How to Start an LLC in North Carolina

How to Start an LLC in North Carolina: If you’re looking to launch a business in North Carolina, starting a Limited Liability Company (LLC) may be the right choice for you. An LLC provides personal liability protection for its owners while giving them flexibility in managing and taxing the business. This guide provides a step-by-step process for starting an LLC in North Carolina. From choosing a unique name to registering with the state and obtaining necessary licenses and permits, Webinarcare Editorial Team will walk you through setting up your new business entity. So grab a pen and paper, and let’s get started!

On this page, you’ll learn about the following:

What is a Limited Liability Company?
Steps on How to Start an LLC in North Carolina
Cost to Form an LLC in North Carolina
Advantages of Creating North Carolina LLC
FAQs

What is a Limited Liability Company?

A Limited Liability Company (LLC) is a type of business entity that combines a corporation’s limited liability protection with a partnership’s tax benefits. LLCs are popular among small business owners for their flexibility and ease of formation. In North Carolina, an LLC must have a unique name and file Articles of Organization with the Secretary of State. Depending on their business needs, LLCs may also elect to be taxed as a corporation or an S-corp. Owners of an LLC, called members, are not personally liable for the company’s debts and losses, and the company’s profits and losses are passed through to the member’s personal tax returns. This makes an LLC an attractive option for those seeking personal liability protection and simplified taxation.

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Steps on How to Start an LLC in North Carolina

To form an LLC for your business, you must follow the guidelines that include naming your LLC, hiring a Registered Agent, filing your Articles of Organization, creating your LLC operating agreement, getting an employer identification number, opening a bank account and getting business licenses and permits.

Step 1: Name your LLC in North Carolina

After you have decided on the idea to form an LLC in North Carolina, deciding the name for your LLC is significant. There is a complete guide on LLC name guidelines for you to have a proper LLC business name. Here are some regulations you must follow while naming your LLC,

The name should not be confused with a government entity.
The name should be unique.
The name should be available to use.
Any other business does not use the name.
The new name must include “LLC” if it is a limited liability company.

In North Carolina, if you do not wish to file your LLC right away but want to hold the name that you have decided on, then you can reserve your LLC name for 120 days. You must file a name reservation application in North Carolina Secretary of State to keep the name.

Recommended: We recommend a professional service that can offer you unlimited name search, trademark and copyright registration at a reasonable price. We recommend using –
LegalZoom – ($0 + State Fees for LLC Formation)

You can register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for filing North Carolina DBA (doing business as). In this manner, you can choose any name you desire for your business. A DBA allows a company to operate under the name of the person or entity who owns it. If you have decided to file for a DBA, you can file it in two methods, by mail and in person. However, before filing a DBA, you should know that you need to renew your DBA from up to Indefinite, which costs around $26.

Step 2: Hire a Registered Agent in North Carolina

Hiring a Registered Agent in North Carolina is a must since a Registered Agent is a person or business entity responsible for receiving important legal documents on behalf of your North Carolina LLC. Most states require you to designate a Registered Agent when forming your LLC.

The qualifications of a Registered Agent vary depending on the jurisdiction. Still, generally, a Registered Agent must meet the following criteria:

Availability: A Registered Agent must be available during regular business hours to receive and process legal documents and official correspondence.
Physical Address: A Registered Agent must have a physical street address within the state where the LLC is registered. This address, known as the registered office, cannot be a P.O. Box.
Residency or Authorization: For individuals serving as Registered Agent, they must be residents of the North Carolina where the LLC was formed. A business entity acting as a Registered Agent must be authorized to do business within that state.
Age: A Registered Agent must be at least 18 years old.
Good standing: A Registered Agent should not have any legal or financial issues that impede their ability to fulfill their duties.

Choosing a reliable and responsible Registered Agent is essential, as failure to receive and respond to legal documents can seriously affect your business. Some businesses use professional Registered Agent services to ensure compliance and proper handling of legal matters.

However, if you would like to have an easier process in filing the necessary documents, you can get North Carolina Registered Agent Services.

Step 3: File your Articles of Organization in North Carolina

The Articles of Organization for an LLC is an important document to start your limited liability company (LLC). North Carolina Articles of Organization is a simple document that contains the business name and address as well as the name and address of the person who received lawsuits on behalf of the organization.

