If you're looking to open a Limited Liability Company (LLC) in NC, LegalZoom has the information you need. North Carolina's robust economy continues to see growth in popular industries like tech, healthcare, and manufacturing, offering a favorable climate for new businesses.
LLCs in North Carolina are affordable and easy to form. This business structure protects your personal assets and offers flexible tax, management, and operational structures. However, as with other states, North Carolina has some unique LLC requirements. First, you must register with the Secretary of State by filing the necessary forms, paying the necessary fees, and meeting all naming and formation requirements.
How to get an LLC in North Carolina in 6 steps
Before you begin the business registration process for an LLC in North Carolina, it's important to know the requirements you'll have to meet. The final official step for registering an LLC in North Carolina involves filing articles of organization, but before you get there, NC requires you to choose a distinct business name and registered agent. Once you've filed the articles, there are a few other steps to take in the early days to ensure your business stays compliant.
1. Decide on a business name
LLC naming requirements can be confusing. The easiest way to ensure that your LLC name will be approved is to make it distinguishable from other LLCs. Check if your desired business name is unique by conducting a North Carolina business entity search before filing your LLC formation documents to make sure no other businesses have a similar name.
There are a few major requirements for naming an LLC in NC:
- All names of limited liability companies must include "limited liability company" or an acceptable abbreviation of the term, such as "L.L.C." or "LLC."
- All LLC business names must be distinct from all other business names in the state.
- Businesses can't use the following words without approval from a state licensing board or state agency: bank, banker, banking, mutual, trust, or realtor.
- No business can use the following terms in their name unless they are qualified to perform the associated work:
- Architect, architecture, or architectural
- Certified public accountant or CPA
- Cooperative or co-op
- Engineer or engineering
- Insurance
- Pharmacy, prescription, drug, Rx or apothecary
- Surveyor, survey or surveying
- Wholesale
If you're struggling to come up with a distinct business name, use a business name generator for inspiration.
Once you have a name that you love, you can file an application to reserve a business entity name while you gather everything you need to officially register. The form only costs $30 to file and allows you to reserve the name for up to 120 days. This step isn't mandatory, but it's helpful if you think another company could take your desired business name.
File online or by mail to the Secretary of State's office at the following address:
Business Registration Division
P.O. Box 29622
Raleigh, NC
27626-0622
2. Assign an agent for service of process
Before you can officially file your articles of organization and register your business, you need to designate an agent for service of process, also called a registered agent. A registered agent is an individual or company whom you appoint to manage legal documents and government correspondence on behalf of your LLC.
NC outlines the following requirements for a registered agent:
- The registered agent must be a North Carolina resident or be a business entity authorized to transact business or conduct affairs in North Carolina.
- The registered agent must have a business office that's a physical address in North Carolina where they can receive legal documents on behalf of your LLC.
- The registered agent must be available during normal business hours to receive communications.
While the business owner or an employee may act as your LLC's registered agent, hiring an outside service can save you time and effort. The registered agent's responsibility is to handle sensitive legal documents in a timely manner and according to deadlines, so hiring an expert may also help ensure compliance.
Registered agent fees vary.
3. File articles of organization
LLC registrants are required to complete and submit North Carolina articles of organization with the Secretary of State (SOS). You will pay a $125 filing fee upon submission of the documents. The articles must include the following information:
- LLC name and principal office address
- Names, addresses and signatures of members/organizers (State whether each person is a member, organizer or both)
- Name and address of registered agent
- Business email (optional)
- List of Company Officials (optional)
- Effective date, if not the filing date
- Dated signature, name and title of applicant
File your articles of organization either online or by mail in the same way that you filed your business name reservation.
4. Create an operating agreement
While North Carolina law doesn't require your limited liability company to have an operating agreement, an LLC with more than one member is strongly advised to have an operating agreement among its members. An operating agreement outlines ownership structure, roles, and operational procedures for your business.
It can also inform courts on how to judge a legal dispute between members, should one arise. Without an agreement in place, courts will use state laws to judge your case, which may not be in the best interest of your LLC or its members. The cost of drafting an operating agreement also varies.
5. Get an employer identification number (EIN) and open a business bank account
The federal employer identification number (EIN) is a nine-digit social security number for businesses assigned by the Internal Revenue Service for tax purposes. You will need this number to register for state taxes, hire employees, open a business bank account, and more.
