How to Start an LLC in North Carolina: If you’re interested in setting up an LLC in NC, you’ve come to the right place. Having an LLC not only protects your personal assets but also is less complicated than other business structures. North Carolina laws make it easy to establish your LLC in North Carolina. On this page, You’ll find all the steps that must be taken to ensure that your North Carolina LLC has been correctly established. We recommend you read the whole article very carefully word by word, don’t miss anything 🙂
On this page, you’ll learn about the following:
- How to Start an LLC in North Carolina
- After Starting Your North Carolina LLC
- North Carolina Foreign LLC
- North Carolina LLC Formation Review
How to Start an LLC in North Carolina
An LLC or a Limited Liability Company is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection.
If you wish to start an LLC in North Carolina, mainly you have to file your Certificate of Formation with the State and pay a filing fee of $125. There are some more steps to follow to get your LLC established in North Carolina. The following steps explain everything you need to create your LLC in North Carolina in 2022. Let’s get started!
Step 1: Decide a Name for Your North Carolina LLC
The very first step while forming an LLC in North Carolina is to give a proper name to your LLC. Before you name your business, you must know that the name should be easy to remember, available in the state, and follows all the LLC naming guidelines.
North Carolina LLC Naming Guidelines
There are a few specific requirements all the LLCs in North Carolina have to follow while naming their Company. Some of the most important requirements are as follows:
- Your business name should be available and no other existing business in North Carolina can have the same name. Perform a name search from the below-mentioned source to be sure your name isn’t taken already.
- “Limited Liability Company”, “LLC”, and “L.L.C.” – any one of these has to be used as a suffix in your business name.
- You cannot use any name for your business that is confusing or misleading. Terms such as “Treasury”, “State Department”, “FBI”, “CIA”, etc. shouldn’t be included.
- Terms like “Bank“, “University“, “Attorney“, “Doctor“, etc can be added only after the additional requirements by North Carolina State Government are fulfilled.
- (Optional) It’s better to name your business something for which your desired domain is available.
|Important Links –||Submit Offline Form to –|
|North Carolina Business Entity Search – Online Name Search|
Name Reservation Form – PDF
Name Availability Standards – Guidelines
North Carolina LLC Name Search – Instructions
|Business Registration Division|
PO Box 29622,
Raleigh, NC 27626-0622
Reserve Business Name for Future
If you do not wish to file your LLC right now but want to hold the name you have decided then you can reserve your LLC name for 120 days. To keep the name, you have to file a name reservation application and pay $30 to reserve your name with the North Carolina Secretary of State.
Doing Business As (DBA) or Trade Name
Once you have a legal name for your LLC, you can register it. However, it is not mandatory. You can, instead, use DBA, Fictitious Name, or Trade Name. In that case, you must register your name with the North Carolina Secretary of State by submitting an Application to Register a Trade Name in North Carolina along with the filing fee of $26.
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Tailor Brands offer DIY website templates and incredible logo designs. If you plan to get a website then it is wise to have a “.com” domain for your business but these days you can also use other TLDs like “.company”, “.xyz” etc. With Tailor Brands, you can get everything you need at an affordable price.
It is not legally mandatory to use the word LLC in your domain name or email. If you want you can use it. However, it is recommended not to use LLC in the domain name. A domain name should be short and easy to remember.
Step 2: Assign a Registered Agent in North Carolina
The second step to forming a North Carolina LLC is to appoint a Registered Agent. A registered agent is a person or business entity that will act or work on your LLC’s behalf. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in North Carolina. Hence, hiring a competent North Carolina Registered Agent for your LLC is necessary.
Make sure your registered agent is a resident of North Carolina or has a physical street address. Their business address or the principal address should be in North Carolina. Most LLC formation companies also provide registered agent services. Below are two great LLC setup services, even if you buy their cheapest plan (normally $49/year) you also get registered agent service and other services at a reasonable price.
These LLC formation services are recommended registered agent services as they are authorized to conduct business in North Carolina. Some LLC formation services offer standalone North Carolina registered agent services. You can purchase only Registered Agent services from them without purchasing any other LLC formation services.
