Are you thinking about how to start an LLC in NC? You’ve chosen the right place. North Carolina was ranked the best state for business in 2022. The state’s economy has grown greatly because of its focus on technology, science, and innovation. You can find a complete guide here to help you become a new business owner by learning about LLCs and how to apply online in NC.
Starting an LLC in North Carolina includes the following steps:
#1: Name Your North Carolina LLC
#2: Hire an NC Registered Agent
#3: Get Your EIN
#4: File Your Certificate of Organization
#5: Create Your Operating Agreement
#6: Pay Legal Obligations and File Annual Reports
Why Start a North Carolina LLC?
The state provides tax savings, various business grants and incentives for LLCs that meet specific requirements. For instance, new or expanding companies may be eligible for the Job Development Investment Grant, offering cash assistance to expand or establish business facilities in the state.
For many aspiring entrepreneurs, the quickest and most straightforward approach to starting a business is by forming a North Carolina limited liability company (LLC). This business entity type is well-suited for startups and small to medium-sized businesses, providing the benefits and protections of larger North Carolina corporations with simpler rules and regulations.
Learn more information about the benefits of the LLC business structure.
Advantages of Starting a North Carolina LLC
- Safeguard your personal assets from business liabilities and debts
- Simple to establish, oversee, maintain, and stay compliant
- Potential tax benefits and straightforward filing process
- An affordable filing fee of $125
NC LLC Specifications
When registering an LLC, it’s necessary to submit the Articles of Organization to the Secretary of State, including details such as the LLC name, principal office address, duration (if applicable), name and address of the organizer, registered agent details, type of management, business email, effective date (if different from the filing date), dated signature with the name and title of the applicant, and names, addresses, and signatures of members. Additionally, all submissions have the required filing fee.
Forms and Fees
LLC registrants must fulfill and file the Articles of Organization with the Secretary of State, alongside a $125 filing fee. Expedited services are available for an extra charge, with a same-day processing fee of $200 and a 24-hour processing fee of $100. Verifying the most recent fee requirements with the Secretary of State is essential.
Timeline
Typically, the processing time for LLC registration ranges from three to five business days. However, expedited services can expedite the process to 24 hours or even the same day for an additional fee.
Naming Requirements
Navigating LLC naming requirements can be complex. Ensuring that an LLC name is distinguishable from others and includes the specific words required for LLCs is crucial for approval. It’s advisable to check the availability of a preferred name before submitting LLC formation documents.
Formation Requirements
To establish an LLC, the registrant must initially file the Articles of Organization with the Secretary of State and the requisite filing fee of approximately $125. Furthermore, an LLC with multiple members is strongly advisable to have a limited liability operating agreement among its members.
Professional Service LLCs
LLCs offering specific professional services must communicate with the relevant North Carolina licensing boards as per state law requirements.
How to Start an NC LLC in 6 Steps
Before registering your LLC in North Carolina, ensure you understand what an LLC is and if it’s a good business structure for your company. Then follow these steps to register with the North Carolina Secretary of State:
1. Name Your North Carolina LLC
When choosing a name, keep in mind that it should include “limited liability company.” You can also use the abbreviations “LLC” or “L.L.C.,” and shorten “limited” to “Ltd.” and “company” to “Co.”
When naming your North Carolina LLC, selecting a unique and original name not used by any other state business is essential. Ensure you adhere to the naming rules outlined on the NC LLC business names page.
After choosing a business name, verify its availability in North Carolina by conducting a business name search using the tool provided on the NC Secretary of State website.
Reserve Your NC LLC Name
If you want to secure a name before submitting your LLC filing, you can pay a $30 fee and submit an Application to Reserve a Business Identity Name. This step reserves your chosen business name for up to 120 days.
Additional Consideration:
URL Availability: In today’s digital age, maintaining an online presence is crucial for visibility. Conducting a comprehensive online search for your anticipated business name in North Carolina is advisable. This includes securing a URL or website address to prevent others from using it. You can search for domain availability to find a .com domain that suits your business, and by paying a yearly fee for its use, you can also prevent potential competitors from acquiring it. This approach ensures a win-win situation for your business.
2. Hire an NC Registered Agent
A registered agent is responsible for receiving business correspondence and filing reports with the NC Secretary of State. It is a mandatory requirement for every LLC in North Carolina. You, another business manager, or a specialized registered agent service can fulfill this role. If the registered agent is an individual, they must have a physical address within the state and be available during business hours to receive crucial documents for the company. In North Carolina, you hire your registered agent when filing your Articles of Organization when officially establishing your business. The registered agent must be an NC resident who is at least 18 years of age.
If you operate from home or wish to maintain the privacy of your LLC’s business address, you may want to explore the option of using a virtual address for your LLC listing.