Here are the guidelines and specific requirements in filing your Articles of Organization in North Carolina.

1. Obtain the Necessary Forms: Visit the North Carolina’s business filing office website, usually the North Carolina Secretary of State’s office, to download the required forms or file online.

2. Provide the Required Information: Fill in the necessary details in the form, which typically include:

The name of your LLC (must include an LLC designator such as “LLC,” “L.L.C.,” or “Limited Liability Company”)
The purpose of your LLC (a general statement or specific business activities)
The address of your LLC’s principal place of business
The name and address of your registered agent (the person or business entity responsible for receiving legal documents on behalf of your LLC)
The management structure of your LLC (member-managed or manager-managed)
The duration of your LLC, if not perpetual
The names and addresses of the LLC’s organizers or members

3. Sign and File the Form: Submit the completed form in the {state} state office, either by mail, in person, or online. You may mail it at The Secretary of State, Business Registration Division, P.O. Box 29622, Raleigh, NC 27626.

4. Pay the Filing Fee: When you submit your Articles of Organization, you’ll need to pay a filing fee of $125. Make sure to check and include the correct payment with your submission.

5. Receive Confirmation: After your Articles of Organization have been filed and processed, you’ll receive a confirmation from North Carolina, typically a stamped and approved copy of the document or a Articles of Organization.

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Once you have successfully filed your Articles of Organization and it has been approved, your North Carolina LLC is officially formed. However, remember to complete additional steps, such as creating an Operating Agreement, obtaining an EIN, and registering for any required licenses and permits.

Step 4: Create Your North Carolina Operating Agreement

An operating agreement is a document that contains all of your company’s organizational details. Drafting an operating agreement in most states is not required. Yet, having one as an internal document is strongly advised. An operating agreement includes information like-

About Business
Members and management
Capital contribution
Profit Distribution
Change of membership
Dissolution

To understand how an operating agreement works, you should check out how to create an operating agreement in North Carolina.

Recommended: Get oprating agreement drafts ready on your table with a help of a professional service. We recommend using –
LegalZoom – ($0 + State Fee for LLC formation)

Step 5: Get an EIN

After documenting the operating agreement, you should get or request an Employer Identification Number (EIN) in North Carolina. An EIN will serve as the tax ID for your professional corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in North Carolina can be through the following:

Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

In obtaining an EIN for your LLC, you should be aware to ensure that your LLC is eligible for an EIN. You need an EIN if you have employees, operate as a corporation or partnership, or meet other specific IRS criteria. Before applying, gather the required information, including your LLC’s name, mailing address, and the responsible party’s Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). Also, you can apply for an EIN through various methods, including online, by fax, mail, or telephone (for international applicants).

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –
LegalZoom – ($0 + State Fee for LLC formation)

Step 6: Open a Bank Account and Prepare for Taxes

After you have filed for and received your Employer Identification Number, you should open a bank account because you will use this account for yourself, your clients, and your employees.

Your business dealings in North Carolina might be simpler with a US business bank account because it boosts your company’s legitimacy and liquidity. Most banks demand an EIN to create a business bank account for firms other than sole proprietorships. Also, having an EIN makes tax preparation easier. You can anticipate paying employment and corporate taxes with North Carolina LLC.

Opening a bank account is necessary for North Carolina business. If you are still wondering where to open an account in your North Carolina, you should check the Best Bank for Small Business in North Carolina.

Step 7: Get a Business and License Permit

You must get a business license in North Carolina before establishing your LLC. A business license is a legal document granted by a state government body that permits you to conduct business within the area under its jurisdiction. The price of business licenses and permits in North Carolina ranges from $50 – $300. If there is a requirement for a specific license or city-based permit, you must inquire with the North Carolina Secretary of State.

Cost to Form an LLC in North Carolina

Even if you have a business name and structure in mind, you should consider whether you can afford the costs of forming an LLC in North Carolina. Articles of Organization costs around $125. The initial filing fee is $125, and the annual fee is $200.

If you forget to pay the annual fee for your North Carolina LLC, you will have a penalty of $200. However, you can check the North Carolina LLC Cost for additional information.

