Being a small business owner in North Carolina is thrilling and often overwhelming. It is tempting to jump in and begin making sales and marketing decisions immediately. However, giving some thought to what business structure works best for you and your company can be beneficial in the long run. At BA Folk, we often assist clients in business formation, including entity selection.
A limited liability company is the most popular choice for startup businesses. It can protect business owners from the company’s financial obligations. The liability protection is similar to that offered by a corporation but an LLC is less expensive than other business entities and comes with far fewer of the formalities required of a corporation.
For example, take the flexibility regarding the management structure. Corporations must have a board of directors in place, hold annual meetings and record the minutes. LLCs do not have any of those requirements. There are also no restrictions regarding the number or type of members that can exist. Your company’s owners can be anyone, including non-resident aliens.
In addition to offering limited liability protection and corporate flexibility, there are tax benefits offered by an LLC. Earnings and losses are not taxed at the corporate rate. Instead, they pass through to your personal tax returns, and you pay individual taxes on the amount. This prevents you from being taxed twice, once at the corporate level and once at the ownership level.
Depending on your business goals, an LLC structure may benefit you and your company. The experienced business law attorneys at BA Folk can help you determine which entity best fits your needs and help you through the filing process. Visit our webpage for more information on this topic.