Business Plan on "Laws About Llcs in North Carolina"
Business Plan 7 pages (2351 words) Sources: 10
[EXCERPT] . . . .
As the term implies, debt financing involves obtain business capital through some type of loan arrangement, typically with a commercial financial institution (Wu and Hedges 422). In this regard, Wu and Hedges advise that, "Small- to medium-sized enterprises tend to use short-term debt financing from commercial lenders, especially institutional lenders and, in essence, renew them for long-term debt financing" (423).Although debt financing may be appropriate for some types of small businesses, the recurring debt service expenses may be too onerous for many start-ups (Wack 37). In fact, debt financing may restrict an LLC's future growth (Slavec and Prodan 105), an outcome that is contrary to the goals of this company. In sum, debt financing represents a suboptimal approach to obtaining the business capital needed for Professional Private Protective Services, LLC's planned expansion and future growth compared to equity financing.
K. LLC Taxes
1. How are federal income taxes treated and how are they paid?
According to Beesley, LLcs do not pay federal income taxes. Rather, "all profits and losses 'pass through' the business to each member of the LLC" (Beesley 2).
2. How must your company file the federal tax return?
Individual LLC members are required to report their profits and losses from their LLC on their personal federal tax returns (Beesley 2).
3. Does your state tax LLC's?
Although LLCs do not pay federal income taxes, some states apply an annual tax to LLCs (Beesley 2). North Carolina treats LLCs the same as partnerships or corporations
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L. What are the Advantages of an LLC? List (and discuss) at least three. (Give a detailed description and discussion for each advantage)
Today, LLC s are the business organization of choice for growing numbers of small businesses in the United States because of the numerous advantages this business organization type provides (Bishop and Keating 455). Some of the main advantages that are associated with the LLC business organization form include the following:
1. LLC partners have complete management and control of the business while also enjoying limited liability;
2. An LLC can also work well for start-up companies because they can deduct the losses that they expect in the first few years of business; and,
3. The additional required record keeping on management decisions can help to avoid disputes among partners (Urquhart-Brown 45).
M. What are the Disadvantages of an LLC? List (and discuss) at least three. (Give a detailed description and discussion for each disadvantage)
Conversely, LLCs are not appropriate for all types of businesses due to the following disadvantages:
1. Ongoing record-keeping is required;
2. LLCs with more than 20 partners must hire a manager to operate the enterprise; and,
3. Articles of organization are required to be filed by all 50 states and a filing fee is charged (Urquhart-Brown 45).
O. Dissolution of the LLC-
1. What are the steps you must take to dissolve your LLC (detailed and specific)?
The steps required for the voluntary dissolution of an LLC in North Carolina are set forth in the articles of organization and operating agreement and include obtaining written consent from all LLC members and filing articles of dissolution with the North Carolina Secretary of State. Other winding-up steps following the foregoing include the following:
Collecting LLC assets;
Disposing of LLC property that will not be distributed in kind to members;
Discharging or making provision to discharge LLC liabilities; and,
Distributing any remaining assets to LLC members (How to Dissolve an LLC in North Carolina 4).
Works Cited
Allen, W. David and Hall, Thomas W. (2011, Summer). "Entrepreneurs, Investors and Equity Financing: A Resource-Economic Analysis." Review of Business 31(2): 115-120. Print.
Bailin, Paul S. and Cort, Stanton G. (1999, April). "Industry Corner: Private Contractual Security Services: The U.S. Market and Industry." Business Economics 31(2): 57-61. Print.
Beesley, Caron. (2012, November 13). "6 Things You Need to Know About Your Tax Responsibilities as an LLC." U.S. Small Business Administration. Web.
Bishop Carter G. and Keating, Robert R. (2009, Summer). "Limited Liability Companies at 20." Suffolk University Law Review 42(3): 455-460. Print.
Ellsworth, Keen L. (1999, January 1). "Utah Limited Liability Companies: The 'Ugly Ducklings.'" Brigham Young University Law Review 92(4): 1091-1093. Print.
"Employee Eligibility." (2015). U.S. Small Business Administration. Web.
Fiore, Nicholas. (2009, August). "LLC Operating Agreements." Journal of Accountancy 182(2): 36. Print.
"Forming an LLC." (2015). FindLaw. Web.
"How to Dissolve an LLC in North Carolina." (2015). Nolo. Web.
Howard, Mark N. (2007, December). "The Challenges of Securing Capital for Your Business." Black Enterprise 35(5): 147-150. Print.
"Limited Liability Company." (2015). U.S. Small Business Administration. Web.
"Licensing Process." (2015). North Carolina Department of Public Safety. Web.
"Operating Agreements: The Basics." (2015). U.S. Small Business Administration. Web.
"Organizing Your LLC in North Carolina" (n.d.). North Carolina Secretary of State. Web.
Slavec, Alenka and Prodan, Igor. (2012, January 1). "The Influence of Entrepreneur's Characteristics on Small Manufacturing… READ MORE
How to Reference "Laws About Llcs in North Carolina" Business Plan in a Bibliography
“Laws About Llcs in North Carolina.” A1-TermPaper.com, 2015, https://www.a1-termpaper.com/topics/essay/forming-limited-liability-company-north/4537171. Accessed 28 Sep 2024.
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