Forming an LLC is a smart move for protecting your business and personal assets—but not all LLCs are created equal. Depending on your industry, income, and long-term goals, the wrong LLC setup could cost you in taxes, compliance headaches, or worse—missed opportunities.

At Polaris Tax & Accounting, we help clients across Asheville, Charlotte, Huntersville, and Lake Norman choose the right structure the first time—so they can focus on building, not backtracking.

Here’s what you need to know.

1. Single-Member LLC for Rentals (Schedule E)

Best for: Landlords and real estate investors

Most North Carolina landlords start here. It’s simple, keeps your personal assets protected, and is easy to maintain. If a tenant sues or damage occurs, your personal assets are shielded.

📌 Pro Tip: Don’t forget to update your insurance and file a separate state Annual Report to stay compliant.

2. Single-Member LLC for Freelancers or Side Hustles (Schedule C)

Best for: Creatives, consultants, and service providers

This gives you legitimacy for clients, asset protection, and tax flexibility. While you won’t save on self-employment tax yet, you set the foundation for future strategies.

📌 If you’re in Asheville or Charlotte and taking 1099s, you need this ASAP.

3. LLC Taxed as an S Corporation (1120S)

Best for: Business owners making $50K+ in net profit

Once you hit consistent profit levels, switching to S Corp status can save you thousands in self-employment taxes. You’ll pay yourself a reasonable salary and take the rest as distributions.

📌 Read our guide: Why Your Last-Minute S Corp Setup May Be Hurting You

4. Multi-Member LLC (Partnership – 1065)

Best for: Partnerships between individuals or spouses

If you’re starting a business with your spouse, family, or friend, this gives you flexibility—but also adds complexity. Partnership returns require strong bookkeeping and planning.

📌 Always have an operating agreement, even if you’re “keeping it simple.”

5. Series LLC (Not recognized in NC)

Note: North Carolina does not currently recognize Series LLCs. If you invest in multiple properties across states like Texas or Nevada, this might be worth considering—but not locally.

📌 We’ll advise based on your real estate footprint, not just your zip code.

6. PLLC (Professional Limited Liability Company)

Best for: Licensed professionals (therapists, architects, attorneys)

If you hold a license from a North Carolina state board, you may be required to form a PLLC instead of a standard LLC. The rules vary by profession—don’t DIY this step.

Bonus: Should You Use a Registered Agent?

Even if you work from home, North Carolina requires a registered agent with a physical address in the state. You can use your home, a commercial agent, or even Polaris in some cases depending on your setup.

📌 Read our Registered Agent Best Practices »

Final Thoughts: Get It Right from the Start

LLCs are flexible—but only when you structure them properly. At Polaris, we help NC clients:

  • Choose the right LLC setup for their goals

  • Convert to S Corps when ready

  • Fix bad formations from DIY sites or old accountants

  • Stay compliant with NC Secretary of State filings

👉 Schedule your LLC consultation now

Let’s build your business the right way—starting with the right entity.