How to Start an LLC in North Carolina (Step-by-Step Guide)

If you’re considering forming a North Carolina LLC, you’re making a smart choice for protecting your assets while enjoying flexibility in business operations.

One of the critical aspects of forming an LLC in North Carolina is selecting a unique name for your business. You’ll also need to appoint a registered agent and file your Articles of Organization with the Secretary of State.

Filing your LLC Articles of Organization in NC costs about $125; the approval process takes five business days.

This guide compiles all the information you need to start an LLC in North Carolina today.

What Are the Steps to Start an LLC in North Carolina?

To start an LLC in North Carolina, you need to:

• Step 1. Search and choose a unique name
• Step 2. Designate a registered agent in North Carolina
• Step 3. File Articles of Organization with the state
• Step 4. Create an Operating Agreement
• Step 5. Get an EIN from the IRS
• Step 6. File a BOI Report
• Step 7. File annual reports

Let us dive more in-depth into these steps so I can show you how to get them:

Step 1: Search and Choose a Name for Your North Carolina LLC

Choosing a name for your LLC is crucial. Your name must be unique and distinguishable from other businesses in North Carolina. Use the North Carolina Secretary of State’s LLC lookup tool to check name availability.

Your LLC name must include a designation that shows it is a limited liability company. You can use the full term “Limited Liability Company” or any of these abbreviations:

• LLC
• L.L.C.
• Ltd. Co.
• Limited Company
• LC
• L.C.

Make sure your name follows the naming guidelines set by the state.

If you have a specific name in mind and aren’t ready to file yet, consider reserving it. This allows you to keep your desired name for 120 days.

You can do this by filing an Application to Reserve a Business Entity Name. It costs $30 to file and can be done online or via mail to the NC Secretary of State at:

Business Registration Division
P.O. Box 29622
Raleigh, NC 27626

Lastly, it’s wise to search online for your business name to check if a URL is available. This ensures you can secure a website for your LLC and prevent others from using your name in the digital space.

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

A registered agent is essential for your LLC. This person or business is the official point of contact for receiving important documents, such as service of process, tax forms, and notices from the North Carolina Secretary of State.

Who Can Be a Registered Agent?

You have a few options for who can be your Registered Agent in North Carolina:

• You: You can act as your registered agent, but remember you must be available during business hours to receive documents.
• A Family Member: A trusted family member can be your registered agent.
• An LLC Formation Service: Professional services offer expertise in handling official correspondence and ensuring compliance with state regulations.
• A Lawyer: A legal service firm can also serve as your registered agent, providing additional legal support if needed.

Requirements for North Carolina Registered Agents

North Carolina law requires registered agents to have a physical street address, not just a P.O. Box. The address must be where the agent can consistently receive legal documents and official mail during regular business hours.

Additionally, the registered agent must be at least 18 years old and available to accept service of process. This means they must be present to handle any legal notices or court documents delivered to the LLC.

What registered agents do I recommend for North Carolina?

I highly recommend Northwest registered agent services for obvious reasons.

They offer a range of benefits that set them apart, including a free year of registered agent service, which helps you save (about $300) on initial costs.

You’ll receive a complimentary operating agreement essential for outlining your LLC’s internal structure. My favorite part? Northwest also allows you to use their office address for your LLC filing, keeping your address off public records and enhancing your privacy.

Their free email forwarding service ensures you stay on top of important correspondence, and their exceptional customer support is always available to assist you whenever needed.

Step 3: Prepare and File North Carolina LLC Articles of Organization

To register your LLC in North Carolina, you must prepare and file the Articles of Organization. This document officially creates your LLC. This form includes essential details such as your LLC’s name, address, registered agent, and members’ or managers’ names.

To file your Articles of Organization in North Carolina, follow these steps:

Step #1. Complete the Form: Obtain and complete the Articles of Organization form from the North Carolina Secretary of State website.

Here are the key details it must include:

• LLC Name: Choose a unique name for your business.
• Members’ Information: List the names and addresses of each member signing the document.
• Registered Agent: Provide the name and address of your registered agent in North Carolina.
• Principal Office Address: Include your central office’s address and phone number.
• Effective Date: Specify when you want the LLC to start operating.
• Signature: The document must be signed by a member, organizer, or representative.

Step #2: File Online or by Mail: You can file your Articles of Organization online through the North Carolina Secretary of State website or by mailing the completed form to:

Business Registration Division
P.O. Box 29622
Raleigh, NC 27626

Step #3: Pay the Filing Fee: The filing fee is $125. This fee is nonrefundable, so make sure everything is correct before submitting.

