. Section 1 also prohibits vertical restraints ontrade like attempts by a manufacturer to limit dealers’ territories or customers andattempts by a seller to require exclusive dealing or requirements contracts. The ClaytonAntitrust Act amended the Sherman Act in 1914. Section 7 of the Clayton Act prohibitsmonopolization and conspiracies to monopolize.The Robinson-Patman ActThe Robinson-Patman Act, passed in 1936 as an amendment to the Clayton Antitrust Act,prohibits a supplier from discriminating in price against different buyers of the same goodwhere effectively competition is lessened and a monopoly is created. Quantity discountsare only legal if all buyers, regardless of size, are given access to the discounts. TheRobinson-Patman Act is sometimes commonly referred to as the Anti-Chain-Store Act dueto its roots in ensuring that independent retailers could remain profitable against growingchain-store competition.The Federal Trade Commission ActThe Federal Trade Commission Act, administered and enforced by the Federal TradeCommission, prohibits unfair competition in business activities. The Act prohibits falseadvertising, inaccuracy of prices, deceptive media commercials, and misleading productrepresentations by a business or any of its employees, agents, or representatives. Thelaw only requires, though, the possibility of deceit to find fault, not actual deception.State Trade RegulationWarrantiesImplied warranties of merchantability, fitness for a particular purpose, and the extent towhich and manner in which such warranties may be excluded or modified is dealt with inGeorgia’s enactment of Title 2 of the Uniform Commercial Code (O.C.G.A. § 11-2-314 etseq.) 14
  20. 20. State Antitrust LawNo Georgia state statute provides a private cause of action for damages for antitrustactivity; however, Article III, Section VI, Paragraph V(c) of the Georgia Constitutionprohibits agreements to defeat or lessen competition or to encourage monopoly.Contracts “in general restraint of trade” are declared void and unenforceable by O.C.G.A. §13-8-2.The Constitution and the implementing statute have often been construed to frustrate thedrafting of an effective non-compete agreeme nt in an employment contract because acriminal antitrust statute (O.C.G.A. § 16-10-22) declares unlawful any “contract,combination or conspiracy in restraint of trade or in restraint of free and open competition”in any transactions with the State of Georgia or any agency or political subdivision of thestate.Unfair and Deceptive Trade Practices/Consumer ProtectionAside from Uniform Commercial Code provisions defining bona fide purchasers and holdersin due course, consumer protection legislation in Georgia is less prolific than in manystates, e.g., there is no “plain language” statute in Georgia. There are Georgia statutesdealing with false advertising (O.C.G.A. § 10-1-420 et seq.), fair business practices(O.C.G.A. § 10-1-390 et seq.), retail installment and home solicitation sales (O.C.G.A. §10-1-1 et seq.), unsolicited merchandise (O.C.G.A. § 10-1-50 et seq.), sale of businessopportunities (O.C.G.A. § 10-1-410 et seq.), and weights and measures (O.C.G.A. § 10-2-1 et seq.). Consumer protectio n legislation is administered and enforced by theGovernor’s Office of Consumer Affairs. 15
  21. 21. TaxationFederal Income TaxationPersonal Income TaxUnited States citizens and resident aliens must pay federal personal income taxes on allincome by April 15 of each calendar year. Non-resident aliens are generally subject onlyto taxes on dividends received from United States companies.Corporate Income TaxForeign corporations doing business in the United States are subject to federal corporateincome taxes on all income. Furthermore, as stated above, all dividends distributed bysuch companies to both domestic and foreign individuals are still taxable by the UnitedStates Internal Revenue Service and must be listed in annual federal tax disclosures.United States branches of foreign companies are subject to tax laws similar to thoseapplicable to United States corporations owned by foreign shareholders.Federal Tax BenefitsEmpowerment Zones (“EZs”)The Internal Revenue Service designated parts of Crisp County and all of Dooly County,both located in Southwest Georgia, as rural empowerment zones. Organizations doingbusiness in EZs are eligible for special tax credits. For example, businesses that hireindividuals who both live and work in an EZ can claim the credit if they pay “qualified zonewages” to a “qualified zone employee.” The credit is twenty percent of the qualified zonewages paid during a calendar year, up to a $15,000 wage limit per employee per calendaryear. As a result, the credit may reach $3,000 per qualified employee per year. Also,businesses working in an EZ may qualify for an increased Section 179 deduction. Section179 of the Internal Revenue Code allows a business to deduct all or part of the cost of“qualified zone property” placed in service in an EZ, up to a certain limit. For qualifyingbusinesses, this limit is increased, sometimes allowing a business to deduct up to $35,000per year. For information on additional federal tax credits for businesses operating in anempowerment zone, contact the Internal Revenue Service.Renewal Communities (“RCs”)The Secretary of Housing and Urban Development categorized particular Atlantaneighborhoods as designated renewal communities. In addition to increased Section 179deductions and other benefits, businesses that hire individuals who both live and work inan RC may be specifically eligible to receive a renewal community employment credit. If abusiness pays “qualified wages” to a “qualified employee,” that business may obtain a 16
