LLCs and partnerships in North Carolina are two of the possible business structures you could set up. They are similar but have a few key differences that you should know when you’re choosing between the two.
One of the biggest deciding factors on whether you set up an LLC or partnership in North Carolina is how comfortable you are with personal liability. Partnerships come with personal liability, which means you and your business partners are responsible for the business’s debts and legal issues. An LLC, in contrast, separates you from the business. Business law keeps your personal assets safer as a result when you form an LLC due to the lack of personal liability.
Loose terms for defining a partnership
Be aware that North Carolina considers a company a partnership when two or more people agree to do business with each other for profit. You’ll need to follow the registration and tax requirements for a partnership unless you set up your business under another type of structure. Having a partnership agreement isn’t legally required, but you should create this document with your partner to protect your interests and prevent conflict.
Assumed name requirements
Partnerships in North Carolina need to file a Certificate of Assumed Name if they name their business something besides their surnames. The filing fee for this form varies based on county. To file the certificate, check the Office of the Register of Deeds in the county where your business is.
An LLC doesn’t expect you to use your surnames. However, if you want to conduct business with customers using a different name than the business title you listed in your Articles of Organization, you need to file a Certificate of Assumed Name. You may also hear this referred to as DBA, or doing business as.
Naming requirement for LLCs
When you form an LLC, North Carolina business law requires you to include “LLC” in the name. You can use variations of “LLC” in the name, such as L.L.C., Limited Liability Company, ltd. liability co., limited liability co. or ltd. liability company.
Many people prefer to set up an LLC because it holds the business liable for business-related issues rather than them personally. Aside from this difference, the two business structures are fairly similar.