Once your articles are filed, the state will review and approve them. This process usually takes a few business days. After approval, your LLC is officially recognized, and you can start your business activities, obtain your EIN, open a bank account, etc.

Step 4: Prepare Your NC LLC Operating Agreement

An operating agreement is a document that outlines how your LLC will operate. It includes details about ownership, management, and duties.

While North Carolina does not require an operating agreement, having one is wise. It helps prevent misunderstandings among members and protects your limited liability status.

Here are some key components to include in your operating agreement if you choose to prepare one:

• Ownership Structure: Listing all members and their ownership percentages.
• Management Roles: Specify who will manage the LLC. This can be member-managed or manager-managed.
• Voting Rights: Define how decisions will be made. Will all members have equal votes?
• Profit Distribution: Explain how profits and losses will be shared among members.
• Meeting Procedures: Outline how often meetings will occur and how members will be notified.
• Amendment Process: Describe how changes can be made to the agreement in the future.

Creating an operating agreement may feel complex, but it’s essential for clarity.

It serves as your LLC’s rulebook, guiding operations and avoiding conflicts down the line. Keeping everyone on the same page is even more vital if you have partners.

Step 5: Obtain an EIN for Your LLC

An Employer Identification Number (EIN) is a unique nine-digit number the IRS assigns. It identifies your business for tax purposes.

You will need an EIN to open a bank account, hire employees, file taxes, and apply for business licenses and permits.

How to Apply for an EIN:

• Online: Visit the IRS website. This is the fastest way to get your EIN.
• By Mail: Fill out Form SS-4 and send it to the IRS. This option takes longer.
• By Fax: You can also fax the completed Form SS-4.
• Phone: U.S. residents can call the IRS at 1-800-829-4933 to apply.

How Much Does It Cost To Get EIN?

Obtaining an EIN is free. However, some services charge $100 or more to help you with the entire process.

How Does it Take to Obtain my EIN?

• Online: Get it immediately.
• By Mail: Expect 4 to 6 weeks.
• By Fax: Usually within 4 business days.

Step 6: File a BOI Report

After setting up your LLC in North Carolina, you must file a Beneficial Ownership Information (BOI) report. This is a federal requirement for new LLCs.

You must submit this report to FinCEN within 90 days of forming your LLC. Filing is free and can be done online at the FinCEN website.

Here’s what you need to prepare:

• Company Information: Name, address, and formation date.
• Beneficial Owners: Full names, addresses, dates of birth, and identification numbers.

Gather this information along with your LLC formation documents. This will help streamline the filing process.

Completing the BOI report is essential for maintaining compliance with federal regulations. It ensures transparency about who owns and controls your LLC. Take the time to do this correctly to avoid any potential penalties.

Step 7: File your Annual Report

You must file an Annual Report for your North Carolina LLC every year. This report keeps your business in good standing with the state.

The filing fee is $200 annually, and your Annual Report is due by April 15.

Your first Annual Report is due the year after your LLC is approved. For example, if your LLC was approved on June 30, 2024, you must file your first Annual Report by April 15, 2025.

How to File

You can file your Annual Report in three ways:

• Online:

  • Use the NC SOS Business Search Tool.
  • Find your LLC, click “File Annual Report,” and follow the instructions.

• By Mail:

  • Download and print the report.
  • Send it to:
    Business Registration Division
    P.O. Box 29525
    Raleigh, NC 27626

• In Person:

  • Visit:
    Business Registration Division
    2 South Salisbury Street
    Raleigh, NC 27601

It is crucial to stay on top of your Annual Report filing. If you fail to file, your LLC could be at risk of administrative dissolution. By meeting this important requirement, you can keep your LLC active and compliant.

What are the Different Methods To Start a North Carolina LLC?

You have several options to start your LLC in North Carolina. Each method has its steps, advantages, and drawbacks. Here’s a look at the three main methods: doing it yourself, using a service, or hiring an attorney.

DIY LLC Formation in North Carolina

You can form your LLC by completing the necessary filings on your own. This method involves filling out the Articles of Organization and submitting them to the NC Secretary of State.

Pros:

• Cost-effective: You only pay the filing fee of $125.
• Full control: You manage every step and customize your LLC’s formation.
• Learning opportunity: You gain knowledge about the process.

Cons:

• Time-consuming: It may take longer if you are unfamiliar with the process.
• Potential for errors: Mistakes in paperwork can slow down your application.
• Limited assistance: You may struggle without professional guidance.