  22. 22. federal tax credit of 15% of the qualified wages paid during a calendar year, up to a$10,000 wage limit per employee per calendar year. As a result, the credit may reach$1,500 per qualified employee per year. For information on additional federal tax creditsfor businesses operating in a renewal community, contact the Internal Revenue Service.State TaxationPersonal Income TaxThe state personal income tax is imposed on federal adjusted gross income, with statestatutory adjustments, less allowable deductions and exemptions. Furthermore,exemptions follow federal guidelines. Non-residents are taxable on net income fromproperty owned and activity conducted for financial gain in Georgia.Employers must obtain from the Georgia Department of Revenue a withholdingidentification number (Form G -5) for one or more individuals employed in Georgia andwithhold state income tax due from employees. Additionally, employers must file reportsand pay the withholding amounts to Georgia, based upon each employee’s withholdingallowance certificate (Form G-4). Quarterly and monthly reports (Form G-1 and G-6) andthe annual summary information return (Form G-3) are also required to be filed with theGeorgia Department of Revenue. The employer must furnish by January 31 of each yearto each employee a withholding tax statement (Form G-2) reflecting income paid to, andtax withheld, from the employee.Corporate Income TaxThe state corporate income tax (O.C.G.A. § 48-7-1 et seq.) is a flat six percent of federaltaxable income, with state statutory adjustments, from property owned in Georgia andfrom business done in Georgia. Where business is done both within and without Georgia,income is referenced to Georgia based upon the geographic status of the propertyproducing income. For income derived principally from tangible personal property,allocations are based upon the application of a three-factor formula. The three factorsinvolve the ratio of property, payroll, and gross sales receipts within and without Georgiaseparately determined and then averaged.Affiliated groups of corporations that file consolidated federal income tax returns are notentitled to file consolidated Georgia returns unless all members of the group derive alltheir income from Georgia. In other instances, corporations filing consolidated federalincome tax returns and wishing to do so in Georgia must apply in advance for permissionfrom the State Revenue Commissioner. Such permission depends on whether (1) allmembers of the proposed consolidated Georgia group derive a substantial portion of theirincome from Georgia (generally eighty percent or more) and (2) the filing of aconsolidated Georgia return is necessary to fairly reflect the income of the groupattributable to property or activities in Georgia. 17
  23. 23. Corporate Net Worth (License) TaxGeorgia’s annual tax on net worth (capital stock + retained earnings) is called a licensetax (or franchise or privilege tax). (O.C.G.A. § 48-13-70 et seq.) Domestic corporationsface a 100% tax on net worth. Foreign corporations, though, are taxed only on net worthapportioned to Georgia determined by the formula:Net Worth in Georgia = Total Net Worth x (Property and Sales in Georgia/TotalProperty and Sales)S CorporationsGeorgia recognizes S corporations. S corporations file and pay income tax to Georgia onlyon built-in gains and other items of income taxable at the corporate level for federalincome tax purposes.Property TaxThere are annual real property taxes and tangible personal property taxes levied by city,county, school district, and the state. (O.C.G.A. § 48-5-1 et seq.) All rates are set locally,except for the state tax, which is 10 cents per $1,000 of fair market value of propertyowned as of January 1 of each year. The tax rates for intangible property vary from 10cents per $1,000 of cash/patents/copyrights to $1.00 per $1,000 of the value ofbonds/stocks of foreign corporations. Generally, county millage rates range from 11.25 to64.40 mills per $1,000 of fair market value. The average rate is 29.89 mills.Unemployment Insurance TaxAll Georgia industries pay an unemployment insurance tax (O.C.G.A. § 34.8.1). Initially,every industry is charged 2.7% of each employee’s first $8,500 in earnings (or $229.50per employee). However, after thirty-six months, the tax rate is recalculated dependingon the business’ employee retention rate. Many Georgia industries pay well below the2.7% initial rate.Sales and Use TaxGeorgia has a four percent statewide sales and use tax, with an additional one percentimposed by the Rapid Transit Act on taxable transactions occurring in Fulton and DeKalbCounties. (O.C.G.A. § 48-8-1 et seq.) Additional local option sales and use taxes areauthorized up to two percent for joint county and municipal special districts and up to onepercent for counties which by referendum have imposed the local option tax for a limitedtime period and for a permissible purpose. Exemptions include purchases for resale andpurchases of the following products: machinery used directly in making a product for sale,raw materials that will become a component of a finished product, machinery and 18