3. Get Your EIN
To identify your business to the IRS, you will require an EIN. This number is for tax filings, payroll submissions, employee payments, and opening a bank account. You can acquire an EIN directly from the IRS.
Obtaining a business EIN ensures complete separation of your LLC’s finances from its members. This separation is advantageous for tax and liability reasons, even for single-member LLCs. Additionally, an EIN is necessary for opening a business bank account and seeking insurance coverage.
4. File Your Certificate of Organization
Once you have compiled all the necessary information for your North Carolina LLC, you must submit a form to the NC Secretary of State to create your Articles of Organization. This filing formalizes the establishment of your LLC.
The following details are typically included in the form:
- Business name and address
- Information about the Registered Agent
- Business purpose
- Duration (perpetual or limited)
- Provisions for internal affairs regulation
- Names and addresses of managers or members at the time of filing
- Organizer’s name
You can submit the NC LLC Articles of Organization online with the Secretary of State, mail a form to the Office of the Secretary of State, or delegate the entire process to Bizee. The filing fee for an NC LLC is $125, with an additional $2 electronic transaction fee for online filings.
To file by mail, send your documentation to the following address:
NC Secretary of State Business Registration Division
P.O. Box 29622
Raleigh, NC 27626-0622
You only need to file the Articles of Organization once, but you need to file an annual report every subsequent year.
5. Create Your NC LLC Operating Agreements
Creating an NC LLC operating agreement is not mandatory when starting your North Carolina LLC, but it is highly advisable for a smooth business operation. This document outlines your LLC structure, including each member’s ownership percentage and the distribution of profits, losses, rights, responsibilities, and voting powers. Additionally, it specifies the course of action if a member decides to leave the LLC.
Another compelling reason to have an operating agreement is that default LLC laws govern without specific provisions in the agreement. For example, North Carolina’s Limited Liability Company Act states that, in a member-managed LLC, each member is a manager and has one vote, regardless of their capital contribution. Without an operating agreement, this rule would apply. Including these provisions in the operating agreement aligns members’ votes with their capital contributions.
While the LLC operating agreement does not need to be filed with the state, it holds legal validity and serves to minimize conflicts among members by outlining their respective duties. Additionally, it should indicate whether your North Carolina LLC is member-managed or manager-managed, with clear distinctions between the two types. If your LLC has multiple members, seeking guidance from a business law attorney can be beneficial in drafting an operating agreement that safeguards each member’s rights and prevents potential issues.
6. Pay Legal Obligations and File Annual Reports
LLCs operating in North Carolina must adhere to state regulations by submitting corporate income taxes to the Department of Revenue. Completing and submitting corporate income tax forms CD-405/CD-401S are necessary.
It is essential to be well-versed in the legal obligations that pertain to annual reports for LLCs in North Carolina. These reports must be filed with the Secretary of State annually, with a deadline of April 15 following the year of establishment. You can accomplish this by submitting online or through traditional mail. A filing fee of $200 is mandatory upon document submission, with an additional $18 electronic filing fee for online submissions.
LLC State Guides
FAQs About How To Start an LLC in North Carolina
How much does it cost to form an LLC in North Carolina?
The primary cost is the $125 fee for filing the Articles of Organization with the NC Secretary of State’s office. Additionally, there are other associated fees, such as a $10 fee for filing an Application for Reserved Name and a $5 fee for designating a registered agent. Following the formation of the LLC, there is an annual $200 fee for filing the necessary annual reports.
What is the typical approval timeline for an LLC application in North Carolina?
When applying for an LLC in North Carolina, the approval process typically takes 5-7 business days from when the Secretary of State receives the documents. There are options available for same-day filing for $200 (The office must receive documents by 12:00 p.m. ) and filing within 24 hours for $100.
Are an EIN and a tax ID the same?
An EIN, or employer identification number, is a specific type of tax ID created for businesses with employees. However, even if your LLC has no employees and you’re the only member, obtaining an EIN may be necessary for certain business activities, such as opening a bank account. It’s advisable to use an EIN for your LLC to protect your personal information, regardless of the complexity of your business.
Do I need to pay LLC taxes in North Carolina?
If you do business in North Carolina, you’ll likely need to pay business taxes, including employment and sales taxes. Also, members must pay personal income tax on the business earnings. The specific taxes your LLC pays to the state depend on the elected tax status, with the default being a pass-through entity where tax liability passes to the members.
Do I need a business license for my LLC in North Carolina?
Once you register your LLC with the state, you must apply for specific licenses or permits based on the type of business your LLC conducts. Over 700 types of licenses and permits are issued in North Carolina, and free resources are available to help determine the applicable requirements. Additionally, some LLC formation services offer business license reports for an extra fee, providing guidance on the necessary licenses and permits for your operation.