Using a Professional/Online LLC Formation Services

Many online services help you form your LLC. These services guide you through the process, often providing templates and filing assistance.

Pros:

• Convenience: Most services handle all paperwork and filings.
• Faster processing: They often expedite the process for you.
• Expert guidance: Access to resources and customer support.

Cons:

• Additional costs: You will pay service fees on top of the filing fee.
• Variable quality: Not all services provide the same level of expertise.

Hiring an Attorney

You can hire an attorney specializing in business formations if you prefer a more personalized approach. An attorney can offer tailored advice and handle all legal aspects.

Pros:

• Expert advice: You receive professional guidance tailored to your situation.
• Legal protection: An attorney helps you avoid legal pitfalls.
• Time-saving: They handle all paperwork and filings on your behalf.

Cons:

• Higher costs: Attorney fees can be significant compared to DIY or online services.
• Less control: You rely on someone else for the formation process.
• Possible delays: Coordinating with an attorney may take additional time.

What is The Cheapest Alternative Way to Form an LLC in North Carolina?

If you’re looking to start an LLC in North Carolina on a budget, the most affordable option is to do it yourself online. By filing the Articles of Organization directly with the North Carolina Secretary of State, you can keep costs between $125 and $150, depending on your needs.

This DIY approach helps you avoid the extra fees of hiring a service or lawyer, saving you money for other business expenses.

However, while DIY is cost-effective, it requires some effort. You’ll need to understand all the forms and regulations, and missing a detail could delay your application or create problems later.

Consider using a registered agent if you prefer not to handle everything yourself.

They can make the process smoother by ensuring you receive important documents and helping you stay compliant with state requirements. Although this adds a bit to the cost, it can provide valuable support and peace of mind.

Who Provides the Best LLC Services in North Carolina?

There are a myriad of North Carolina LLC services from which to choose. Choosing the wrong one can affect your North Carolina LLC formation timeline—I know this from my experience using a few and researching a dozen over the years.

Here are some top-rated options you should consider:

Best North Carolina LLC Service	Google Rating	LLC Formation Cost	Registered Agent Fee
Northwest Registered Agent	4.7/5	$39	Free for one year
Doola	4.6/5	$0 (plus state fees)	$297/year
Tailor Brands	4.4/5	$0 (plus state fees)	$199/year
ZenBusiness	N/A	$0 (plus state fees)	$199/year

Besides, the fact that other services bill you for their registered agent in the first year, and Northwest offers it for free, is a HUGE plus for me.

Northwest Registered Agent stands out in North Carolina LLC formation due to its commitment to transparency, customer service, and privacy. Using their address helps protect your personal information, making them a reliable choice.

How Much Does It Cost To Form an LLC in North Carolina?

The primary expense when forming an LLC in North Carolina is the state filing fee for the Articles of Organization. The cost to file these articles is $125. This fee is a one-time payment you make to the Secretary of State of North Carolina.

In addition to the filing fee, other potential costs are to be considered.

Here’s a breakdown of the entire North Carolina LLC costs:

Requirement	Cost
New LLC Filing Fee (Articles of Organization)	$125
Name Reservation Fee	$30
LLC Formation Service	$39 (via Northwest)
Registered Agent Fee	$0 (via Northwest)
EIN	Free
Annual Report Fee	$200
Total Estimated Cost	$325 – $400

When forming a new company in NC, it is ideal to budget about $325-$400 for the first year. Then, if you want to go further, you can get other bells and whistles like a virtual mailbox, custom website, trademark services, premium EIN services, etc.

The most significant (and essential) expense for every North Carolina business owner is filing the Articles of Organization, which costs $125.

Pros and Cons of Forming an LLC in North Carolina

6 Important Things To Do After Creating Your North Carolina LLC

Starting your LLC is just the beginning. You should take several key steps to ensure your business runs smoothly and meets all legal requirements.

1. Research the Best Licenses and Permits for Your Business

After setting up your LLC, it’s crucial to determine which licenses and permits you need. The requirements vary depending on your business type and location.

Start with the North Carolina Business License Information website. Depending on your industry, you may require local, state, or federal permits.

Common examples include:

• Sales Tax Permit: Needed if you sell goods or services subject to sales tax.
• Professional Licenses: Required for certain professions, such as healthcare or legal services.
• Zoning Permits: Important if you operate from a specific location or home.

