The Laws About Llcs in North Carolina … Business Plan
Pages: 7 (2351 words) | Style: n/a | Sources: 10
Forming a Limited Liability Company in North Carolina
What industry are you doing business in?
This company competes in the service industry as a private protective service.
What state are you doing business in?
What is your business name?
"Professional Private Protective Services, LLC."
List in detail exactly & specifically what your company does
Generally, companies competing in the private protective service industry provide investigatory, bodyguard, consulting, monitoring and data security services (Bailin and Cort 58). More specifically, Professional Private Protective Services, LLC provides comprehensive bodyguard services for the residents of North Carolina, including personal escort and transportation services.
What are the three rules that must apply when naming your LLC?
According to the U.S. Small Business Administration, the three general rules that must be followed in naming an LLC are as follows:
The name must be different from an existing LLC in the state in which the company is registered;
2. The name must indicate that the company is an LLC (such as "LLC" or Limited Company"); and,
3. The name must not include words that are restricted by the state in which the company is registered (Limited Liability Company 2).
B. What state licenses & permits are needed & which state agencies do you need to register with?
This company needs to be registered with the North Carolina Private Protective Services Board. In addition, a private protective services license is required from the North Carolina Private Protective Services Board, and the company is required to comply with North Carolina Private Protective Services N.C.G.S. 74-C as well as the Private Protective Service Board's Administrative Rules and Regulations pursuant to Private Protective Services 12 N.C.A.C. 7D (Licensing Process 3).
C. What federal licenses & permits are needed & which federal agencies do you need to register with?
Currently, no federal licenses or permits are needed to operate a private protective services LLC in North Carolina.
D. What local agencies do you need to register with & what local permits do you need?
Currently, LLCs operating in North Carolina are not required to register with any local agency.
E. You must file the Articles of Organization-
1. What are the Articles of Organization? (This should be a detailed description, not just a sentence or two).
An LLC's articles of organization are the document that is used to legitimize the enterprise and sets forth the company's name, address and its constituent members (Limited Liability Company 3). According to one authority, "Your limited liability company's (LLC) 'articles of organization'" act as a charter to establish the existence of your LLC in your state, and set forth certain basic information about the new business" (Forming an LLC 3).
2. What must be included on this form?
Articles of organization for LLCs operating in North Carolina must include the following information:
1. Company name;
2. Dissolution date;
4. Principal office address;
5. Managers -- the owners of the LLC are presumed to manage the company unless otherwise specified in the LLC (Ellsworth 1091); and,
6. Registered office and agent (Organizing Your LLC in North Carolina n.d.)
In addition, the articles of organization must also include the name and business address of each individual signatory as well as the capacity in which these individuals are executing the document (e.g., member or organizer) (Organizing Your LLC in North Carolina 5).
3. How do you file it/which agency do you file it with?
The articles of organization are filed with the North Carolina Secretary of State (Organizing Your LLC in North Carolina 11).
F. LLC Operating Agreement -- What is it and what exactly is included in this agreement? (This should be a detailed description, not just a sentence or two).
The operating agreements for LLCs operating in North Carolina typically include the following information:
1. Formation and capital: This section sets forth the respective contributions that each member will make, and stipulates whether noncash contributions will be allowed;
2. Member voting rights: This section establishes the respective voting rights for each member;
3. Operational issues: This section stipulates whether the LLC will be managed by members or contracted managers hired from outside the firm; in addition, this section also stipulates what type of authorization is required for day-to-day operations and the limits of authority of managers;
4. Member relations: This section describes what type of consent is required to admit new members to the LLC;
5. Dissolution issues: This section stipulates what events will result in the dissolution of the LLC and what level of member consent is required in order to continue the business otherwise (Fiore 36).
G. Is the LLC Operating Agreement considered a binding legal contract?
According to the U.S. Small Business Administration, LLC operating agreements are binding legal contracts (Operating Agreements: The Basics 3).
H. Managing and Operation of your LLC
1. Does your state require a document that spells out in writing how the company will be managed?
Although North Carolina does not require a separate document for this purpose, this information can be included in the articles of organization (Organizing Your LLC in North Carolina 5).
2. Does your state distinguish between a member-managed LLC and a manager-managed-LLC?
North Carolina does not currently distinguish between these two management types.
3. What are the key differences between a member-managed LLC and a manager-managed-LLC?
Members are also owners of the LLC while outside managers are not.
I. Hiring Employees-Your company will initially hire 55 employees; federal law requires you, as an employer, to verify an employee's eligibility to work in the United States.
1. Within how many days of hiring a new employee do you have to complete an Employment Eligibility Verification Form (commonly referred to as an I-9 form)?
Employers are required by federal law to complete an Employment Eligibility Verification Form I-9 within 3 days of employment (Employee Eligibility 2).
2. What exactly does this form require from you (needs to be a through step-by-step process listing exactly in detail what you must have from the employee, and be very detailed, not just a sentence or two)?
The Employment Eligibility Verification Form I-9 requires the following information from newly hired employees:
1. Employee name;
2. Other names used;
3. Employee address;
4. Date of birth;
5. U.S. Social Security Number;
6. Email address and telephone number (this information is optional);
7. Citizenship status (i.e., U.S. citizen, noncitizen national, lawful permanent resident, or alien authorized to work in the U.S.) (Form I-9).
8. Preparer and/or translator certification (Employee Eligibility 4).
Employers are required to physically examine the above-listed documents; if photocopies of these documents are created, they should be photocopied for all new hires (Employee Eligibility 5).
3. What do you do with the I-9 Form once it is completed?
The I-9 Form is retained by the LLC (Employee Eligibility 3) as described below.
4. How long do you do have to keep a record of the I-9 form?
Although the I-9 Form is not filed with the federal government, federal law requires that all form I-9s be maintained for a period of 3 years after the hire date for active employees and for 1 year following the end of the employee's employment, whichever period of time is later (Employee Eligibility 3).
J. How will you finance your company? Types of Financing: There are two types of financing: equity financing and debt financing. Answer the questions about each and choose which form you will use and why!
1. Equity Financing- -- What is it (two/three solid detailed paragraphs explaining in your own words what equity financing is), how do you obtain it & is this the best option for your company (Y/N)? Explain.
Investors typically provide equity financing for promising entrepreneurial start-ups (Allen and Hall 116). In this regard, Allen and Hall report that, "Entrepreneurs fundamentally require equity financing to obtain productive resources, such as specialized labor and capital" (116). Equity financing can be obtained from so-called "angel investors" or in the form of venture capital (Howard 148). There are some drawbacks to this alternative financing approach, however, For instance, as Allen and Hall point out, though, "In order to attract this type of investment, entrepreneurs (and any other existing owners) must give up equity in order to obtain the financing" (116).
Notwithstanding this consideration, equity financing represents an optimal approach for some LLCs because of the advantages this financing approach provides compared to debt financing (discussed further below) which requires an ongoing financial commitment from the enterprise (Allen and Hall 117). Moreover, equity financing marginal tax rates in the U.S. are considered in line with other countries (Wack 38). In this regard, based on the expenses that will be involved in employing 55 new employees and provisioning them with the resources they will need to perform their jobs, equity financing represents the optimal financing alternative for this company based on the constraints involved in debt financing which are discussed further below.
2. Debt Financing -- What is it (two/three solid detailed paragraphs explaining in your own words… [END OF PREVIEW]
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