  24. 24. equipment used for pollution control and solar energy systems used for heating, cooling,or drying.Inventory TaxIn some Georgia counties, all of a manufacturer’s inventory – raw material and finishedgoods – may be exempt from taxation under the local option Freeport law. In mostcounties, inventories are fully exempt from property taxes if the inventory is going to beshipped out of the state. 19
  25. 25. LaborFederal ConsiderationsImmigrationA variety of United States permanent and temporary visas allow domestic employers tohire foreign employees. Specific types of visas are granted based on the individual’seducational or employment status, intended length of stay in the United States, and therelationship between United States employers and foreign employers. In general,permanent residents have the freedom to work in any occupation wherever they wouldlike, while temporary residents are restricted in their length of stays in the United Statesand in their employment options.Permanent Residency (“Green Card”)The United States has a quota on the number of permanent residents allowed annually(excluding mmediate relatives, such as spouses and minor children of United States icitizens, or parents of adult U.S. citizens). Permanent resident status can be obtainedthrough two main methods – by a relative or an employer. Commonly, a green card isobtained by sponsorship from a relative who is already a U.S. citizen or permanentresident. However, waiting periods may be long depending on the nationality of theindividual. Employers may also sponsor employees as permanent residents. It isrecommended that employers interested in sponsoring an individual for permanentresidency status should contact any U.S. Embassy or Consulate, the U.S. Department ofState, or the Bureau of Citizenship and Immigration Services (formerly, the INS) for moreinformation. In addition, more information can be found by referencing the Immigrationand Nationality Act and the Code of Federal Regulations (8 C.F.R. § 245). Temporary Visas • B-1 and B-2 Short Term Visas B-1 Visas provide individuals short-term access to the United Sta tes for business purposes, while B-2 Visas are for short-term visits to the United States for travel or pleasure purposes. Typically, B-1 and B-2 visas are given for domestic stays of six months or less; however, permit holders may obtain an extension. Employers often request B-1 visas for employees sent to the United States to attend conferences or to negotiate contracts. No employer sponsorship documents are required. Neither B-1 nor B-2 visa holders may be employed at any point during their stay. Se veral countries’ citizens may enter into the United States for business or pleasure purposes for up to ninety days without a B or B-2 visa -1 under the Visa Waiver Program. 20
  26. 26. • F-1 and F-2 Academic Student VisasIndividuals pursuing an F Academic Visa must both petition the Bureau of -1Citizenship and Immigration Services (BCIS, formerly the INS) for approval andobtain a Form I-20 from a sponsoring institution of education (university, college,etc.). F-1 visa holders are expected to enroll at the institutio n that provides theForm I-20 and the visa will be in effect for the duration of the time stated in the I-20, as long as the individual is a full-time student. F-1 students may be employedin an on- or off-campus job during their stay in the United States. F-2 visas areprovided to spouses or children (under twenty-one years of age) of F-1 students.Each F-2 holder must also obtain a Form I-20 from the sponsoring institution andmust provide proof of marriage and birth in order to be issued a F-2 visa. F-2holders may not work in any capacity while in the United States.• H-1B and H-4 Temporary Worker VisasIndividuals performing services in a specialty occupation for a short period of timein the United States may obtain a H1-B temporary worker visa. Valid occupationsinclude those that require highly specialized skills and knowledge and those thatinvolve acquiring and using skills for which a higher education degree (bachelor’sor higher) is a necessary minimum. The BCIS must certify that an individualmeets these criteria before an H1-B visa may be issued. An H1-B holder may stayin the United States for no more than six years (an initial three-year allowance + athree-year extension) and during that time, may work for a stipend or salary. H-4visas are given to dependents of H1-B workers, specifically their spouses andchildren (under 21 years of age). Although H-4 dependents may not work in theUnited States, they may matriculate at any educational facility, full- or part-time,during their stay.