Disclaimer: the information shared here is for information purposes only and from my knowledge as a State of NC LLC operator
When we started Art Beyond, it was necessary for Elizabeth and I to create a Limited Liability Company (LLC) for our business situation as a “partnership.”
For many of you, as sole proprietors, it is not required for you to create an LLC; however, there are advantages to running your business under an LLC, including creating separation between your business assets and your personal assets.
The state of North Carolina makes it pretty easy to file paperwork for an LLC yourself. First, you verify that the LLC name is available and then you fill out a 2 page application and pay $125. And you can do it all online here. Too easy.
After the paperwork is processed, you’ll receive your Articles of Organization in the mail from the North Carolina Department of Secretary of State. You can start officially using the LLC name and use that paperwork to set up an official business bank account (remember, you need one and we talked about why here).
This filing is a matter of public record, this means anyone can pull up that information, including your name and official business address listed on the paperwork. So you save yourself money… but you also bring yourself a bunch of junk mail.
A client recently asked me to look over some mail that they received after filing their LLC; they weren’t sure if the mailings were legitimate. With their permission, I’m going to share some of those here and tell you how to spot the ones trying to take advantage of you.
This one is a solicitation for Labor Law Posters.
First, if you do NOT have W-2 employees, you should not need to post Department of Labor Workplace Posters. If you DO have W-2 employees, or you want to find out more information, you can that on the Department of Labor's website here.
Second, the fine print on the bottom shows that this company is NOT associated with NC State or Federal Government Agencies.
If you need to display these posters in your place of business for employees, then you may buy them from a place of your choice, or download them for printing from the Department of Labor website.
This Certificate of Existence solicitation states that the certificate is “optional” and not affiliated with government agencies. It suggests that a Certificate of Existence "may" be needed for renewing business licenses or getting a loan but in my experience, this is not true. This document states that the organization is NOT affiliated with any government or state agency AND it expressly states that this notice is a solicitation.
This Certificate of Good Standing solicitation not only admits to being NOT affiliated with government agencies, it states that the certificate is elective, AND that it’s available directly from the State of NC for a cheaper price! This form is used as proof that a business has all of its tax accounts in good standing with the State. You don’t need this form to run your business, and if you ever wanted or needed one, you could order it directly from the State of North Carolina here.
This one's a doozy. They’re not only suggesting you “MAY STILL HAVE SOME ITEMS PENDING” but they want to help you with all of these optional items for the low price of $399.89.
Let me start by saying that the “Time Sensitive Solicitation” designation lets you know you can toss this one out. There’s an additional disclaimer in the top right corner indicating that this is an advertisement and that these documents offered are available for a lesser price or even for free direct from sources.
As previously mentioned, the Certificate of Status is both optional and unnecessary and the Labor Law Posters may not apply to you and if they do, you can download them to print yourself.
The Employer Identification Number (EIN) filing information included here is very misleading. It is true that if you plan to hire W-2 Employees, you must have an EIN, but otherwise you may not need one at all.
If you are a sole proprietor,
You may use your own social security number to open a business bank account with your LLC’s name on it
You can file taxes for your business with your social security number
You can send contractor 1099s with your social security number as the Payor's Tax ID
An EIN is helpful for keeping your social security number off of documentation you have to share (like W-9s you send out to receive payment and 1099s you send out to contractors) and it is needed to build credit for your business separate from your personal credit, BUT it is NOT needed to file/use/maintain an LLC.
Esther, I haven't filed yet. Is there any way to avoid all of this?
Absolutely, you can use a Registered Agent. You will have to pay for the service, but you will receive ZERO unsolicited mailings and will have support in the event that there is an objection by the state to the name you chose (this is rare, but it actually happened to someone I know). When you pay a registered agent to file the paperwork, they use an address of their own for all addresses listed on the filing document so that any junk mail comes to them and not you. Then they turn over the LLC to the managing member(s), aka YOU.
I personally used Northwest Registered Agent to file the Art Beyond LLC paperwork with the State of North Carolina.
To have Northwest Registered Agent file an LLC on your behalf in North Carolina, it costs about $400; however, disclosing as little information as possible on your behalf is part of their business model.
You can find information on using Northwest Registered Agent to file an LLC here, and find more information on their privacy practices here.
As always, I hope this information was helpful.
❤️- Esther
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