Start an LLC in North Carolina

If you plan to apply for LLC registration but are unsure how to start an LLC in North Carolina, this article answers this and other questions.

Aside from outlining the process of launching a new business in NC, this article covers the issue of LLC filings and costs as well as procedural aspects of running an NC LLC and its compliance requirements.

It’s perfectly possible to create your dream limited liability company in just 7 simple steps. If you do decide to create a North Carolina LLC, just make sure to follow all LLC requirements to avoid unnecessary difficulties early on.

Step 1: Name Your LLC in North Carolina

Finding an LLC name is one of the most crucial decisions you will make as a new entrepreneur. To set up an LLC in NC successfully, it’s best to pick a memorable name that reflects the nature of your business yet remains compliant.

North Carolina’s naming requirements are mostly identical to other states. As such, a North Carolina LLC business name must:

  • Avoid any association with government agencies;
  • Indicate business structure designation:
    • “Limited Liability Company,” 
    • “Limited Liability Co.,” 
    • “L.L.C.,” 
    • “LLC.
  • Omit state’s restricted words, specifically if they imply a connection to the industry that the company is not licensed in such as “bank”, “insurance,” etc;
  • Be a unique LLC name that does not match fully or partially to another name already registered with the North Carolina Secretary of State.

Determine the Name is Available

A preliminary Secretary of State’s Business Search is not a technicality. Cross-referencing your naming options beforehand is a good way to avoid potential fines in the future.

If the name availability search pulls up no matches, your chosen name is a go. But if the state already lists an existing LLC business with that name, don’t rush to file your Articles of Organization. All documents should be submitted only after you’ve come up with a distinguishable name for an NC LLC.

Name Reservation (Optional)

Deciding on a name doesn’t necessarily mean you’re ready to launch a new business in North Carolina right this second. And if you’re worried about losing the name in the meantime, an easy solution to avoid this is name reservation.

If you wish to reserve an LLC name in North Carolina, you have to submit the Application to Reserve a Business Name. The filing fee is $30. The reservation validity period is 120 days.

Processing times depend on the application method. Filing a name reservation can be done online, by mail, or in person.

Online filing:

Download the form and fill it out. Online submissions are reviewed within 3-5 business days, but it’s possible to get expedited options for an extra fee.

By Mail:

Download and complete the form, then print it out, and send it to:

Corporations Division
PO Box 29622
Raleigh, NC 27626-0622

In Person:

Raleigh residents or visitors have the option to submit the form in person at:

2 South Salisbury Street Raleigh, 
NC  27601

Reservation is not mandatory and can be omitted unless you’re worried about long-term name availability or if you don’t plan to operate in North Carolina immediately.

Step 2: Choose a Registered Agent for Your North Carolina LLC

One of the key steps of getting an LLC in North Carolina is assigning an agent for service of process, also referred to as a registered agent, who is responsible for handling the company’s state and legal communications, taxes, lawsuits, maintenance requirements, and other official government correspondence.

A registered agent must be present at a registered office during standard business hours to receive correspondence, especially if your physical office is located in another state. This way, the registered agent makes the business available for the local government.

Having a registered agent is mandatory if you want to conduct business in NC. In case of agent replacement or resignation after you’ve done setting up an LLC in North Carolina, the owner should immediately amend the information on LLC’s public record.

Almost any individual or legal entity can perform the duties of a registered agent for a North Carolina LLC.

Individual as Registered Agent

A natural person can act as an individual registered agent as long as they:

  • Are a North Carolina resident over 18 years of age;
  • Have a physical state address;
  • Are able to be present at the workplace at all business hours.

The state’s registered agent requirements aren’t particularly strict. To register an LLC in NC, the owner can entrust registered agent duties to:

  • Oneself;
  • Business partners;
  • Accountant;
  • Attorney;
  • Family members etc.

Registered Agent Service

Hiring an LLC formation service is another excellent option for following business formation requirements. It’s also a reliable provider of an NC LLC registered agent service for anyone who plans to do business in North Carolina.

A number of companies like Northwest Registered Agent even give a year of free registered agent regardless of the service package.

Remember that any attempt to conduct business without a registered agent leads to monetary fines and even LLC administrative dissolution.

Step 3: File the Formation Documents with the State

Once you’ve designated a registered agent, it’s time to begin the main stage of the LLC formation process. If you’re wondering how to get an LLC in NC without excess filings, the state has some bad news for you.

The procedure is nevertheless fairly simple. To commence business in North Carolina, the owner must file their LLC Articles of Organization. This is a highly important LLC document—an entity cannot start operating without one. It should contain:

  • LLC name;
  • Principal office address;
  • Name and address of organizer;
  • Name and address of registered agent;
  • Names, addresses, and signatures of members;
  • Type of management;
  • Dated signature, name, and title of the applicant.

The application can be done online, by mail, or in person. The filing fee is $125.

Online Filing

If you use the Secretary of State’s online filing form, the processing time will take between 3-5 business days.

By Mail

As for the paper application, the form and the check covering the state fee should be directed to:

North Carolina Office of the Secretary of State
P.O. Box 29622
Raleigh, NC  27626-0622

Applications are processed within 5-7 business days.

In Person

Raleigh residents or visitors can apply in person at:

2 South Salisbury St., Raleigh, NC  27601

The review times are also 5-7 business days, though this method allows for same-day processing.

Step 4: Create an LLC Operating Agreement

The operating agreement outlines an LLC company’s bylaws and procedures. It’s up to the owners to determine how detailed and complex the agreement is, but it’s generally recommended to include:

  • Operational structure;
  • Asset allocation between the owners;
  • Voting procedures;
  • Member replacement strategy;
  • Dissolution process etc.