Advantages of Creating North Carolina LLC

Even though some people decide on what to do with their businesses, some choose to put it in their own individual name, while others still choose to set it up via LLC in North Carolina. Important benefits will help you set up an LLC in North Carolina.

Pass-Through Taxation: The pass-through structure will make the company not pay twice the tax. Most start-ups and entrepreneurs in North Carolina apply for an LLC because of this structure. Pass-through taxation refers to how income and losses from an LLC (Limited Liability Company) are passed through to its members (owners) for tax purposes rather than being taxed at the business entity level. This means the LLC does not pay federal income taxes; the members’ profits and losses are allocated based on their interests. Each member then reports their share of the LLC’s income or losses on their personal tax returns and pays taxes at their individual tax rates.
Ownership Flexibility: If you need sole and primary control over your company’s operations, a sole proprietorship will allow you to do so. If you apply for an LLC in North Carolina with flexibility, you will have default rules set by law and need an operating agreement.
Personal Liability Protection: Personal Liability Protection protects your business from damage, debts, or legal obligations. In personal liability protection, the company’s profits and earnings will stay as is even if your company is about to be sued. This protection of having an LLC in North Carolina can also be extended to the company’s properties and assets. Many start-up companies will benefit from this since most are starting to build a company. Even if liability exists, the LLC in North Carolina will protect its assets.

FAQs

What is an LLC?

An LLC or Limited Liability Company is a type of business structure that offers liability protection for its owners while also providing flexibility in management and taxation.

Do I need to live in North Carolina to form an LLC there?

No, you don’t need to be a resident of North Carolina to form an LLC there.

What does it cost to form an LLC in North Carolina?

It costs $125 to file Articles of Organization and register your LLC with the North Carolina Secretary of State.

Do I need an attorney to form an LLC in North Carolina?

No, you can handle the formation process yourself, but it’s recommended to seek advice from a lawyer to ensure the process is handled correctly.

Can I be my LLC’s registered agent in North Carolina?

Yes, you’re allowed to act as your own registered agent in North Carolina.

What is a registered agent?

A registered agent is someone appointed to receive legal documents and government notices on behalf of an LLC.

Can I change my North Carolina LLC’s name after formation?

Yes, you can change your LLC’s name by filing Articles of Amendment with the North Carolina Secretary of State.

Can I reserve a name for my North Carolina LLC?

Yes, you can reserve a name for up to 120 days by filing a Name Reservation Request with the North Carolina Secretary of State.

How long does it take to form an LLC in North Carolina?

If you submit your LLC formation documents online, it can be processed within 24 hours, otherwise, it can take up to 7-10 business days to process.

Is my LLC name protected in North Carolina?

Yes, your LLC name is protected from being used by another LLC in North Carolina, but it doesn’t protect it from use by other types of entities.

What is a Certificate of Good Standing in North Carolina?

A Certificate of Good Standing is a document that proves your LLC is registered and authorized to do business in North Carolina and is compliant with the state’s requirements.

Do I need to obtain business licenses and permits to operate an LLC in North Carolina?

Depending on your business activities, you may need to obtain business licenses and permits at the local, state or federal levels. You can check the state’s directory of Permision Processes to learn which permits or licenses your business needs.

Do I need an operating agreement for my North Carolina LLC?

Although it’s not required to have an operating agreement, having one can clarify management and ownership roles in the business and prevent future disputes among LLC owners.

Can I be the only member of my North Carolina LLC?

Yes, you can have a single-member LLC in North Carolina, which means you’re the only owner of the company.

How do I obtain an EIN for my North Carolina LLC?

You can obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) online, by fax, or mail. Also, There is no charge for an EIN when filing your tax documentation.

Do LLCs in North Carolina pay annual fees?

Yes, North Carolina LLCs pay an annual report fee of $200 to keep their business in good standing with the state.

Can an LLC file taxes in North Carolina as a disregarded entity?

Yes, a single-member LLC in North Carolina can choose to be taxed as a disregarded entity, which means the owner reports business profits and losses on his/her personal income tax return.

When is the taxes filing due for North Carolina LLC?

The North Carolina income tax return for LLCs is due by April 15th each year.

Does North Carolina have franchise tax for LLCs?

yes, LLCs have to pay franchise taxes every year in North Carolina.

