By Dray Breezy
November 1, 2020
Starting a new business is complex and incredibly challenging process. As my freelancing business is starting to grow, I know that I must protect myself from the liabilities that come from having a business. Legally, the best way to accomplish that is to form a LLC. I did it, and I want to share with you how you can do it too. For $127 you can have peace of mind and officially have a legally recognized business.
I currently have what is called “sole proprietorship” of my freelancing business. Before creating a LLC, any of the mistakes you make professional are directly attached to your business. If you mess up, people can sue you AND your business. That’s no good. LLC literally means “Limited liability Company”. Being part of a LLC means that your business is separate from your personal life or the lives of the other members and owners. There are immediate benefits to forming a LLC.
Pros and Cons of Having LLC
Forming a LLC allows you, as the owner, to pay a lower (corporate) tax rate. As the owner, you may receive compensation in the form of distributions of profit, and pass-through of business losses, offsetting the owner’s other nonbusiness income. Having a LLC also adds credibility and shows commitment to your business model. Banks love this stuff and the current tax climate is very hospitable to the LLC model.
Starting a LLC in North Carolina is not difficult and only costs $127. Before you begin it helps to know the answer to a few questions.
- Name of business
- Name of business owner(s)
- Name of registered agent
- Address of business owner
- Address of business office (if applicable)
- Name of organizers/members
- Titles for organizers/members (Administrative Member, Assistant Controller, Assistant Secretary, Assistant Treasurer, Assistant Vice President, Authorized Representative, Authorized Signatory, Chairman, Chairman of the Board, Chairperson of the Board, Chief Accounting Officer, Chief Administrative Officer, Chief Executive Officer, Chief Financial Officer, Chief Information Officer, Chief Liquidating Officer, Chief Operating Officer, Chief Strategic Officer, Chief Technology Officer, Comptroller, Controller, Corporate Controller, Corporate Officer, Corporate Secretary, Executive Director, Executive Manager, Executive Officer, Founder, General Counsel, General Manager, Manager, Managing Member, Member, Owner Manager, President, Secretary, Senior Vice President, Senior VP of Finance, Tax Director, Tax Manager, Tax Officer, Treasurer, Vice President, Vice Secretary.
Let’s fill out those LLC Forms!
Okay so that’s most of the heavy lifting. There are two forms you have to fill out. One is written and there is also a more complicated version form online. I have attached a PDF copy of the official written form that you can fill out…now. The process is rather straight forward but it is helpful to know about registered agents, organizers and members. A registered agent is the emergency contact of your business, in my case, I am my own registered agent, owner/member, founder/COO. Members can be organizers, but organizers can’t be members. If you have multiple members in your company these titles and roles should be thoroughly discussed BEFORE beginning this application.
After signing the document attached, you have to create a profile on the sosnc.gov site. After that go to Online Services on the main menu and click on Business Registration. Go to Submit A Creation Filing and you will be asked to submit the information that I have so graciously preemptively asked you to acquire. You will be asked to attach a PDF or WordDoc of the written form that I attached and submit payment, then you are set! There are options to expedite the process (capitalism at its finest), getting same-day approval or 24 hour approval for a premium fee. The rest of us peasants have to wait 3-5 days. The process should look something like this…
Filing a LLC Examples
Forming a strong framework of business protection around your personal liability strengthens your company and your brand. It’s a simple, easy process that can save you a lot of hassle in the future. Don’t forget to snag a copy of the LLC form below!
