What North Carolina LLCs should be doing now

Last week we talked about how to keep your corporation in good standing. This week, we focus on the LLC. While one benefit of an LLC is less formality, there are still some actions required to protect the owner’s limited liability.

1. You should have prepared and sent W-2s to employees and 1099s to contractors or vendors by January 31st. 2. The LLC must file annual reports with the NC Secretary of State when it files its company tax return. For multi-member LLCs, that is generally March 15. Single-member LLCs don’t file a return for the LLC, and only file a Schedule C with the owner’s personal tax return. That form is due by April 17 this year. Click here for a video on how to do this. Click here to go right to the annual report site.

NC Attorney General Josh Stein just sent out this alert regarding annual report scams. Don’t fall for any of these.

3. A single-member LLC does not have to file a tax return for the LLC. All income and losses flow through to the personal income tax return of the owner on Schedule C. LLCs with two or more members must file a partnership tax return, but will not pay any income tax at the company level. For more information, click here or contact a CPA.

4. If your operating agreement requires annual meetings of members or managers, be sure to hold them. There is no independent requirement under NC Law. This is a good time if you need to set annual valuations for buy-out reasons.