What is the Limited Liability Company?
- Limited liability companies differ from business corporations in many respects.
- You will need to consider many factors, from management structure to tax codes, when determining if you wish to establish a limited liability company.
- It is a separate legal entity from the personal and it gives protection to the personal assets.
- A limited liability company (LLC) is an unincorporated separate entity that is a cross between
a corporation and a partnership with certain advantages to both of them. The owners are
referred to as “members” and the company can have from one to an unlimited number of
members. Members can be natural persons, sole proprietorships, corporations or any other
form of entity whether for profit or nonprofit.
- A limited liability company (LLC) is an unincorporated separate entity that is a cross between
a corporation and a partnership with certain advantages to both of them. The owners are
referred to as “members” and the company can have from one to an unlimited number of
members. Members can be natural persons, sole proprietorships, corporations or any other
form of entity whether for profit or nonprofit.
An LLC can also be defined by comparing it to other business entities. An LLC is similar to:
1. A general partnership with limited liability.
2. A limited partnership where all owners can participate in management and still retain their limited liability protections.
3. An S corporation without the ownership, distribution, voting and tax restrictions.
4. A closely held family corporation with pass through tax benefits.
5. A sole proprietorship with owner’s liability protection.
6. An entity that can raise initial capital without the restrictions placed on newly-formed
corporations.
Limited liability companies are the entity of choice across the United States. There are more
LLCs formed than any other entity. Limited liability companies are regularly used for estate
and gift planning; real estate development and holding; asset protection; joint ventures;
capital formation; family businesses; and as an all purpose business form.
How to File Articles of Organization in North Carolina?
Company Name
The exact company name, including abbreviations, punctuation, etc. must be used consistently in all documents filed. For example, the company name stated in the caption of the documents filed must be identical to the name stated in Articles of Organization. The name must also include an ending (i.e., limited liability company, llc, etc.)
Organizers/Members
At least one person must execute the Articles of Organization. The articles must state the name, title, and business address of each person executing the Articles of Organization, and must also state whether each of those persons is executing the document in the capacity of a member or organizer.
The Articles of Organization may identify the initial members of the LLC. Unless the Articles of Organization provide otherwise, any person who executes the articles in the capacity of a member, and any person otherwise named in the articles as a member of the LLC, becomes a member at the time the filing becomes effective.
Principal Office Address
If the limited liability company has a principal office, the Articles of Organization must identify the complete street address of that office, along with the county in which it is located. The Articles of Organization must also state the complete mailing address of the limited liability company if the mailing address is different from the street address.
Registered Office and Agent
A limited liability company is required to have a registered office and a registered agent (N.C.G.S. § 55D-30). The duty of the registered agent is to forward to the business entity at its last known address any notice, process, or demand that is served on the company. A registered agent must be:
1. An individual who resides in North Carolina and whose business address is identical to the registered office;
2. A domestic business corporation, nonprofit corporation, limited liability company whose business address is identical to the registered office; or
3. A foreign business corporation, nonprofit corporation, or limited liability company authorized to transact business in this state and whose business address is identical to the registered office.
If the Registered Agent is a business entity required to be filed with the Secretary of State’s Office, the entity must be active upon the records of the Secretary of State’s Office.
The Articles of Organization must set forth the street address (and the mailing address, if different from the street address) of the registered agent’s office, as well as the county in which the registered agent’s office is located, and the name of the initial registered agent. The registered agent’s office may, but need not be, the same as any of the company’s places of business.
Managers
According to N.C.G.S. §§57D-3-20(a) and 57D-3-20(d); the management of an LLC and its business is vested in the managers. All members by virtue of their status as a member are managers of the LLC and its business.
Optional Provisions
The articles of Organization may set forth any provision that can be included in the operating agreement of a limited liability company or other provisions that are consistent with the law. The articles may contain:
1. A statement of the purpose or purposes for which the company is organized;
2. Provisions relating to management and regulation of the company’s affairs;
3. Provisions which define, limit, or regulate the powers of the company, its company officials, managers, and its members;
4. Provisions defining the qualifications, rights, and responsibilities of. its members; and
5. Provisions limiting or eliminating the personal liability of any company official for monetary damages for breach of any duty as a company official.
Processing Time
Estimated state processing time is 24-48 hours.
Open LLC as a Non US Resident
A Non US Resident can start an LLC in the North Carolina, without having a social security number with the North Carolina Secretary of State.
Annual Report Due Date and Fees
The first annual report is due on April 15th of the year following the creation year and every year thereafter on or before April 15th.
Opening Business Bank Account
You should open a business account to maintain your business activities.
A request to retrieve Filed Documents
You can always request to the state to retrieve a duplicate copy of your filed documents.
Workers Compensation and Disability Insurance
You are required to maintain the insurances for your employess (if applicable).
Filing Taxes
All single member or multi-members LLCs are required to file taxes with the Internal Revenue and North Carolina Department of Revenue. You can also file LLC taxes as a Corporation or an S Corporation and you have to file an election with the IRS and the state (if applicable) for approval.
Basic Tax Filings
- Yearly Filing Form 1040 or Form 1065.
- Yearly Filing State and Local taxes(if applicable)
- Sales Tax Reruns if selling taxable products of licenses. Make your you have obtained a Sales and Use Tax Permit from the North Carolina Department of Avenue
- Payroll taxes and make sure that you have obtained registration to hire employee(s).
Useful Links:
https://www.dor.state.nc.us/taxes/sales/
