Georgia LLC for Architects Law

Limited Liability Company – General – Georgia

In Georgia, a limited liability company (LLC) can be formed for any lawful purpose. However, if the purpose for which a LLC is formed makes it subject to a special provision of law, the LLC shall also comply with those provisions.

The Georgia Limited Liability Company Act addresses the use of a LLC for the practice of a profession only in the following statutes:

§14-11-314 provides that the Georgia Limited Liability Company Act does not change any law applicable to the relationship between a person rendering professional services and a person receiving those services, including liability arising out of those professional services.

§14-11-1107(f) provides that the laws of Georgia are deemed amended to permit the provision of professional services within Georgia by limited liability companies.

§14-11-1107(g) provides that the Georgia Limited Liability Company Act does not restrict or limit the authority and duty of any regulatory or other body licensing professionals and regulating the practice of any profession within Georgia.

In light of the absence of direct statutory guidance regarding the organization and operation of a LLC organized to engage in the practice of a profession, one must look to the statutory guidelines and restrictions relative to a professional corporation to determine which, if any, of those provisions appear applicable to a LLC.

With that in mind, the following provisions of the Georgia Professional Corporation Act give guidance to the organization and operation of a Georgia LLC. These have been incorporated in the Operating Agreement of the LLC contained in this form package.

“Licensed” means registered, certified, admitted to practice, or otherwise legally authorized under the laws of this state by the appropriate regulating board.

A “profession” is the profession of certified public accountancy, architecture, chiropractic, dentistry, professional engineering, land surveying, law, pharmacy, psychology, architecture and surgery, optometry, osteopathy, podiatry, veterinary architecture, registered professional nursing, or harbor piloting.

“Regulating board” is the board, commission, court, or governmental authority which, under the laws of this state, is charged with the licensing, registration, certification, admission to practice, or other legal authorization of the practitioners of any profession.

A professional corporation may practice only one profession, but for the purpose of this chapter, the practice of architecture, professional engineering, and land surveying shall be considered the practice of only one profession to the extent that existing laws permit overlapping practices by members of those specific professions not inconsistent with the ethics of the professions involved.

A professional corporation may engage in the practice of a profession only through its officers, employees, and agents who are duly licensed or otherwise legally authorized to practice the profession in Georgia. This restriction does not prevent the corporation from employing unlicensed persons in capacities in which they are not rendering professional services to the public in the course of their employment.

At least one member of the board of directors and the president of a professional corporation shall be licensed to practice the profession for which the corporation is organized. If the governing board of a professional corporation includes persons not so licensed, the corporation shall, by creation of a standing committee of the board or otherwise, vest the responsibility for decisions relating wholly to professional considerations in persons who are so licensed.

Shares in a professional corporation may only be issued to, held by, or transferred to a person who is licensed to practice the profession for which the corporation is organized and who is actively engaged in the practice as an active practicing member of the issuing corporation.

Shares in a professional corporation must be voted by the holder of record or by another shareholder in the same corporation in accordance with a proxy or an agreement providing for the voting of the shares.

Shares in a professional corporation held by a deceased or retired shareholder must, within six months after the date of death or retirement of the shareholder, be either redeemed or canceled by the corporation or transferred to a person or persons authorized to hold the shares.

The shares held by a shareholder who becomes legally disqualified from practicing the profession for which the corporation is organized or who is disqualified as a shareholder must be redeemed, canceled, or transferred within 90 days after the disqualification becomes final.

In the absence of an article or bylaw provision or an agreement providing for the redemption or transfer of such shares or if the shares are not redeemed or transferred pursuant to such a provision or agreement within the required period of time, the corporation is authorized to and must cancel the shares on its books at the termination of the required period.

If valuation and payment terms are not fixed under such an existing provision or agreement and are not agreed upon either prior to or at any time after the termination of the required period, the fair value of the redeemed or canceled shares is determined and paid in the same manner as if the personal representative of the deceased shareholder, or the retired or disqualified shareholder, were a shareholder entitled to valuation and payment for his shares. The personal representative of the deceased shareholder, or the retired or disqualified shareholder, is not authorized at any time to participate in or vote on any matter concerning the rendering of professional services by the corporation.

Nothing contained in the Georgia Professional Corporation Act limits the authority and duty of any regulating board to regulate the several professions including the right to establish and enforce standards of practice, and nothing contained in this chapter shall change the law or existing standards applicable to the relationship between the person furnishing a professional service and the person receiving such service, including, but not by way of limitation, the rules of privileged communication and the contract, tort, and other legal liabilities and professional relationships between such persons.

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Inside Georgia LLC for Architects Law