A person who is above 18 years of age and has a physical address in the state of North Carolina can be a Registered Agent. A Registered Agent can be an independent person or can be a business entity. One who is responsible for handling all the legal documents.
Yes, you can be your own registered agent if you are a resident of the state of North Carolina and you are above 18 years of age. To become a registered agent you must have the authority to conduct any type of business in North Carolina.
Registered Agent Consent Application
In North Carolina, there is no separate Consent Letter to be produced to the Secretary of State. At the time of change of Registered Agent (or the name or address), the new Registered Agent has to sign the consent letter. It comes with the Application form to Change the Registered Agent. The filing fee of $5 should be paid for it. For more information on the same, read our guide on North Carolina Registered Agent.
Step 3: File Articles of Organization in North Carolina
The third and most important step in forming a North Carolina LLC is to file the Certificate of Formation. This North Carolina Articles of Organization is a legal document needed to officially register your business with the Secretary of State. It costs $125 to file your formation certificate in North Carolina. (Read more on LLC cost in North Carolina).
The Certificate of Formation includes details like the name of the LLC, registered agent’s name, address, employees’ details, and structure of the company (member-managed or manager-managed). Before hiring employees in North Carolina LLC, one should know about the rules and regulations thoroughly. Also if you are expanding your existing business (an LLC) to North Carolina then you need to register as a North Carolina Foreign LLC.
How to File Online
Go to the Secretary of State Online Service. You will get the online service page. If you are already registered then click on the “log in to Subscribe Account” option and log in with your credentials. If you’re not registered, then you can directly start filing your LLC by clicking on the “Online Filing” button below. Read more about the North Carolina Certificate of Formation for online registration.
How to File by Mail
If you prefer filing real-life forms for your North Carolina LLC registration, then you can download Domestic LLC Formation Form. Read the form thoroughly, fill it out, and mail it to the following address,
The Secretary of State
Business Registration Division
P.O. Box 29622
Raleigh, NC 27626
Processing Time: It takes 14 business days to get an LLC in NC if you file it online or via mail. By paying an additional fee, it can be expedited.
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Tailor Brands – ($49 + State Fees) Online LLC Setup
Step 4: Create Your North Carolina LLC Operating Agreement
Moving on to the fourth step, filing your operating agreement. An operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC. This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
When it comes to filing a North Carolina LLC Operating Agreement, the state does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all the details of your business operation. Like North Carolina, there are other states that do not have a mandatory rule to file operating agreements. But, this document would be useful if you decide to dissolve North Carolina LLC later. Hence, having an operating agreement may not be necessary but it is definitely ideal.
Recommended: You can get operating agreement templates at only $29 with TailorBrands. You don’t need to worry about drafting it as they will take care of it on your behalf. We recommend using –
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Step 5: Filing a North Carolina LLC EIN
The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify the type of business for tax purposes and taxes in general. The EIN is necessary for any active business or any form of business for that matter.
EIN is needed when the LLC hires employees. Hiring employees in Nortn Carolina LLC requires following specific rules and regulations. On the other side, EIN for North Carolina foreign LLC should be obtained if your LLC is based in other states.
To obtain EIN (aka FEIN) one has to fill up a form (Online or by mail) and submit it to the IRS. Enter details of your LLC, and finally complete the form and send it to the address given. You can also get an EIN Assistant who can help you with the process.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
Recommended: This hassle will be reduced when you hire an LLC formation service. They take care of obtaining EIN and all other things for your LLC. We recommend using –
Tailor Brands – ($49 + State Fees) Online LLC Setup
Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
Congratulation, you are now done with all the necessary steps to form your North Carolina LLC. If you do it yourself it should take you a long time to properly understand and do all the steps.
However, if you use TailorBrands it should take fewer hours and you always have live chat with expert support for any help you need.
After Starting Your North Carolina LLC
After forming your LLC, there are still some things that you will need. Take note of the following:
- Get a company business bank account
- File North Carolina business permits & licenses
- Get general liability insurance and professional liability insurance with coverage for employees
- File a North Carolina LLC annual report or biennial report
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.
