Deciding which business entity your new company should be is a daunting task. You will need to consider the tax implications, the state liability issues, and what ongoing responsibilities will have to be performed in order to keep the company in good standing. Fortunately, for most the choice ends up being relatively simple: form as a limited liability company or more commonly known as an LLC.
Forming as an LLC is incredibly popular and for good reason. The LLC typically offers the best option in terms of tax implications, liability protection and ease of governance. In fact, the choice to form as an LLC in North Carolina is more persuasive than ever. This is because of the recent revisions to North Carolina’s Limited Liability Company Act, which allow a greater degree of control and protection for businesses that form as an LLC within the state. The revised act provides LLCs in North Carolina a host of benefits, such as greater flexibility in planning for and controlling the inevitable management disagreements that occur amongst its members.
This control is derived from the operating agreement and having a well-drafted operating agreement is critical for taking advantage of many of the benefits found in the revised Limited Liability Company Act. For example, the operating agreement now allows LLCs to restrict members from bringing lawsuits against other managing members on behalf of the company or seeking judicial dissolution of the LLC without first pursuing alternative remedies. Furthermore, the operating agreement can specify penalties for violating the agreement. Also, under the new act the LLC can eliminate the fiduciary duties of its members, and specify the conditions for indemnification of its members when they act on behalf of the LLC.
If you have decided that forming as an LLC is the right choice for your business, it is important to make sure you take advantage of all of the rights afforded under the new Limited Liability Company Act. Based on the popularity of the LLC, we have created a simple to use online business formation tool along with cost effective formation packages in order to better assist you with your needs. You may find our business formation offerings by clicking here. Also, please feel free to contact us if you would like assistance in evaluating whether an LLC would be the best option for your future business.