Ensure you obtain these permits before launching your business to avoid fines or legal troubles.

2. Create Business Accounts for Your NC LLC

Opening a separate bank account for your LLC is essential for keeping your business finances organized and distinct from your funds. This separation simplifies your accounting and helps safeguard your assets by clearly distinguishing between personal and business transactions.

When choosing a bank, look for one that offers business-friendly services, such as waived fees, free online banking, and other features that can benefit your business. To open the account, be prepared to provide your EIN and a copy of your Articles of Organization.

A dedicated business account streamlines your financial management and simplifies tax preparation.

Having all your business transactions in one place lets you easily track your income and expenses, ensuring everything is well-organized and accessible when tax season rolls around.

3. Understanding North Carolina Tax Requirements and Managing Your Taxes

When forming an LLC in North Carolina, your taxes depend on your business type and operations.

Here’s a breakdown:

• Employment Taxes: If you hire employees, you must pay employment taxes to the state.
• Sales Tax: If you sell products to customers, you must collect and remit NC sales tax.
• Personal Income Tax: LLC members must report their business earnings on income tax returns.

By default, an LLC is treated as a partnership or sole proprietorship, meaning the business doesn’t pay income taxes. Instead, the tax liability passes through the LLC to its members, who report the income on their tax returns.

If you choose to have your LLC taxed as a Corporation, you’ll pay a franchise tax to the State of NC.

If you choose to have your LLC taxed as a C-corp, the business will pay taxes directly to the state on its income. Additionally, members will pay personal income tax on their earnings from the business.

Electing S-corp status allows you to divide your income into employment wages and personal income. This structure can offer tax advantages by reducing the amount of income subject to corporate taxes.

Understanding these options can help you make informed decisions about structuring your LLC’s taxation in North Carolina.

4. File Your North Carolina Annual Report

After your LLC is formed, you must file an Annual Report with the North Carolina Secretary of State annually. This report confirms that your business is active and up to date.

This is due regardless of business activity or income. This means that even if your LLC does nothing and makes no money, you must file this paperwork yearly.

The North Carolina Secretary of State will send out reminder notices every March.

The filing fee is $200 annually, and your Annual Report is due by April 15. You can file online or by mail.

5. Get Business Insurance for an LLC

Just as you wouldn’t leave your home without coverage, your LLC also needs the right business insurance to guard against potential risks and liabilities. Insurance protects your company’s assets and ensures financial stability in case of unforeseen issues or legal claims.

Your insurance needs will vary based on your business operations.

For example, general liability insurance covers risks such as slip-and-fall accidents or property damage if your LLC operates from a physical storefront.

Conversely, if you run your business as a consultant and work remotely, you might only need professional liability insurance to cover potential service errors or omissions. Assessing your business needs helps you choose the appropriate coverage to protect your LLC.

6. Setup Your Business Online Presence (optional)

In today’s digital age, online presence can significantly benefit your business. Start by creating a professional website. This platform allows you to showcase your services and connect with customers.

Consider using social media to engage your audience. Platforms like Facebook, Instagram, and LinkedIn can enhance your visibility.

A solid online presence helps with marketing and establishes credibility in your industry.

North Carolina LLC vs. S Corp vs. Partnerships vs. Sole Proprietorship vs. Corporations

Starting a business means choosing a structure that fits your needs. Here are the main options:

Sole Proprietorship

A North Carolina sole proprietorship is the most straightforward way to start a business. Imagine you’re running a lemonade stand on your own. You make all the decisions and keep all the profits.

However, there’s no legal separation between you and your business. If your lemonade stand faces financial trouble or legal issues, your assets, like your car or home, could be at risk. It’s easy to set up and manage, but it does leave you personally responsible for any business debts.

Partnership

A North Carolina partnership involves teaming up with one or more people to run a business.

Think of it as joining forces with a friend to open a café. You share the profits and responsibilities, and you both make business decisions.

However, like a sole proprietorship, each partner is personally liable for any business debts or legal issues. If the business encounters financial trouble, your assets could be at risk, too. Partnerships are relatively easy to set up but require clear agreements between partners to avoid conflicts.

LLC (Limited Liability Company)

An LLC offers a blend of flexibility and protection.

Picture it as a protective umbrella over your lemonade stand. This structure separates your assets from your business, so if your LLC faces legal issues or debts, your personal belongings are generally safe.

LLCs are more formal than sole proprietorships or partnerships but offer management and tax treatment flexibility. They are ideal for small—to medium-sized businesses that want liability protection without the complexity of a corporation.

