Free BOI/CTA filing for all clients. Receive your LLC, EIN, and bank account SAME-DAY. Learn more.

By The Wyoming LLC Attorney Team

May 05, 2023
Home
  1. North Carolina Single Member LLC

North Carolina Single Member LLC

How to Start an LLC

Summary

The article explains the concept of North Carolina Single Member Limited Liability Company (SMLLC) and its benefits. SMLLC provides benefits such as potential tax savings, limited liability protections, privacy, and a more professional reputation. The article also details how to form a Single Member LLC and how it is taxed.

If you want to set up an NC Single Member LLC, there are a few things you may need to consider. An NC LLC has a lot of benefits, but it can be complicated to know whether this business structure is the right thing for you. In addition to this, there are also variations of LLCs in NC, such as anonymous LLCs and series LLCs, so entrepreneurs need to establish which structure best suits their needs and requirements. To find out more about the rules for single member LLCs in North Carolina and for more information on what a single member LLC is, read the article below.

What is an LLC?

In North Carolina, an LLC is a limited liability company in which the owners are not personally liable for any debts or liabilities that the business faces. This means that your assets are protected, and only those owned by the company are at risk in the case of a lawsuit or other issue. When you opt for a North Carolina limited liability company, you get the tax and limited liability benefits of a corporation and the flexibility of a partnership or sole proprietorship. This comes alongside a lot more benefits, more of which are detailed below.

Start an LLC in North Carolina

What is a Single Member LLC?

An SMLLC, single member limited liability company, is different in that it is a company with only one member or owner. As an SMLLC, you are disregarded under the IRS tax rules. You only register as a single member LLC if there is no more than one member, as the name suggests.

SMLLC Benefits

There are a lot of benefits to choosing a single member LLC. These range from limited liability protection and money savings to privacy and a better reputation from the moment that you set up your business. To make sure you know what you can gain before you make your choice, here are some of the major benefits that you could enjoy.

Potential tax savings vs sole-proprietorship

When you register as a single member LLC, you could find that you have to pay less in tax than you would as a sole proprietorship. In business profit is key and any money that you can save can help you to build your business and grow, so making sure to save money through this simple change is a great option for you.

Limited liability protections

One of the most major benefits of having a single member LLC is the protection that it can afford you. When you choose an LLC, you are safe from the risk of losing your own personal assets even if your company faces lawsuits or any other misfortunes. As an LLC, only the assets that are part of the company can be used to settle legal action, and your own property, items or other assets cannot be used. This means that by choosing an SMLLC you are protecting yourself and your family from any potential problems with your business. This makes it the best option, especially if you are starting a medium or high risk endeavour.

Privacy (if formed anonymously)

A further benefit of starting a single member LLC is the privacy that it can allow you. If you choose to form it anonymously, then you don’t have to share any private details publicly. When you form an ordinary LLC, you are required to share your name, address and financial information online. This can be a problem for some, so make sure to register your SMLLC anonymously for added protection and privacy. This is as simple as choosing a state that allows anonymous LLCs such as Nevada, Delaware, New Mexico or Wyoming. There are also methods that you can use to gain anonymity in other states like the double LLC method.

More professional than a sole-prop

Another benefit that you can gain from a single member limited liability company is that it is seen as much more professional. If the type of business makes the difference between others seeing you as professional or not, then it is definitely worth opting for an LLC. When you are just starting out in business or you need to prove your business and build your brand, reputation is key. You can give yourself a much better chance at growing your business simply by choosing to register it as a SMLLC and bolster your reputation from the beginning.

With this wide range of benefits, it is sure that a single member LLC is worth it. Furthermore, with a start up process no more difficult than an ordinary LLC, there is no reason not to opt for an SMLLC when it comes to your new business.

How to Form a Single Member LLC

Forming a single member LLC is actually fairly straightforward if you have experience in the area. You can file a single member LLC in the same way as a standard one. The only difference between the two is that a single member LLC only has one owner. You may need to mention that you are a single member LLC in the articles that you file, however this is dependent on the state you live in. To make sure that everything is filed correctly, the best way to set up an SMLLC is to enlist the help of a professional who has some practice in the area.

How is a Single Member LLC Taxed?

When you set up a single member LLC, by default it is a disregarded entity. However, you have the option to change this. If you choose, you simply have to file your decision with the IRS so that your SMLLC can be taxed as a C or S-Corp. Since an SMLLC has only one member, it can’t be taxed as a partnership. The taxes that an SMLLC has to think about, depending on whether you choose to be disregarded as an entity or not, include:

  • Federal income tax
  • State income tax (if any)
  • Self-employment tax

Employer Identification Numbers

An EIN or Employer Identification Number, is a number which is used to identify a business entity with a unique code. It can also be known as a Federal Tax Identification Number. It is nine digits and allows the business to be easily recognized.

Why does a single member LLC need an EIN?

An EIN is useful as it is something the IRS requires in order to recognize a business for tax reasons. You could see it as similar to a social security number. Every company must have one of these in order to open a bank account. You can obtain an EIN by either filing Form SS-4 with the IRS or enlisting a third-party service to file for you.

How to get an EIN as a single member LLC?

Getting an EIN is actually a very simple process. All you have to do is fill out the appropriate form which can be found online. Form SS-4 has all of the details that you need to correctly apply for an EIN, and once you have one you can complete your taxes as required.

There are a lot of variations when it comes to LLCs, including anonymous LLCs and series LLCs, so it can be hard to work out which is best for you. To make the process as smooth as possible, it can help to get professional help. Whatever you decide, starting a limited liability company is a great option that can afford you plenty of advantages.