Having an LLC in NC is a better and cheaper option than having other business structures. A limited liability company (LLC) reduces the owners’ personal liability and protects their personal assets. One can start an LLC in two ways, domestic LLCs or foreign LLCs (LLCs in more than one state). By following some basic steps, you can easily form an LLC in North Carolina.
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
- Why an LLC in North Carolina
- Top Businesses Operating in North Carolina
- 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. This section gives you a step-by-step guide on how to start an LLC in NC.
Step 1: Decide a Name for Your LLC
Deciding on a business name is the first step to start an LLC. In North Carolina, before you name your LLC, it is important to note a few things. Firstly, make sure the name is available to use. If the name is available, then check if the name complies with all the North Carolina business naming requirements. Once you pass through them, you can successfully name your business.
Why do you need a proper business name?
If you want your LLC to have special identification, your company name is essential. However, many people face lots of issues by avoiding focus on choosing a business name for their LLC business formation filings.
Because of this, here are some of the major benefits of choosing the best LLC corporate names.
- To help establish a company’s presence in the market, a proper business entity type will help you. This also creates a new identity that will resemble your LLC.
- After you’ve properly chosen the name for your LLC, you will have no problems finishing the registration service process.
- You can only get the EIN number when you have your name registration certificate with you.
Requirements when deciding a name for your LLC
LLC Name Search: A business name search is required to check if the desired name is available or not. If the name is available then the business owner has to fill up a name reservation form and send it to the Secretary of State, North Carolina. To do the name search, one has to visit the Business Entity Search page on the official Secretary of State website. Send the name reservation form to the below address by mail to reserve your LLC name in North Carolina. The cost of a name reservation is $30.
Important Quick Links:
Business Registration Division
PO Box 29622,
Raleigh, NC 27626-0622
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Step 2: Assign a Registered Agent in North Carolina
A registered agent, or business entity, is a person that will act or work on your behalf. This person or business will receive significant tax forms, legal documents, a notice of lawsuits, and other official government correspondence in North Carolina. Choosing a North Carolina registered agent for your LLC is required.
Make sure your registered agents are residents of North Carolina. It could also be a business. Here are the recommended agents and employees for you:
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Note that availing of the services of professional registered agents would be your best option since you are guaranteed that whoever is handling your legal affairs knows their stuff well. You will enjoy peace of mind and focus only on running your business, as the ‘professionals’ take care of all legal matters.
These LLC formation services are recommended registered agent services as they are authorized to conduct business in North Carolina. Compare them to check the best yet cheapest option for you. Besides, they can guarantee you professional service because they have been in the business for years.
Step 3: File Articles of Organization in North Carolina
A Certificate of Name Reservation is needed to file Articles of Organization, as other states call it. You need to make reports of this certificate with the North Carolina Secretary of State, which costs $125. LLC cost of North Carolina includes other fees and taxes. You may file them online or by mail.
This North Carolina Certificate of Formation is a legal formation document needed to form your business officially. It will indicate details about your LLC in North Carolina, like if it is a member-managed or managers-managed.
Before you start filings, you must already have your LLC name and registered agents or employees. You will attach a copy of your Name Reservation Certificate along with a list of the services that your North Carolina LLC will offer.
How to File Online
Go to the Secretary of State Online Service. Select “non-subscriber.” Fill out online and file form. The website will alert you if your county does not support online filing services after selecting your principal county. To know more about online filing, visit the NC Certificate of Formation.
How to File by Mail
If you prefer filing real-life forms for your North Carolina LLC registration, then you can download the North Carolina Limited Company Certificate of Formation. Read the form thoroughly and fill it out. It will have to fill, among others, your name, city, state, zip code, and signature. You may also file in person by visiting the office on business days.
Mail To: The Secretary of State
Business Registration Division
P.O. Box 29622
Raleigh, NC 27626
Step 4: Create Your Liability Company 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 an LLC operating agreement North Carolina does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all your details of business operation. This document would be useful if you decide to dissolve North Carolina LLC later.
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 types of business for tax purposes and taxes in general. It is like a Social Security number dedicated to a business’ taxes. The EIN is necessary for any active business or any form of business for that matter.
To obtain EIN (aka FEIN) one has to fill up a form (Online or by mail) and submit it to the IRS. Before sending the form, ask for EIN Assistant. Enter details of your LLC, and finally complete the form and send it to the address given.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
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.
And that’s all! Congratulation, you are now done with all the necessary steps to form your North Carolina LLC. If you still haven’t used a professional service from here, I strongly recommend having one to handle the remaining tasks.
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 liability for business and professional liability insurance with coverage for employees
- File a North Carolina LLC annual report or biennial report
- Already existing LLCs that wish to operate in North Carolina must register as North Carolina foreign LLC.
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.
North Carolina Foreign LLC
To register a North Carolina foreign LLC, one has to file the foreign LLC formation certificate with the Secretary of State, North Carolina. Forming a foreign LLC allows you to operate your business in more than one state in the USA as a single business entity. Check North Carolina Foreign LLC to know more about having a foreign LLC.
Why an LLC in North Carolina
In terms of GDP, North Carolina is considered the 9th wealthiest state of 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 that they can redeem amid their registration and set-up in the state. 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 North Carolina. 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. You can check out our list of our 5 Best LLC Services in the United States.
- File a formation certificate
Filing a formation certificate is necessary when forming an LLC. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create operating agreement
An operating agreement is not a strict requirement but something encouraged when you start an LLC.
- 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.
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.
Every year all the LLC 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.
LLCs are easier to establish than other business structures. Small businesses, especially start-ups can easily start their 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, leave a comment below.