S-Corporation

An S Corporation is a more structured business form.

Think of it as a business where owners are shareholders, much like a small-scale company with multiple investors. It protects liability and allows profits to pass through to your tax return, avoiding double taxation.

This means you report the income and losses on your tax return, which can be beneficial for tax purposes. However, S Corps have stricter operational requirements and formalities compared to LLCs.

Corporation

A North Carolina corporation is the most complex structure, suitable for larger businesses aiming for significant growth. Imagine a big company with many shareholders. A corporation offers robust liability protection and is a separate legal entity from its owners, meaning your assets are protected.

Corporations can raise capital more efficiently by issuing stock and can offer employee benefits.

However, they come with extensive regulatory requirements, formalities, and paperwork, making them more suitable for businesses with significant resources and expansion plans.

My Final Thoughts: Forming an LLC in North Carolina

Starting an LLC in North Carolina is an exciting step toward bringing your business idea to life. Although it might seem like many steps initially, breaking them down makes the process more manageable and ensures you cover all the essential bases.

Starting an LLC in North Carolina involves a few straightforward steps:

• Choose a name for your LLC.
• Designate a registered agent in North Carolina
• File the Articles of Organization with the Secretary of State.
• Prepare an Operating Agreement
• Obtain an EIN from the IRS
• File a BOI Report on the FinCEN website
• File annual reports

The filing fee for the Articles of Organization is $125.

After forming your LLC, prepare for annual reports, which cost $200 yearly.

Forming an LLC provides many benefits. It offers liability protection and can help you appear more professional to clients. With the proper preparation, you can navigate the process smoothly and start your business on sound footing.

Learn More About Starting an LLC in North Carolina

If you need additional help to start an LLC in North Carolina, check out these valuable resources:

Frequently Asked Questions

Can I change my registered agent in North Carolina?

Yes, you can change your registered agent in North Carolina. To update the information, you must file a form with the Secretary of State. Be sure to provide the new agent’s information and address.

How do I change my North Carolina LLC’s name?

You must file an amendment with the North Carolina Secretary of State to change your LLC’s name. This involves completing a form and paying a fee. Once processed, your LLC will be recognized under the new name.

How do I renew my North Carolina LLC?

Renewing your LLC in North Carolina involves filing an Annual Report with the Secretary of State. This report is due by April 15 each year. Pay the required $200 fee to keep your LLC in good standing.

How do I dissolve an LLC in North Carolina?

To dissolve your LLC, file Articles of Dissolution with the North Carolina Secretary of State. You must pay a fee and settle all debts before submitting the form.

How do I add a member to a North Carolina LLC?

You must update your Operating Agreement and inform your registered agent to add a member. You should also notify the Secretary of State if necessary, depending on the structure of your LLC.

How do I add a DBA to an LLC in North Carolina?

To add a DBA (Doing Business As) name to your LLC, you must apply to Register a Trade Name with the Secretary of State. This document includes your chosen DBA and is filed for a small fee.

Can a minor own an LLC in North Carolina?

Yes, a minor can own an LLC in North Carolina. However, a legal adult must act on their behalf in business matters, as minors cannot enter into contracts.

When is the North Carolina Annual Report due?

The Annual Report for LLCs in North Carolina is due by April 15 every year. Make sure to submit it on time to avoid penalties.

Does LLC expire in North Carolina?

LLCs do not expire in North Carolina as long as you file the Annual Report and pay any dues. If you fail to file for a few consecutive years, your LLC could be administratively dissolved.

Can a non-resident open an LLC in North Carolina?

Yes, a non-resident can open an LLC in North Carolina. You will need a registered agent with a physical address in the state to handle legal documents for your business.

Can I buy a house or car with my LLC in North Carolina?

Yes, you can buy a house or car in North Carolina under the name of your LLC. Ensure the purchase is aligned with the business’s goals and correctly reflected in the LLC’s financial records.

Can you have multiple businesses under one LLC in North Carolina?

No, each LLC is a separate legal entity. If you want to operate multiple businesses, you should consider forming separate LLCs for each one to protect personal liability.

Is North Carolina a good state to form an LLC? Is it worth it?

North Carolina offers a business-friendly environment and reasonable filing fees. The state can be a good option for starting an LLC, but you should evaluate your specific business needs.

Can one person form an LLC in North Carolina?

Yes, one person can form an LLC in North Carolina. This is known as a single-member LLC. It allows for the same liability protections as an LLC with multiple members.