Side-by-side comparison of Limited Liability Company and Sole Proprietorship for North Carolina businesses. See costs, tax treatment, and which structure fits your situation.
| Feature | LLC | Sole Prop |
|---|---|---|
| Filing fee (North Carolina) | $125 | $0 |
| Annual fee | $0/yr | $0/yr |
| Liability protection | Yes | No |
| Self-employment tax | On all profit | On all profit |
| Formation complexity | low | none |
| Ongoing complexity | low | none |
| Can raise funding | Limited | Limited |
Pros
Cons
Pros
Cons
⚠$200 annual report fee
⚠Franchise tax based on net worth or appraised value of property
Our free quiz calculates your actual tax burden under each entity type based on your income and North Carolina tax rates.
Take the QuizLimited Liability Company: Liability protection with pass-through taxation. The most popular choice for small businesses. Sole Proprietorship: The simplest structure. You and your business are the same legal entity. In North Carolina, LLC filing costs $125 and Sole Prop costs $0.
Both have similar tax treatment. The best choice depends on your specific income level and North Carolina tax situation. Use our free quiz for exact numbers.
LLC filing fee: $125, annual fee: $0/year. Sole Prop filing fee: $0, annual fee: $0/year. North Carolina also charges a $200/year franchise tax.
Disclaimer
This comparison is for educational purposes only and does not constitute tax, legal, or financial advice. Filing fees, tax rates, and regulations may have changed since this data was compiled. Verify all information with the North Carolina Secretary of State and consult a qualified CPA or tax attorney before making entity selection or tax election decisions.
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