What is the Franchise Tag Payment method?

The amount of franchise tax due in North Carolina is determined by your LLC’s total property or net worth. Another alternate calculation is based upon your LLC’s total income generated.

What goes into the state for determining net worth?

The franchise tax for your LLC in North Carolina is determined in part by taking your LLC’s total assets in tangible property, intangibles property, accounts, or portfolio stocks, personal funds from the capital and surplus, real estates, and parts, piles, and materials necessary for mining.

Can a non-US citizen form an LLC in North Carolina?

Yes, a non-US citizen can form an LLC in North Carolina, but the ownership and tax implications may be complicated, so it’s better to consult with a lawyer or immigration professional.

Does North Carolina recognize Series and Protected Series LLCs?

No, North Carolina currently does not offer a Series LLC or Protected Series option.

Do I need a business bank account for my North Carolina LLC?

Yes, having a separate bank account for your LLC can help organize finances and provide liability protection.

Is there any standard requirement for accounting system for NC LLCs?

While there’s no legal requirement to have a specific accounting system for NC LLCs, it’s a best practice of record keeping and accurately evaluated in different parts of the LLC, especially for taxation planning purposes.

Does North Carolina have a business privilege tax?

North Carolina does not currently have a business privilege tax.

What about Worker’s Compensation insurance for NC LLCs?

Your North Carolina LLC must provide worker’s compensation insurance if they have at least 3 or more employees, including the LLC members themselves, who are not ombudsmen.

Can my North Carolina LLC hold real estate?

Yes, an LLC in North Carolina can hold real estate property, but owners may have to offer personal guarantees for the business.

Can my North Carolina LLC be taxed as an S-corporation?

Yes, an LLC can elect to be taxed as an S-corporation but this requires approval from the IRS.

How do I start an LLC in North Carolina?

To start an LLC in North Carolina, you need to file articles of organization with the Secretary of State.

Is North Carolina a good state to form an LLC in?

North Carolina is a good state to form an LLC in, because it has a business-friendly climate, low startup costs, and a reasonably low tax burden.

How do I choose a name for my North Carolina LLC?

The name of your North Carolina LLC must be unique and not already in use in the state. You can check the name availability website of the North Carolina Secretary of State.

What is the cost of starting an LLC in North Carolina?

The cost of starting an LLC in North Carolina is $125.

Can I form an LLC in North Carolina if I live in another state?

Yes, you can form an LLC in North Carolina even if you live in another state, as long as you have a registered agent address in North Carolina.

What is a registered agent, and do I need one for my North Carolina LLC?

A registered agent is someone who receives legal notices and documents on behalf of your LLC. You need a registered agent for your North Carolina LLC.

Can I be my own registered agent for my North Carolina LLC?

Yes, you can be your own registered agent for your North Carolina LLC if you have a physical office address in the state.

How long does it take to get my North Carolina LLC formation paperwork approved?

It takes approximately 5-7 business days to get your North Carolina LLC formation paperwork approved.

Can I reserve a name for my North Carolina LLC before I officially form the business?

Yes, you can reserve a name for your North Carolina LLC by filing a name reservation application with the Secretary of State.

How do I get an EIN for my North Carolina LLC?

You can get an EIN, or Employer Identification Number, for your North Carolina LLC by applying for one on the IRS website.

What are the annual obligations for North Carolina LLCs?

North Carolina LLCs have annual obligations to file an annual report with the Secretary of State and pay an annual renewal fee of $200.

Are there any residency requirements to form an LLC in North Carolina?

No, there are no residency requirements to form an LLC in North Carolina.

Do I need a business license for my North Carolina LLC?

The state of North Carolina does not require a general business license, but certain professions may have specific licensing requirements.

What protections do LLCs offer in North Carolina?

LLCs offer liability protection for their owners, which means that their personal assets are generally protected from business debts and legal judgments.

How do I dissolve my North Carolina LLC?

To dissolve your North Carolina LLC, you need to file articles of dissolution with the Secretary of State.

What is a foreign LLC, and how do I register one in North Carolina?

A foreign LLC is an LLC that was formed in another state. To register a foreign LLC in North Carolina, you need to file a foreign registration form with the Secretary of State.