Opening a business bank account is important for LLCs to separate your business spending from your personal spending and protect your limited liability status. Business bank accounts also provide asset protection, reduce the risk of audits, and simplify bookkeeping.
You can obtain an EIN for your LLC by mail or online by applying through the IRS website.
6. Register for state taxes
You're almost done with state and federal regulations! The next step is to register your business with the North Carolina Department of Revenue. This is vital to start legally operating your new LLC. Depending on the nature of your business, you'll likely need to apply for specific taxes, such as sales and use, liquor, and motor vehicle tax.
To set up an account, LLCs need the following information:
- An EIN
- Business contact information (Name, telephone number, physical and mailing address)
- Employee wage information, if you plan to apply for withholding tax
The NC Department of Revenue website offers a lot of guidance to new businesses. Check out their website to see which business taxes apply to you and their relevant rates.
What to do after forming your North Carolina LLC
Once your LLC is officially registered and compliant, there are a few more steps that will support the success and maintain the compliance of your new business.
Apply for business licenses
You may need a specific license to operate your LLC, depending on its business activities. North Carolina has over 700 regulatory, state-issued, and occupational licenses and permits, not including local licenses. Luckily, you can use the NC Department of Commerce's Business & Occupational License Database to determine which ones you may need.
Register a domain name
Every LLC should have a website where potential customers can conveniently locate and learn about your business. For that reason, it's wise to check if the URL is available for your desired business name before officially registering with the SOS. It's best if your domain name matches your business name to make it easier for prospective clients to find your LLC online and to help build credibility.
Obtain a certificate of good standing
While this document isn't a legal requirement, ordering a certificate of good standing will help you prove your LLC's legal standing and registration to potential partners, investors, lenders, employees, and customers. You can order this certificate from the SOS by mail or online for a $15 filing fee.
Consider a foreign LLC
Registering an LLC with the Secretary of State only authorizes your business to operate in North Carolina. If your business is booming and you want to expand into another state, you'll need to register as a foreign LLC in the new state(s).
The cost of registering a foreign LLC will vary state to state. To register a foreign LLC in NC, file the Application of Certificate of Authority with the Secretary of State for a $250 filing fee.
Annual filing requirements for North Carolina LLCs
LLCs in North Carolina are required to file an annual report with the North Carolina Secretary of State to stay compliant with state law. This is done every year following the year of organization and is due on or before April 15. You can file online or by mail for a $200 filing fee.
In addition to an annual report, LLCs need to file state and federal taxes. Note that LLCs can choose to file either as a sole proprietorship or a corporation. This means that you can choose to report your gains and losses either on your individual tax report or separately as a business. Individual income tax is 4.75%, and business income tax is 2.50% in North Carolina.
The cost of forming an LLC in North Carolina
The total cost of starting an LLC in North Carolina will depend on the nature and scope of your business, and any optional services you may opt for. The minimum cost to form an LLC is $125 for the articles of organization. That said, it's helpful to look at a breakdown of other basic costs:
- Application to reserve a business entity name: $30
- Articles of organization filing: $125 for domestic LLCs, $250 for foreign entities
- Registered agent fees: $100 to $300/year
- Operating agreement: $100 to $750 on average
- Website domain: $10 to $45/year on average
- Certificate of good standing: $15
FAQs
Do I need a business license for my North Carolina LLC?
Whether or not you need a business license to operate an LLC in North Carolina depends on the nature of your business. Some businesses need multiple licenses, while others don't need any at all.
How long does it take to form an LLC?
Processing time is usually between three to five business days. For additional fees, expedited services can shorten the process to 24 hours or even the same day.
How do I correct filing errors in NC?
An NC LLC can correct filing errors through an amendment of articles of organization if your business is domestic or an application for an amended certificate of authority for foreign LLCs. In either case, the filing fee is $50.
How do I dissolve a North Carolina LLC?
Dissolve a North Carolina LLC by filing articles of dissolution with the NC Secretary of State for a $30 filing fee.
How do you do a North Carolina LLC search?
Conducting a North Carolina LLC Search is relatively straightforward and can be done directly through the North Carolina Secretary of State's website through their search engine or via a third-party NC business search guide.
Michael H. Cohen, Esq. contributed to this article.
