When starting an LLC, you get told a lot on how to form the actual LLC. But, often, many people don’t research further than this – like how they will maintain their LLC, or sometimes later on they find things that they do not like about having an LLC. So, here are a few basic industry tips you should know about before starting your LLC.
What is ‘piercing the corporate veil’?
One of the most important parts of having an LLC is, of course, its limited liability. So, it would be quite pointless if you found out that your limited liability company does not actually have limited liability. This happens more often than you’d think, as people can make small mistakes that ruin it. This can happen when your personal and business accounts mix and you start to get confused between the two, or sign important documents with home information rather than that of the business.
So, when you make it through the LLC formation process, it’s important to take some steps to protect your personal assets and establish your business as a separate, independent entity.
How can you avoid piercing the corporate veil?
Open a business bank account. This is great for many reasons. Most obviously, it separates your personal assets from your company’s assets, which is necessary for personal asset protection. As well as this it makes things like accounting and tax filing so much easier because everything is in one place.
Get a business credit card. This also helps separating assets by separating personal and business expenses. It’s also helpful in terms of raising capital because it will build up your credit history.
This is important to heed especially if you are a new business. Everything is new so it can get hard to stay on top of things like getting permits, licenses, filing your annual reports, and paying taxes. But, this is very serious business. Failure to comply with this can lead to fines, tax penalties, a bad reputation and even complete dissolution of your LLC, which no one ever wants.
To operate your North Carolina LLC, you need to comply not only with federal, but state and local government regulations too. So, you need to make sure you research carefully and plan accordingly, getting all of your licenses, permits and taxes in order. To make life easier for yourself, you can have a professional business licensing service to help you figure out what sort of licenses you need.
Have taxes and reports in order
If you’re selling a physical product you’ll need to have a seller’s permit and also pay sales tax on your items. As well as this, if you have employees you’ll need to register for unemployment insurance tax through the North Carolina Division of Employment Security. You’ll also need to sign up for employee withholding tax.
As well as this, North Carolina also requires after your first year and every consecutive year that you file an annual report. If you miss this state filing, or any for the matter, you could face fines or automatic dissolution. A good thing about having an LLC in North Carolina is that they do not charge late fees – but they will dissolve your LLC within 60 days if you do not file an annual report.
Reduce administrative burden
When you have an LLC, often people do not realise how difficult it will actually be to maintain one. As seen above, there are many, many things that need to be watched out for, and it can be hard to do it on your own. So, we recommended getting outside help – from registered agents, and accountants. Registered agents will tell you when deadlines are coming up and look after important documents for you. Meanwhile hiring an accounting service, or using your own accounting software means your books are always in order, making your life so much easier.
TRUiC has a great deal on having an LLC in NC. Visit their site to read more.