• J-1 and J-2 Exchange Visitor VisasThe J-1 visa provides foreign academic students, scholars, researchers andteachers an opportunity to participate in U.S. educational activities. All J-1 visaholders must also obtain a Form DS-2019 (Certificate of Eligibility) from thesponsoring institution. Academic students may stay in the United States untilreceipt of their respective degrees (and as long as they remain full-time students)and must have additional sources of funding outside of personal funds.“Specialists” may only obtain a twelve -month visa, while “short term scholars”may only obtain a six-month visa (no extensions may be granted). Finally,“research scholars” and “professors” may obtain a three-year visa (with thepossibility of a six-month extension in order to finish any research) and may alsobe provided a stipend or salary. All J-1 visa holders though must be aware of the“two year home country residence requirement” which stipulates that J visa -1holders might have to return to their home countries for two years beforereturning to the United States on any other visa classification. J-2 visas may be 21
  27. 27. obtained for spouses and minor children (under twenty-one years of age) of J-1 visa holders. J-2 individuals may work with permission from BCIS. • O-1 Exceptionally Talented Individual Visas Individuals who exhibit extraordinary ability in the sciences, education, business, art, motion picture or television industries, or athletics may receive an O-1 visa. BCIS makes the final decision as to whether an individual is sufficiently qualified to merit an O-1 visa designation. Criteria include such merits as receipt of an internationally recognized prize like the Nobel Prize or displaying multiple publications in reputable peer-reviewed journals, several recommendations from prominent colleagues, or membership in internationally recognized associations. O-1 visa holders may remain in the United States for up to three years, and may obtain one-year extensions if they continue with the same work. Individuals who assist O-1 visa holders in their artistic or athletic performances may also qualify for an O -1 visa. • TN and TD North American Worker Visas TN visas, part of the immigration provisions of the North American Free Trade Act (NAFTA), are distributed to Canadian and Mexican professionals employed in such occupations as medical/allied health professionals, computer systems analysts, and management consultants. TN visa holders may work for one year with a specific employer, and are eligible for one-year extensions with BCIS permission. Dependents (spouses and young children) of TN visa holders may obtain TD visas. Individuals with TD visas may not work while in the United States.Labor and Employment StatutesAge Discrimination in Employment Act (“ADEA”)The ADEA prohibits employment discrimination based on age against individuals who areforty years of age or older. The ADEA applies to private employers with twenty or moreemployees, state and local governments, employment agencies, labor organizations, andthe federal government.Americans with Disabilities Act (“ADA”)The ADA prohibits employment discrimination against any eligible individuals with physicalor mental impairments that substantially limit one or more life activities. The Act alsorequires that employers take reasonable measures to accommodate disabled individuals inthe workplace unless such actions would be an undue hardship on the employer.Applicable employers under the ADA include private employers, state and localgovernments, employment agencies, and labor unions that have fifteen or more 22
  28. 28. employees for each working day in each of twenty or more calendar weeks in the currentor preceding calendar year.Fair Labor Standards Act (“FLSA”)The FLSA creates a minimum wage, overtime payments, and child labor restrictions forindustries involved in interstate commerce, regardless of the number of employees theymaintain. Currently, the minimum wage is $5.15 per hour and overtime pay is set at oneand one-half times the regular rate of pay after forty hours of work in a workweek. Childlabor restrictions include limits on the number of hours a week a child under sixteen maywork and limits on allowing youths to work in certain dangerous occupations.Equal Pay Act (“EPA”)The EPA, a part of the Fair Labor Standards Act, is administered and enforced by the EqualEmployment Opportunity Commission and requires that men and women both receive thesame wages when their jobs include similar skills in the same establishment undercomparable working conditions.Family and Medical Leave Act (“FMLA”)The FMLA requires that employers who employ fifty or more employees for each workingday during each of twenty or more workweeks in the current or preceding calendar yearmust give eligible employees up to a total of twelve work weeks of unpaid leave duringany twelve -month period for any of the following reasons: (1) for the birth and care of anewborn child of the employee, (2) for the placement with the employee of a son ordaughter for adoption or foster care, (3) to care for an immediate family member (spouse,child, or parent) with a serious health condition, or (4) to take medical leave when theemployee is unable to work because of a serious health condition.National Labor Relations ActThe National Labor Relations Act, administered and enforced by the National LaborRelations Board, governs relationships between labor unions and business management.The Act allows employees to organize and to bargain collectively with manageme nt, or torefrain from such activities entirely. The Act applies to all industries involved in interstatecommerce, but railroads and the government are exempt from its provisions.Occupational Safety & Health Act (“OSHA”)OSHA, administered and enforced by the Occupational Safety and Health Administration,requires that employers and employees follow federal and state workplace safety andhealth guidelines. OSHA covers all employers affecting commerce and their employees,regardless of number. 23