Cost of North Carolina LLC
Forming an LLC in North Carolina is no doubt more cost-effective than other structures of a business. There are some fees and charges one has to bear to form a North Carolina LLC. LLCs have pass-through taxation. Hence, your North Carolina LLC won’t bring you a massive tax burden. Here are some of the fees and taxes are needed to be paid while forming an LLC in North Carolina,
|Fees/Tax||Amount to be Paid|
|Name Reservation Fee||$30|
|DBA Filing Fee||$26|
|Articles of Organization Fee||$125|
|LLC Annual Fee||$200|
In North Carolina, an LLC name reservation is not mandatory. You can register your LLC name at the time of registering your LLC. If you wish to hold the name for some time without registering your LLC, then you can do that online. Your LLC name will be reserved for 120 days without registering your LLC. It can be done by paying $30.
In North Carolina, an Annual Report has to be produced every year. It costs $200. Also, the State of North Carolina requires to pay 4.75% of the Sales Tax. Read our guide on LLC costs in North Carolina for more information.
North Carolina Foreign LLC
If you are interested in forming a Foreign LLC in North Carolina then you need to file the Certificate of Foreign LLC to the North Carolina Secretary of State. Foreign LLCs allow you to operate your business in more than one state. Along with the Certificate of Foreign LLC, you need to submit some more documents like the Certificate of Good Standing, etc. to the North Carolina SOS to form your foreign LLC in North Carolina. To know more in detail, check out our guide on North Carolina Foreign LLC.
Reasons to Start an LLC in North Carolina
In terms of GDP, North Carolina is considered the 9th wealthiest state in the USA, and the reason it has grabbed this position is the benefits designed by the state. When a new LLC thinks of incorporating in North Carolina, they have bundles of advantages including fewer tax liabilities that they can redeem amid their registration and set-up in the state. Read more on North Carolina’s classification of LLC tax. Some of the benefits perceived are discussed below.
Infrastructure financing program
As an entrepreneur, take the step to start an LLC in North Carolina, then from the same time, they start receiving the bundled benefits along with that. The first one is the financing programs. In North Carolina, it is only expected from a business personality to have a unique, mind-blowing idea. Based on that, one can arrange the finances very easily.
From the construction of a building to the generation of jobs, the state government is ready to help the LLC in North Carolina in every way possible. There are small Microenterprise loans to large-sized Job Development Investment Grants are available in the state.
The Opportunity Zones of North Carolina
There are many opportunity zones in the state of North Carolina. These zones are the places of the state with a tract of low income compared to the whole state. A total of 252 tracts are decided by the North Carolina government in which the LLC needs to be situated if they want to enjoy the opportunity zone benefit. Such companies will have several benefits in which; the first one is taxation deferment for a temporary basis.
Government asks the business to invest the money to expand more in the opportunity zone and create more jobs for people there. The next benefit is on the long-term capital gains of the company on which the government is providing them a permanent tax deferment.
Sales and Use Tax Redemption
If a startup business is making heavy machinery, equipment, machinery that are to be used in mills and its accessories, they are exempted from the sales and use tax. Moreover, there are some special exemptions for those businesses using piped natural gases in their facility.
Green Business Funds
This program is specially designed for North Carolina LLC, which is working to develop a green energy source. Under this, several benefits are provided to a business, and also the federal taxes they have to pay are exempted to some levels.
Top Businesses Operating in North Carolina
Are you a new-age entrepreneur and want to form a North Carolina LLC? Then it would be best for you to gain complete knowledge about industries operating in the state. Here is the list of best businesses operating in North Carolina from time immemorial and their contribution to the industry.
Agriculture Based Businesses
North Carolina is known for producing high-quality tobacco for many years, making it the number one producer in the country. Along with that, there is a diverse production of sweet potatoes and poultry also. The farm production and its contribution to the state’s GDP are high, and it is generating around $15 billion annually, which accounts for 16% of the total GDP. Supporting crops of the region are hay, barley, sweet corn, and some vegetables.
Tourism of North Carolina
North Carolina is the sixth-largest tourism industry in the USA and is attracting millions of people every year. Whether the country is suffering from a recession or economic crisis, the state’s tourism has always shown colossal development. With a total generation of $20.2 billion income every year, the tourism sector gives jobs to 8.7% of people residing in the state.
