Choosing the right type of business entity for your business is a vital step. There are a variety of corporate forms to choose from, such as a corporation, LLC, or partnership. There are also various reasons to choose one form or another, depending on your unique circumstances and needs. And, depending on where your business is located and what line of business you’re in, there may also be other paperwork to submit to the city, state, or federal government.
DYE CULIK PC is a Charlotte, North Carolina law firm that can help you with setting up your business and choosing the right business structure. Let us handle the paperwork so you can concentrate on growth and success. We can help with any type of business entity, including:
C-Corporations. C-Corporations are the most common type of corporation. It is an independent legal entity owned by shareholders and usually managed by officers and directors. North Carolina corporations are regulated by the Business Corporation Act, N.C.G.S. § 55.
S-Corporations. An S-Corporation is like a C-Corporation, but it is only taxed at the individual level, rather than taxed at both the corporate and individual level. Additional paperwork must be promptly filed with the IRS in order to get the benefits of being an S-Corporation.
Limited liability companies (LLCs). LLCs are quickly becoming the preferred business entity form for smaller business, and even many large ones. There are fewer recordkeeping responsibilities, and they are taxed only at the personal level. North Carolina LLCs are regulated by the Limited Liability Company Act, N.C.G.S. § 57D.
Partnership. A partnership is a voluntary association of two or more persons who jointly own and carry on a business for profit. Partners usually agree to proportionally share the business’s profits and losses. North Carolina partnerships are governed by the Uniform Partnership Act, N.C.G.S. § 59.
Sole proprietorship/DBA. A sole proprietorship, or a d/b/a (“doing business as”), is the simplest way to do business. It is usually the worst, because your personal assets are not protected from the claims of potential creditors, vendors, clients, or customers.
Depending on what type of company you start, you may need one or more of the following documents to govern the rights and responsibilities of the company and its owners and managers:
Articles of incorporation. The articles of incorporation are what is filed with the state to form your corporation.
Corporate bylaws. Corporate bylaws contain specific information about how your corporation is run, selection of officers and directors, shareholder rights, and corporate rules.
Articles of organization. Articles of organization are filed with the state to form an LLC.
Operating agreement. Like bylaws, an operating agreement sets out how the LLC will be operated and managed.
Partnership agreement. A partnership agreement is a contract between partners that sets out how the partnership will be managed, and how profits and losses will be allocated.