Although it’s not mandatory to have an operating agreement for an NC LLC, most business attorneys strongly advise creating one after you’ve finished with an LLC registration. Its advantages include:

  • Standardized processes contribute to faster operation;
  • Fewer inter-member conflicts;
  • Avoiding the state’s default laws that could be detrimental to business entities due to their generalized nature;
  • Further proof of separation between the owner’s personal property and North Carolina LLC’s assets which can be used as solidifying evidence in court to maintain liability protections. 

There are 2 ways to get an operating agreement:

  1. Hire an attorney;
  2. Use a free online template or the one provided with your service package by companies like ZenBusiness.

Step 5: Obtain an EIN 

EIN is a unique nine-digit number assigned by the IRS to keep track of a company’s tax accounts. Acquiring an Employer Identification Number (EIN) is mandatory for:

  • Hiring employees; 
  • Selling goods and services or to pay federal taxes;
  • Opening a business bank account.

By default, LLCs are exempt from corporate tax returns. Instead of federal tax forms, LLC’s income and losses are reported on the members’ individual tax returns.

There are a few exceptions though. For one, when or after you open an LLC in NC, the state gives you the option to elect a corporate taxation system.

You can get an EIN for a North Carolina LLC through the post, by fax, or online using the EIN Assistant. There is no filing fee for application or processing regardless of the method.

Online

If you’d rather get an EIN immediately, your best option is to file online. Applications are accepted on Mon-Fri between 7 am-10 pm EST and only after you provide a valid individual taxpayer number such as your Social Security Number.

By Mail

If you’re fine with waiting up to 4 weeks, it’s possible to send your application by mail. For this, download Form SS-4, fill it out and direct it to:

Internal Revenue Service Operation
Attn: EIN Operation
Cincinnati, OH 45999

Fax

The Form SS-4 can also be faxed to:

(855) 641-6935.

This method comes with 4-day processing.

Step 6: Open a Bank Account for a North Carolina LLC

When it comes to maintenance or creation, an LLC in North Carolina has the advantage over other structures by providing personal asset protection.

The limited liability structure and its separate financial account serve as proof of separation between business and personal finances, so if a company is taken to court, only its business assets become vulnerable to creditors rather than the personal assets of the owners.

To open a business bank account, you might need to provide your bank with:

  • A certified copy of the North Carolina LLC Articles of Organization to prove that you did indeed make an LLC in NC and had it approved;
  • LLC’s EIN;
  • Driver’s license, passport, state ID, etc.

Step 7: Taxes, Licensing & Income Reporting

After registering a North Carolina LLC, your focus inevitably shifts to business planning, market analysis, and other transactions. 

This doesn’t mean you should forget about maintenance requirements such as annual reporting. All of this is vital for keeping an LLC business in NC in good standing with the state.

Paying LLC taxes is also mandatory for most LLCs as well as acquiring business licenses and permits for legal operation in their industry. 

Taxes

Federal Taxes:

By default, LLCs are pass-through entities that do not pay income taxes on the federal level. All profits and losses are reported on the owners’ personal 1040 tax returns and Schedule C.

But if the entity has elected an S-corp system, it will be required to file a separate corporate tax return.

State Taxes:

Owning a business in North Carolina exempts you from any franchise or privilege tax. As for state’s income taxes, they are filed on personal returns just like federal income taxes.

Additional Taxes:

If a company establishes an official payroll, it becomes subject to withholding taxes and an unemployment insurance tax, while entities that sell goods and services are required to pay sales taxes and use taxes. 

You can register online for withholding, sales, and use taxes, but for unemployment insurance taxеs, you’ll have to file an Employer Status Report.

Other taxes may apply on a county or municipal level. All information on how to establish an LLC and register for mandatory taxes can be found on the official website or by contacting the jurisdiction’s clerk.

Licensing

In most cases, a simple entity registration won’t be enough to make your business legitimate. Most likely, establishing an LLC in NC will require you to obtain a license depending on the nature of your business. 

If you aren’t sure whether you need any business LLC license, make sure to check the state’s licensing page before doing business in North Carolina.

Counties and municipalities tend to enforce specific licenses as well, so don’t forget to contact your local government if you want to run an LLC in North Carolina legally.

Reporting

All NC LLCs are obligated to submit an annual report by April 15. You can file your report online or use a paper form. The processing fee is $200. 

Online:

Simply download the form, fill it out according to the guidelines, and submit. 

By Mail: 

Print your LLC annual report form, complete it, pay the fee, and send all forms along with the check to:

North Carolina Office of the Secretary of State
P.O. Box 29525
Raleigh, NC 27626-0525

It’s only natural to get overwhelmed by your duties as an owner, especially after opening a new LLC in North Carolina, but submitting your reports on time is absolutely crucial. Failure to file an annual report will inevitably result in penalties, but missing multiple deadlines can lead to involuntary dissolution.

Do You Need Help To Open Your North Carolina LLC?

If you’d rather stir clear of clerical formalities, hiring one of the legit business incorporation services might be the perfect solution. 

Services like IncFile or ZenBusiness are fully qualified to start LLCs in North Carolina online without charging an entire fortune. Better yet, both can provide a registered agent for a year for free.

Out of the two, IncFile is the more affordable option suitable for anyone who wishes to save up without compromising the service quality. Priced at only $0, IncFile’s service package is the cheapest option available, making the company one of the best LLC services in the industry.