  29. 29. Title VII of the Civil Rights Act of 1964 (“Title VII”)Title VII, administered and enforced by the Equal Employment Opportunity Commission,forbids employment discrimination against employees on the basis of race, color, sex,religion or national origin. Title VII applies to federal, state and local employers withfifteen or more employees. Employers cannot use those categories to refuse to hire anotherwise qualified applicant, to fire an individual, or to discriminate against any employeewith respect to his/her compensation, terms, conditions or privileges of employment.Employee Benefits Employee Retirement Income Security Act of 1974 (“ERISA”)ERISA mandates standards for most voluntarily established employee benefits plans,including retirement programs, life and disability insurance programs, medicalreimbursement plans, health care plans, and severance policies. It requires thatemployers provide employees with plan feature and payment information, providefiduciary responsibility for those who manage plan assets, establish a grievance andappeals process for plan members, and give employees the right to sue for benefits andbreaches of fiduciary duty. Consolidated Omnibus Budget Reconciliation Act (“COBRA”)COBRA provides employees with the right to elect to continue health care coverageprovided by their group health plan for a limited time upon the voluntary or involuntaryloss of their job, reduction in work hours, transition between jobs, death, or divorce.Coverage can be continued for about eighteen months. COBRA also contains very specificnotification requirements for employers to notify employees of their COBRA rights. Health Insurance Portability and Accountability Act (“HIPAA”)HIPAA affects participants and beneficiaries in group health plans. The Act continuescoverage under plans that limit exclusions for preexisting conditions, prohibitsdiscrimination against employees and dependents based on their health status, and allowsa special opportunity to enroll in a new plan to individuals in certain circumstances. HIPAAalso contains provisions protecting the privacy of plan members’ medical records.State ConsiderationsGeorgia Labor LawsWorkers’ compensation insurance is required of any employer with three or moreemployees within Georgia in the same business, to be maintained by purchase from alicensed insurer, by qualifying as a self-insurer or through a group self-insurance program. 24
  30. 30. Periodic reports evidencing such insurance are required with the State Board of WorkersCompensation (O.C.G.A. § 34-9-1 et seq.).The Georgia Employment Security Law (O.C.G.A. § 34-8-1 et seq.) requires eachemploying unit to contribute to the state’s unemployment compensation fund if the unitmeets a minimal alternative employment standard. The initial rate is 2.7% of the first$8,500 of annual wages paid to each employee per year. Form DOL-4 must be filedquarterly with payment to the Georgia Department of Labor. An employer status report(Form DOL-1A) must be filed by an employer with the Department of Labor at theinception of employment and periodically thereafter, and a separation notice (Form DOL-800) must be delivered to each employee who separates from employment, regardless ofreason.State wage and hour laws, requiring that employees be paid at least bimonthly,supplement the federal Fair Labor Standards Act and set specific standards for use of childlabor. Garnishment laws define the circumstances under with a portion of an employee’swages may be garnished or assigned.The Georgia Equal Pay Act (O.C.G.A. § 34-5-1 et seq.) prohibits pay discrimination basedon sex for similar jobs under similar working conditions; the Georgia Age DiscriminationAct (O.C.G.A. § 34-1-2 et seq.) prohibits employment discrimination based on age; andthe Georgia Equal Employment for the Handicapped Act (O.C.G.A. 34-6A-1 et seq.),covering employers with fifteen or more employees, prohibits discrimination against anemployee because of handicap with respect to wages, hours, or other terms andconditions of employment.Labor UnionsGeorgia has no law requiring an employer to bargain collectively or otherwise encouragingor protecting the formation of, or membership in, a labor union. Georgia, a “right to work”state, prohibits making union membership a condition of employment or requiring that anemployee join, or remain a member of, a labor union, even pursuant to a union contract(O.C.G.A. § 34-6-25 et seq.). The State Constitution has been interpreted to prohibit apublic employer (e.g. state, county, or municipal government) from becoming party to acollective-bargaining agreement covering government employees.Furthermore, Georgia remains an “employment at will” state. Georgia courts haverefrained from construing oral representations, employee handbooks, or similar material tocreate implied employment contracts. Therefore, both employer and employee remainfree to terminate the employment relationship absent an agreement between themproviding for a definite period of employment (O.C.G.A. § 34-7-1). 25
