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. On this page, You’ll find all the steps that must be taken to ensure that your Limited Liability Company in North Carolina 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, you mainly 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 2022. Let’s get started! It is always recommended to hire a professional LLC formation service in North Carolina to set up your LLC.
Step 1: Decide a Name for Your North Carolina LLC
The very first step while forming an LLC 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.
LLC Naming Guidelines in North Carolina
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.
Recommended: You can do name search, get company logo, business domain, website, emails, and a lot more in one place by hiring a professional service. We recommend using –
TailorBrands – ($49 + State Fees) Online LLC Setup
TailorBrands 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 TailorBrands, 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 an LLC in the state of North Carolina 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 for service of process 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 an 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 Articles of Organization for online registration.
How to File by Mail
If you prefer filing real-life forms for your 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.
Recommended: Online LLC Formation service can provide all these documents within 6-8 days with lifetime customer support and 100% accuracy. We recommend using –
TailorBrands – ($49 + State Fees) Online LLC Setup
Step 4: Create Your LLC Operating Agreement in North Carolina
Moving on to the fourth step, filing your operating agreement. An operating agreement is an internal 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 –
TailorBrands – ($49 + State Fees) Online LLC Setup
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 –
TailorBrands – ($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 LLC in the state of North Carolina. 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 a 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. Along with business credit card, business accounting software and other business accounting tools are required.
- File North Carolina business permits & licenses. Depending on the nature of the LLC, business licenses and permits are needed. For example, signage permit, building permit, health permit, etc. Business licenses help conduct business with ease.
- Get general liability insurance and professional liability insurance with coverage for employees. Just like professional liability insurance, there are other types of business insurance available. You can explore business insurance companies to get the best business insurance provider for your LLC.
- File a North Carolina LLC annual report or biennial report
This page has provided you with broad 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 Starting an LLC in the State of North Carolina
Forming an LLC in NC is no doubt more cost-effective than other structures of a business. There are some fees and charges one has to bear to form an LLC in the state of North Carolina. LLCs have pass-through taxation. Hence, your 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 the state of 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 the state of 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 the state of 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.
When it comes to an LLC, it gives limited liability protection, which brings lower risk to the owner. In NC, women entrepreneurs get special provisions. Any woman-owned business gets easy business loans and advances. They also get business incentives while conducting business in the state. Business costs in NC are much lower than in other neighboring states. Some of the benefits perceived are discussed below.
Infrastructure financing program
As an entrepreneur, take the step to start an LLC in the state of 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 the state of 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, or machinery that is 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 LLCs in the state of North Carolina, 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 an LLC? Then it would be best for you to gain complete knowledge about industries operating in the state. Here is the list of the 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 a Limited Liability Company 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.
Things to Consider While Starting an LLC in the State of North Carolina
In this article, almost all the essential steps to forming an LLC are mentioned. However, there are some points that one has to consider before starting an LLC. First, while choosing the LLC name, make sure you follow all the guidelines. There are a series of business name options available. However, it is important to choose a name that is available and also suits your LLC. You can check the business name database to find whether your desired name is used by others or not. If you hire a formation service provider, then they can provide business name reservation service included in their business kit.
The next thing to consider is after you form your LLC, make sure to get all types of business accounts that, including business accounting tools and business tax accounts. Business taxes are less in LLC, yet, there are some taxes that one has to pay. Single-member LLCs are taxed like sole proprietorships. Multi-member LLCs are taxed like corporations. However, there is no double taxation in LLCs.
Another important factor is a good business plan. It is a basic yet most important thing to be done. If you have a proper business plan, it will be easy to face any business challenges. In your business plan, business expenses, business funding, business law, details of business licenses needed, and other things should be mentioned.
In NC, even if you have an informal business structure, you have several options for lines of credit. But, you must check your business credit score to be sure that you are up-to-date with your credits. There might be fees for delayed filing, especially government filings, filing personal tax returns, amendment filings, or any other tax filing. Any critical filing shouldn’t be delayed.
Finally, for any first-time entrepreneur, it is mandatory to check up on licensing requirements, annual report requirements, business trends, and proper business law in NC. Depending on business trends, you can anticipate your business errors.
How Fast Can I Form an LLC in North Carolina
Filing for LLC in North Carolina may take up to 2 weeks. However, this process can be expedited by paying an additional amount to the state.
The first step to forming an LLC in North Carolina is obtaining a Certificate of Authority. This is a document that identifies the owners and other details of the business. It can also specify details about the capital contributions, expenses, and profit sharing. Filing the paperwork can be time-consuming, but you don’t need an attorney to do it. You can use an LLC creation service to get the paperwork done for you.
You can file the documents online or by mail. In North Carolina, you must file an annual report with the Secretary of State. The report will include the name of your LLC, its principal business address, the name of your registered agent, and the names of your LLC’s members and managers. Typically, the state’s Secretary of State will process your filing within 3-5 business days. Paper filings will take longer, but you can request same-day and 24-hour expedited service for an additional fee.
In North Carolina, you must also choose a registered agent to keep all business documents in order. The registered agent serves as the LLC’s liaison to the state and will take care of important tax and legal documents to keep the business in good standing. The registered agent can be an individual resident of the state or a business entity authorized to conduct business in North Carolina. The registered agent’s contact information will be on the company’s public record.
Once you have formed your LLC, you will need to open a bank account for the business. Having a separate bank account for the business is critical for keeping your personal and business assets separate. Otherwise, it may open you up to liability lawsuits. You should also consider hiring an accountant to help you with the accounting.
It is important to choose a good name for your new LLC. It should be one that you can remember and is not already in use by another business in the state. You can use a name search website to check for similar names. In addition, it is important to select a suffix such as “Limited Liability Company,” “LLC” or L.L.C.
There are several services that can help you form your LLC in North Carolina. Some companies offer free service while others require you to pay a small fee. You can also form an LLC online with a free service. One such service is IncFile. This company will also provide you with a year’s registered agent service. The service has a great reputation with its customers. They have more than 27,000 positive reviews online.
Before you start filling out the paperwork, you’ll need to choose the name for your LLC. The name needs to be unique within North Carolina and follow the naming guidelines of the state. Otherwise, your paperwork could be rejected. Therefore, it’s recommended to brainstorm and make a short list of your preferred names.
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 TailorBrands, which has an 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 LLCs, it is a default tax structure. Once you 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 the state of 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.