Question: What is a Limited Liability Company (LLC)?

Answer:
The LLC is a type of business organization that is formed and regulated by the state.  In order to form a LLC in the State of North Carolina, you can go to www.sosnc.com – Corporations Division to find the instructions, paperwork and fees.

The “Articles of Organization” is the legal document that must be filed in the State of North Carolina to form a LLC.  The owners of a LLC are called members.  LLC’s are managed by the members or by managers who may or may not be members.

A Limited Liability Company combines the best features of the corporation and the sole proprietorship/partnership.  Limited liability means that the creditors of the business cannot normally go after the owners.  Another way of saying this is that an investor in an LLC normally has at risk only his or her share of capital paid into the business.  Please remember that you still have liability for personally guaranteed debts and it is still essential to get a reasonable amount of appropriate liability insurance to cover potential personal and business liabilities arising from LLC’s operations

The tax advantage of “passing through” early years business losses to the owners and the ability to divide profits and losses any way you wish are two advantages of the LLC.

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