  31. 31. Child Labor ActSupplementing the Federal Fair Labor Standards Act, Georgia’s Child Labor Act requiresthat individuals seventeen years of age or younger obtain an employment certificationform to work in Georgia, refrain from selling, serving, or dispensing alcoholic beverages(except where consumption is off the premises), file a special form if working inentertainment industries, and abstain from working in identified dangerous industries. 26
  32. 32. EnvironmentalFederal ConsiderationsResource Conservation and Recovery Act (“RCRA”)The RCRA, and its subsequent amendments, establishes environmentally soundprocedures for managing hazardous and non-hazardous waste. Under the RCRA, onlysolid waste (garbage, sludge, water treatment plant sludge, etc.) can be consideredhazardous waste and can therefore be regulated. The RCRA’s “cradle to grave” permittingsystem monitors waste at each step of its creation and disposal through a rigorous systemof labeling, recordkeeping, and transportation requirements.The RCRA is administered and enforced by four agencies: The U.S. EnvironmentalProtection Agency (“EPA”), U.S. Department of Commerce (“DOC”), U.S. Department ofEnergy (“DOE”), and the U.S. Department of the Interior (“DOI”). The EPA issuesregulations and policy guidance on the proper management of hazardous and non-hazardous waste, certifies state waste management programs, and provides financialassistance to state waste management programs. The DOC promotes commerciallyfeasible waste management techniques. The DOE provides financial assistance forresearch and development of waste to energy production techniques. Finally, the DOIregulates waste creation from metal and mineral mining operations.The RCRA also authorizes the EPA to bring suit against any person or entity thatendangers public health and safety through negligent or willful storage, treatment, ordisposal of hazardous waste.Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”)CERCLA, also known as “Superfund,” authorizes the federal government to regulatehazardous materials, to respond to hazardous substance emergencies, and to addressfuture hazardous substance concerns. CERCLA also finances the $1.6 billion HazardousSubstance Response Trust Fund, supported by an excise tax on feedstock chemicals andpetroleum, to assist in clean-up activities at abandoned waste sites. Under Superfund,potential responsible parties (“PRPs”) must pay for the clean-up activities for the damagethey have created; if no PRP comes forward, clean-up costs are supplied through the TrustFund. The EPA then has the authority under Superfund to take the PRP to court to obtainup to three times the clean-up costs in damages.Clean Air Act (“CAA”)The CAA regulates the discharge of pollutants into the air. United States standards forpollutants are set by the Environmental Protection Agency (“EPA”) and must conform toNational Ambient Air Quality Standards (NAAQS). Additional regulations concerning 27
  33. 33. stratospheric ozone protection and acid rain control were added to the CAA in 1990. TheCAA uses a permit system, administered by states, to regulate facilities that emitpollutants into the air. The permits are fee-based to offset the cost of the administrationof the regulatory scheme. Minimum rates are $25 per ton of each regulated pollutant (upto 4,000 tons per year). Administrative penalties for noncompliance with the CAA may beas high as $25,000 per day (up to $200,000 generally) for any violation and facilities mayb e fined up to $5,000 a day for each violation found upon inspection. The CAA alsocreates criminal sanctions for negligent or willful violations of its provisions.Clean Water Act (“CWA”)The CWA penalizes the discharging of pollutants into navigable waters without a permit bycreating (1) a system of minimum national effluent standards for each industry, (2) a setof water quality standards, (3) a discharge permit program that creates enforceable limits,(4) a set of provisions for special situations like toxic chemical and oil spills, and (5) aconstruction loan program for publicly owned treatment plants. Permits issued under theClean Water Act derive from federally approved state programs or from the EPA directly ifthe state has not been approved to d istribute permits. The EPA uses the NationalPollutant Discharge Elimination System (“NPDES”) to determine the enforceable limits forits permits.State ConsiderationsThe United States Environmental Protection Agency (“EPA”) authorizes the EnvironmentalProtection Division (“EPD”) of the State of Georgia to issue environmental permits. TheEPD offers a “one stop” permitting procedure in Georgia to enhance the efficiency of thepermitting process when a corporation locates a facility. However, permits required