Cheaper than other states
North Carolina is one of the best places in the country to start a business, particularly if you want to live in the place in which you’re starting your business and have a whole lifestyle there. The population growth is steady, the cost of living is very affordable, and it’s a pleasant climate overall. As well as this there is proximity to some of the most notable colleges and universities, making this a great state for would-be entrepreneurs. On top of this, starting an LLC is a great idea: you get the perfect blend of a corporation and a partnership.
Ease and costs of starting your North Carolina LLC
Starting an LLC in North Carolina is a very simple process, as they only require the bare minimum from you – and the rest is up to you to choose. The cost for starting an LLC in North Carolina can be a bit higher than the average cost in other states, costing $200 to form your Articles of Organization. However, for the great state that you’re doing it in, it is well worth the price. As well as this, while the price will seem higher to you than for other states, taxes for LLCs in North Carolina can be cheaper than in other states – so if you’re looking to keep a long-term LLC, it will work out cheaper for you overall.
The Operating Agreement is not necessary
The flexibility of starting an LLC in North Carolina is amazing. In some states, things like publishing your Articles of Organization, is necessary, which can incur a greater cost, and in lots of states, the operating agreement is a necessary part of forming your LLC. However, in North Carolina, you don’t even need to have an operating agreement if you don’t want to, so you can end up saving lots of time and therefore money off this. Though this doesn’t mean having an operating agreement isn’t advised – they are great for sorting out various disputes that can arise in the company.
Taxes in North Carolina
When it comes to LLC taxes, it is well-known that LLCs can either be taxed as a sole proprietorship (if they are run by one person), a partnership (if there are 2 or more people running the LLC) or a corporation, if the company members vote to be taxed like that for tax purposes. Because most are taxed as sole proprietorships or partnerships, they are pass-through tax entities, which means federal tax income passes through the LLC onto the individual LLC members. Some states impose a separate tax on top of this, for the privilege of doing business in the state. North Carolina does not do this – another great way in which it saves you money.
In the case that the LLC owners want their business taxed like a corporation, the company has to file a separate tax return. Like almost every other state, North Carolina has a corporation income tax. The difference is that in this state the corporate tax is a flat 5% of taxable income – which is not as much as most other states.
Easy for foreigners
If you already have LLCs in another state, or don’t live in the U.S., it is still very easy for you to form an LLC in North Carolina. In fact, the process is so simple that it is very much like the process for simply starting an LLC here. The only difference is that you need to get a Certificate of Authority, a Certificate of Existence, and instead of paying $200, you pay $250 – which isn’t much at all, for the ease. So if you have a business in another state and are looking to expand, North Carolina is the state to do this in.
TRUiC has an in-depth step-by-step process on how to start an LLC in North Carolina. Visit their site if you’re convinced or need more convincing.