The state is witnessing a vast huge production of tobacco which is used in the industry also. The state is known to produce a massive range of cigarettes and chewing tobacco. Along with that, there is a tremendous demand for chemicals and cleaning products produced in the state, due to which the industry is ranking at number 5 in the country. Approximately 20% of state GDP is contributed by this sector and is employing approximately 460,000 people. The interesting fact about the manufacturing sector of North Carolina is most of the industries are small-scale here.
Some of the small businesses north Carolina is catering well are:-
- Pepper sauce production
- Real estate investment
- Roof accessing device
North Carolina LLC Formation Review
Time needed: 5 minutes.
Just to recap, here are the easy steps again when forming an LLC in NC. Click on the steps in this list to read the full detail.
- Name your North Carolina LLC
The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
- Choose a Registered Agent
In North Carolina, it is mandatory to select a registered agent for your LLC. Get a professional Registered Agent from LLC formation services like NorthWest Registered Agent to get things done hassle-free.
- File a Formation Certificate
Filing a formation certificate is necessary when forming an LLC in North Carolina. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create an Operating Agreement
An operating agreement is not a strict requirement in North Carolina but something encouraged when you start an LLC to avoid future conflicts.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
How Fast Can I Form an LLC in North Carolina
There are many reasons to form an LLC in North Carolina. Depending on your goals, you can form a new LLC in as little as two weeks. In North Carolina, this process is known as “limited liability company” or LLC formation. If you’re just starting out, this process can take more time, but is well worth the effort. Here are a few things you should know before forming an LLC.
Filing articles of organization and operating agreement for your new business can take up to a day. However, if you’re starting your business at the end of the calendar year, delaying your formation date may not be the best option. This is because many businesses don’t start up until the beginning of the year. While most LLCs take four to six weeks, rush processing can reduce the time to just two to three business days. These services use overnight delivery services to send you your documents. You’ll also pay additional fees if you choose to use rush processing.
Once you’ve completed the documents and approved the name, you must file the Articles of Organization with the Secretary of State. While you can file for your LLC in North Carolina in person or by mail, the state will process the documents and provide you with the approval letter within three to four weeks. Make sure you get an approved name and choose a registered agent. You’ll need to provide this information to the state when you file your taxes, and you’ll need this if you plan on opening a business checking account.
While you can form an LLC in North Carolina, you need to remember to keep records of all your business’s financial transactions. An LLC should keep detailed financial records and avoid mixing personal and business information. You may need to borrow money in the future, and if you’re not careful, you could end up in a position where your personal information is in the hands of someone else. Keeping your business separate from your personal finances will protect your assets and make your accounting easier.
Another consideration is your operating agreement. Your operating agreement is an important document that will help your business secure funding in the future. If you hire employees, you’ll need to maintain workers’ compensation insurance and commercial vehicle insurance. You might want to obtain a general business liability policy as well. You should also open a business bank account so you can purchase products and services for your business. Remember to never use a personal bank account when operating an LLC.
You’ll also need to draft an operating agreement with all of your members. This document will lay out what the members of your LLC will be responsible for, and how they will split profits. You can use generic state rules to form your LLC, but they may end up being detrimental to your business if it gets sued. Furthermore, they may not fully outline their roles, which could lead to disputes and costly litigation in the future.
If you are a resident of North Carolina, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $125 (domestic LLC) and $250 (foreign LLC), LLC costs in North Carolina include $200 for Annual Reports every year. LLCs are liable to pay sales tax of 4.75% every year.
It takes 14 business days to get an LLC in NC if you file it online or via mail. If you hire a professional LLC service, then it might take less than that. We recommend Tailor Brands which has impeccable turnaround time.
Every year all the LLCs have to submit an Annual Report and pay $200 to the North Carolina Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for the LLCs, it is a default tax structure. Once you will obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens. Read more on the North Carolina Classification of LLC Tax.
LLCs are easier to establish than other business structures. Small businesses, especially start-ups can easily start an LLC in North Carolina at a bare minimum cost. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. The formation of limited liability companies requires much lesser documents and legal processes. Share your queries with us, and leave a comment below.