underthe Coastal Marshlands Protection Act and “dredge and fill” permits under Section 404 ofthe Federal Clean Water Act are not governed by the “one stop” permitting provisions.The Georgia Hazardous Waste Management Act (O.C.G.A. § 12-8-60 et seq.) covers thegeneration, transportation, treatment, storage, and disposal of hazardous wastes andsupplements the Federal Resource Conservation and Recovery Act (“RCRA”). The EPD hasbeen approved to run the RCRA program here in Georgia.The Georg ia Underground Storage Tank Act (O.C.G.A. § 12-13-1 et seq.) provides acomprehensive program to prevent, detect, and correct releases from undergroundstorage tanks (“USTs”) of “regulated substances” other than hazardous wastes governedby the RCRA regulations. The regulations provide design, construction, installation, andoperating standards for new USTs; a schedule for upgrading existing USTs; releasedetection methods for new USTs; and a phase-in of such methods for existing USTs.Notification and re cord keeping are required, as is reporting and correction of releases.Procedures for removal or abandonment of USTs are governed on a local level, usually bythe local Fire Marshall. 28
  34. 34. The Georgia Water Quality Control Act (O.C.G.A. § 12-5-20 et seq.) works in conjunctionwith the Federal Clean Water Act to deal with waste water discharge, site selection, andwetlands mitigation requirements. Likewise, the Georgia Air Quality Act (O.C.G.A. § 12-9-1 et seq.) establishes a pre -construction permitting process to impose specific emissionslimitations on sources of air pollution, such as manufacturing projects, printingestablishments, and dry cleaners. Also in regards to air pollution, the Georgia MotorVehicle Emission Inspection and Maintenance Act (O.C.G.A. § 12-9-40 et seq.) mandatesthat all motor vehicles in Georgia be inspected periodically (determined by regulation) toensure that exhaust and evaporative emissions meet federal and state guidelines and thatall on-board diagnostic equipment complies with emission standards. Finally, the GeorgiaAsbestos Safety Act (O.C.G.A. § 12-12-1 et seq.) governs the removal of asbestos frombuildings and other structures, requiring notification before demolition or removal andemployment of licensed contractors who must use specified emission control and workerprotection techniques.Finally, in 1992, Georgia adopted its own “baby Superfund” law, the Georgia HazardousSite Response Act (O.C.G.A. § 12-8-90 et seq.), which became effective July 1, 1992. TheAct provides for graduated fees on the disposal of hazardous waste, a trust fund to enablethe EPD to clean up or plan sites and administer the program, a strict joint and severalliability scheme similar to that of CERCLA, an EPD inventory (with a July 1, 1994 date ) of“known or suspected” Georgia hazardous sites, a system requiring deed notices andaffidavit recording on county real property records for sites having substance releases inexcess of “reportable quantities” (as defined by regulation), EPD authority to issue non-appealable correction action orders with mandatory punitive damages for non-complianceand new reporting requirements for contaminated property. 29
  35. 35. Intellectual PropertyCopyrightsCopyrights protect original, intellectual literary, artistic, musical, or dramatic workproducts. The 1976 Copyright Act generally gives a copyright owner the exclusive right toreproduce the copyrighted work, to publicly perform such works, and to publicly displaysuch works. In the United States, copyrights are governed by federal law and areadministered through the United States Copyright Office of the Library of Congress.Further information can be obtained by calling the Office at (202) 707-3000.PatentsThe Patent Act of 1952 affects patents and grants a pro perty right to inventors.Protections provided by the Act include the right to “exclude others from making, using,offering for sale, or selling” the invention in the United States or “importing” the inventioninto the United States. Patents are protected for twenty years following the date on whichthe application was filed with the United States Patent and Trademark Office. However,United States patents are only valid within the United States, United States territories, andUnited States possessions. Like copyrights, patents are governed by federal law. Furtherinformation can be obtained by calling the Office at 1-800-786-9199.Trademarks and Service MarksTrademarks are words, names, or symbols used by a person or entity to identify goodsmade or sold and to distinguish them from goods made or sold by another party.(O.C.G.A. § 10-1-440) Service marks, on the other hand, identify services offered orrendered and are used to distinguish offered or rendered services from other providers.(O.C.G.A. § 10-1-440) Both trademarks and service marks can be obtained from theGeorgia Secretary of State’s office by filing the appropriate application (obtainable on theSecretary of State’s website), paying the $15.00 non-refundable examination fee, andproviding three specimens. Specimens are actual examples of the mark for whichprotection is sought. Acceptable trademark specimens include the actual label orpackaging of the product. Acceptable service mark specimens are advertisementsshowing the mark and the services offered. All registered trademarks and service marksare protected for ten years, although they may be renewed. Trademarks may also befederally registered through the United States Patent and Trademark Office of theDepartment of Commerce. Further information can be obtained by contacting the Office at1-800-786-9199.Trade NamesTrade names are names owners use to identify their businesses. They are not registeredwith the Georgia Secretary of State’s office, but rather with the Cle rk of the Superior Court 30