What are some advantages of forming a North Carolina LLC?

The advantages of forming a North Carolina LLC include liability protection, tax flexibility, and ease of management.

Can I change the name of my North Carolina LLC after it has been formed?

Yes, you can change the name of your North Carolina LLC by filing an amended articles of organization with the Secretary of State.

Can my North Carolina LLC own property?

Yes, your North Carolina LLC can own property, including real estate and other assets.

How can I find a good registered agent for my North Carolina LLC?

You can find a good registered agent for your North Carolina LLC by searching online or using a professional service provider.

How does North Carolina treat LLC taxation?

North Carolina uses a pass-through tax approach for LLCs, meaning that the profits and losses of the LLC pass through to the owners’ personal tax returns.

Can I have a single-member North Carolina LLC?

Yes, you can have a single-member North Carolina LLC, in which you are the only owner of the business.

Do I need to keep record books for my North Carolina LLC?

Yes, you need to keep record books for your North Carolina LLC, which should include member meeting minutes, bylaws, and financial records.

How do I change the registered agent for my North Carolina LLC?

You can change the registered agent for your North Carolina LLC by filing a statement of change of registered agent with the Secretary of State.

What is the process for amending the articles of organization for my North Carolina LLC?

To amend the articles of organization for your North Carolina LLC, you need to file an amended articles of organization form with the Secretary of State.

How do I know if my North Carolina LLC name has been approved?

You will receive a certified copy of your filed articles of organization from the Secretary of State, which will include your LLC name and whether it was approved.

Do I need a separate bank account for my North Carolina LLC?

Yes, you should have a separate bank account for your North Carolina LLC to help keep your personal and business finances separate.

What is the difference between an LLC and a corporation in North Carolina?

LLCs have more flexibility in terms of management and are less formal than corporations. They also offer greater liability protection for their owners.

How Fast Can I Form an LLC in North Carolina

When it comes to forming an LLC in North Carolina, efficiency is key. The process can be completed online through the North Carolina Secretary of State’s website, which makes it quick and convenient for business owners. By simply filling out the necessary forms, paying the required fees, and providing the essential information about your business, you can have your LLC up and running in no time.

One of the first steps in forming an LLC in North Carolina is choosing a business name. It’s important to select a unique name that is not already in use by another registered business in the state. Once you have chosen a name, you can reserve it for a small fee through the Secretary of State’s website to ensure that it is available for your use.

After choosing a name, you will need to file Articles of Organization with the Secretary of State. This document outlines the basic information about your LLC, such as its name, address, and members. The filing fee for Articles of Organization is relatively affordable and can be submitted online for faster processing.

Once your Articles of Organization have been approved, you will need to create an Operating Agreement for your LLC. While this document is not required by the state of North Carolina, it is highly recommended to have one in place to outline the ownership structure and management of your LLC. Having an Operating Agreement can help avoid disputes among members and provide clarity on important business decisions.

In addition to filing the necessary paperwork, you will need to obtain any required licenses or permits for your specific business activities. Depending on the nature of your business, you may need to obtain professional licenses, zoning permits, or sales tax licenses. Checking with the North Carolina Department of Revenue or other relevant agencies will ensure your business is in compliance with all regulations.

Overall, forming an LLC in North Carolina can be a relatively quick and straightforward process. By following the proper steps and filling out the necessary paperwork, you can have your LLC up and running in no time. Taking the time to properly establish your business structure now can save you headaches and potential legal issues down the road. So don’t let the fear of a lengthy and complex process hold you back – forming an LLC in North Carolina is faster and easier than you might think.

Conclusion

In conclusion, starting an LLC in North Carolina is a strategic choice for entrepreneurs seeking a flexible, straightforward business structure with limited liability protection. By following the essential steps, including choosing a business name, filing Articles of Organization, appointing a Registered Agent, creating an Operating Agreement, obtaining an EIN, and securing the necessary licenses and permits, you can successfully establish your LLC. This business structure offers numerous advantages, such as pass-through taxation and ownership flexibility, making it an attractive option for small business owners looking to grow and protect their ventures. As always, consult legal and business professionals for guidance specific to your situation and state requirements.

How to Start an LLC in North Carolina | 2024 Guide