Perhaps you are hoping to form an LLC in NC. People assume that starting an LLC is difficult and costly. However, it’s generally not difficult, and the cost would vary across states. We have all the info you need to know about the cost of forming an LLC, particularly the LLC cost in North Carolina.
On this page, you’ll learn about the following:
North Carolina LLC Cost of Filing
Here are the costs involved in forming an LLC in North Carolina.
Cost of Filing Formation Certificates
The North Carolina Certificate of Formation is responsible for the majority of the cost, which could also vary depending on whether you’re forming a domestic LLC or a foreign LLC. Still, you can file both at the North Carolina Secretary of State.
North Carolina Domestic LLC
- Online Filing costs $125.
- Annual Report filing costs $200
- Name Reservation fee costs $30
- By Mail: Fill out the application form, and send it to NC Secretary of State Business Registration, P.O. Box 29622, Raleigh, North Carolina 27626-0622. Costs $125.
North Carolina Foreign LLC
- Online Filing costs $250.
- Annual Report filing costs $200
- Name Reservation fee costs $20
- By Mail: Fill out the application form, and send it to NC Secretary of State Business Registration, P.O. Box 29622, Raleigh, North Carolina 27626-0622. Costs $250.
Note that filing online is ideal, not only because you need to go to the Secretary of State office, but also it would be faster. You won’t have to wait in a queue in doing so.
North Carolina LLC Formation Service or Registered Agent Fee
You need a registered agent to form an LLC in North Carolina, hence, added costs for service fees. Here are three of the best LLC services on our list that will provide you with registered agents to ease your worries.
Business Permits and Licenses
The business licenses depend on your business’s activity and location and are renewed yearly. As such, the cost will vary. Check the North Carolina Department of Revenue for regulatory boards or agencies requiring licensing.
Taxes payable to North Carolina Department of Revenue
An LLC in North Carolina has to pay several State as well as Federal Taxes at the stage of formation & during its operation. Read this article to know more about these taxes. The North Carolina State Department of Revenue charges several taxes on an LLC. The two main State Taxes are:
State Income Tax
An LLC owner has to pay state tax on any amount he draws via his LLC. The earnings are taxed through the personal tax return. The standard income tax rate in North Carolina is 5.25%. One can apply for all the standard allowances and deductions.
State Sales & Use Tax
Every LLC which is a service provider or is a seller of tangible goods is bound to the sales & use tax in North Carolina. The LLC has to collect taxes & then pay those to the North Carolina Department of Revenue. The Sales & Use Tax is different in different regions, counties, & cities.
The current state sales & use tax rate on LLC in North Carolina is 4.75%
Federal Self-Employment Tax
As the name suggests, Federal Self-Employment Tax is paid by all the LLC Business members or managers. This kind of tax applies to all the earnings a member withdraws from the business.
The Federal self-employment tax rate in North Carolina is 15.3 percent.
Federal Income Tax
The Federal Income Tax is calculated on the basis of the earnings, the income tax bracket your LLC falls, the deductions, & the manner/ mode of filing.
Federal Income Tax is levied on all the profits your LLC makes minus the deductions & allowances such as Healthcare or Retirement Plans.
Employee & Employer Taxes
If you have several employees who draw monthly salaries, there will be some added Employee-Employer taxes. These tax implications vary, depending on various factors, e.g., the amount, number of employees, etc.
Cost Comparison Between States
North Carolina is surrounded by many states, namely Virginia, South Carolina, Georgia, Tennessee, etc. Each of these states has a different rate of taxes levied on LLCs. Let us take a look at this comparative chart.
States | Filing Fee | Annual/Biennial Fee | Sales Tax |
North Carolina | $125 | $200 | 4.75% |
Virginia | $104 | $50 | 5.3% |
South Carolina | $110 | $10 | 6% |
Georgia | $100 | $25 | 4% |
Tennessee | $520 | $500 | 7% |
Based on the kind of industry you LLC operated in, your LLC will be liable to some other taxes & duties. For Example, if your LLC is in the sector of import & export, you have to pay the import-export duty.
You should consult with a professional to verify the tax rates or business costs of registering an LLC in North Carolina.
Other Costs
- North Carolina Name Reservation: $10 for online fillings or by mail
- Doing Business As (DBA): $26 for online filling or if filing by mail
- Certified Document Copies: $10 per document.
- Certified of Good Standing: $15
- Business Domain Name and Website: depend on your preference, but domain name could be as low as $2.99/yr at NameCheap, and web hosting is at least $30/mo at Kinsta.
- Online workspace: at least $4.20/mo for GSuite.
- Business Insurance: would vary depending on insurance type–whether general liability insurance or professional liability insurance–and coverage.
- Dissolution of North Carolina LLC: $30
F.A.Qs
It is possible to form an LLC without professional help, but forms still have associated costs, regardless of where your LLC is formed.
It is difficult to say whether forming an LLC is expensive. Nevertheless, the cost could be anywhere from $40 to $500. If you refuse to hire professionals, you’ll still have expenses like form fees to cover.
The need to separate personal money from business funds, thus necessitating the creation of a business bank account for your LLC.
How Much Does It Cost to Maintain an LLC in North Carolina
To maintain an LLC in North Carolina you will need to pay an annual fee of $200 along with state sales & use tax at 4.75%, state income tax at 5.25% and federal taxes.
The costs of maintaining an LLC in North Carolina can vary depending on several factors. One of the main costs that business owners should be aware of is the annual report fee. In North Carolina, all LLCs are required to file an annual report with the Secretary of State’s office and pay a fee. This fee helps ensure that the state has accurate information about the company and is crucial for maintaining good standing as a business entity.
Another ongoing cost for LLCs in North Carolina is the franchise tax. This tax is based on the net worth of the company and is due annually. While the specific amount of the franchise tax can vary depending on the financial situation of the business, it is important for business owners to budget for this expense.
In addition to annual fees, LLCs in North Carolina may also incur costs for obtaining any necessary licenses or permits. Depending on the nature of the business, there could be additional fees associated with maintaining compliance with local regulations. It is important for business owners to research the specific requirements for their industry and budget for any associated expenses.
Moreover, the costs of maintaining an LLC in North Carolina can also include legal and accounting fees. Business owners may choose to work with professionals to ensure that their company is operating in compliance with state laws and regulations. While these services can be an added cost, they can help business owners navigate the complexities of maintaining an LLC and avoid any potential legal issues.
Overall, while the costs of maintaining an LLC in North Carolina can add up, it is essential for business owners to view these expenses as an investment in the longevity and success of their company. By budgeting for these ongoing costs and ensuring compliance with state laws, business owners can protect their business and focus on growth and expansion.
In conclusion, it is crucial for entrepreneurs in North Carolina to understand the costs associated with maintaining an LLC in this region. By being aware of annual fees, franchise taxes, licensing requirements, and potential legal and accounting expenses, business owners can budget effectively and ensure the long-term success of their company.
In Conclusion
The cost of North Carolina is much lower compared to other forms of business. Apart from the state filing fees and annual taxes, you might bear the cost of the registered agent. Compare the price of professional LLC services and choose the most affordable one.