  36. 36. of the county where the business operates. (O.C.G.A. § 10-1-490.) Trade names are alsosometimes referred to as “DBAs” or “fictitious names.” Trade names do not, however,provide protections similar to those of copyrights or trademarks.Trade SecretsUnlike patents, trademarks, and copyrights, the protection of trade secrets is a distinctlystate -controlled area and is not covered by any federal statutory grant of rights. Forexample, in 1990, the state adopted the Georgia Trade Secrets Act (O.C.G.A. § 10-1-760et seq.), patterned after the Uniform Trade Secrets Act, defining “trade secrets,”prohibiting the act or threat of misappropriation of trade secrets, and providing for bothequitable relief and damages. “Trade secrets” include technical or non-technical data,formulae, patterns, compilations, programs, methods, techniques, product plans, privatecustomer lists, and blueprints. The items must also possess economic value, actual orpotential, and must not be publicly-obtainable. (O.C.G.A. § 10-1-761) Although the Actsubstantially increases the assurance of protection, factors such as the extent to which therelevant information is publicly known, the measures taken by the owner to protect theinformation, the value of the information, the cost incurred by the owner in developing theinformation, and the ease or difficulty with which others could properly duplicate theinformation affect the question of whether protection will be afforded by the Act. 31
  37. 37. Dispute ResolutionFederal Court SystemThe United States Constitution authorizes the Legislative Branch (the United StatesCongress, consisting of the House of Representatives and the Senate) to create thenation’s laws and the Executive Branch (led by the President of the United States) toenforce the nation’s laws. Article III of the United States Constitution establishes theJudicial Branch and charges the federal courts to interpret and apply the laws of thenation. Since the Constitution’s ratification, the federal courts have always enjoyedjudicial independence to underscore the significance of their role. For example, federaljudges are appointed for life (after being nominated for their positions by the President ofthe United States and being confirmed by the United States Senate) and can only beremoved from office through impeachment and conviction by both chambers of Congressfor “Treason, Bribery, and other high Crimes and Misdemeanors.” (United StatesConstitution, Article II, Section 4).United States District Courts are the trial courts of the federal judiciary and they havejurisdiction to hear all types of matters, both civil and criminal. Currently there areninety-four federal judicial districts, including at least one district in each state, the Districtof Columbia, Puerto Rico, and the three United States territories (Virgin Islands, Guam,and Northern Mariana Islands). Georgia maintains three judicial districts: the NorthernDistrict Court of Georgia, the Middle District Court of Georgia, and the Southern DistrictCourt of Georgia. Moreover, there are two special trial courts that have nationwidejurisdiction in specialized matters: the Court of International Trade (trade and customsissues) and the United States Court of Federal Claims (claims for money damages againstthe United States, disputes over federal contracts, unlawful “takings” claims against thefederal government, etc.).The federal district courts have limited jurisdiction determined by the United StatesConstitution and federal statutes. They maintain exclusive jurisdiction over bankruptcy,patent and copyright, foreign consuls and vice -consuls, admiralty and maritime, antitrust,and all matters where the United States is involved. All other matters can be consideredby state courts concurrently. Two methods allow a party to utilize the federal courts whenthere is concurrent jurisdiction. The first method is by diversity jurisdiction, where thedispute involves citizens of different states (each plaintiff must be from a state that isdifferent from each of the defendants) and the amount in controversy is greater than$75,000. The second method is by federal question jurisdiction, where the case involvesan issue arising out of the Constitution, statutes, or treaties of the United States. If a casedoes not fall under either of these two procedural mechanisms, the action can only bebrought in state court. If a matter proceeds to federal court, parties must be aware ofboth the Federal Rules of Civil Procedure and the Federal Rules of Appellate Procedure, aswell as any local rules of the particular federal court. 32

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