The formal registration process of a limited liability company (LLC) in North Carolina can be a complex one. However, you can do it easily if you have the right information.
Let’s discuss the LLC registration process, cost, and time it takes with our 2022 guide.
Select a name for LLC in North Carolina
Selecting an official business name is the first step to creating a limited liability company (LLC) in North Carolina.
You can use any business name for the LLC provided is it available and not registered already. You can conduct an online LLC name search on the Secretary of State North Carolina website to confirm the availability of your preferred business name.
The official LLC name must include the phrase “limited liability company” or the abbreviations “LLC”, “L.L.C”, etc. You may also include “Ltd.” or “co.” at the end of the business name.
You cannot use a misleading business name for the general public such as “welfare society”, “charity”, “Health organization”, etc.
Similarly, you cannot use prohibited words like “bank”, “Insurance company”, “Trust”, “exchange”, etc.
Conducting thorough research for an LLC name can help you avoid patents and trademark complications as well. You should also search for an LLC name available outside the SoS NC website.
If you plan to register the LLC at a later time, you can reserve a business name for 120 days in North Carolina. You can renew the reservation at expiry until you finally register the LLC.
You can use an assumed business name in North Carolina as well. The state regulations allow businesses to operate under their brand names. It helps businesses to officially register with brand names and protect their copyrights.
Appoint a Registered Agent
Like other states in the US, North Carolina also requires appointing a registered agent for all businesses. Therefore, the second important step is to appoint a registered agent for your limited liability company in North Carolina.
A registered agent can be an individual or a business. The role of a registered agent is to communicate and receive official documents from state regulatory authorities on behalf of a registered LLC.
You can appoint yourself as a registered agent or any other person, partner, attorney, or professional service provider.
If you reside outside of North Carolina, it’s a good idea to hire an attorney or a professional agent to work as a registered agent for your limited liability company to deal with legal communication.
File the Article of Organization
The formal application or registration for an LLC in North Carolina is by filing the article of organization. It is applied through Form LP-01.
Important points to include in the article of the organization (form LP-01) are:
- Complete LLC name with the prefix (LLC, Co.) etc.
- Name and address of all members of the LLC who sign the article of organization as members, organizers, or both.
- Name of the registered agent
- Street address of the registered office
- Principal office or the business address of your LLC
- Business Contact Number
- The effective filing date of the LLC.
The effective date and the filing dates for an LLC are the same unless you specify another date. You can delay the effective date of the LLC by up to 90 from the filing date.
The article of organization must be signed by all members and organizers of the LLC as mentioned above. This process is completed only once at the time of registering the company.
However, if you need any changes in the legal structure of the LLC, you can file for amendments in the article of organization by paying the nominated fee.
There are three options to file for the article of organization in North Carolina:
- Online via the SoS North Carolina website.
- By Mail to the business registration office.
- In-person at the designated office locations.
Create a North Carolina LLC Operating Agreement
An operating agreement is not a legal obligation for an LLC in North Carolina. State regulators in North Carolina do not require it by law like many other states.
An operating agreement outlines the structure and the way your LLC will be run. It is a useful business document that you may need for several purposes.
An operating agreement can include the following points:
- Names and details of LLC members (owners).
- Shareholding stakes of LLC members.
- Managers, organizers, and signors of the LLC.
- Establishing individual responsibilities and roles of all LLC members.
- Profit distribution mechanism.
- LLC dissolution terms.
- LLC operating terms and conditions.
In short, it is a formal business document that helps you outline how you’ll run the LLC. Although not a legal obligation, you can show it to investors, lenders, creditors, trade partners, and in court cases when required.
Apply for the Employer Identification Number (EIN)
Limited liability companies in North Carolina must obtain the employer identification number (EIN) from Internal Revenue Service (IRS).
EIN is not mandatory for single-member LLCs as they pay taxes as individuals rather than businesses.
You can obtain the EIN by providing the LLC registration details through the IRS online portal easily in a few clicks.
Additional Requirements for an LLC in North Carolina
Once you complete the LLC registration process, there are a few additional but important steps to consider.
Paying Corporate Taxes in North Carolina
You must register with the Department of Revenue North Carolina to file and pay state taxes. An LLC may have to pay different corporate and employment taxes in North Carolina.
- The corporate income tax in North Carolina is currently 2.5%.
- The general “sales and use tax” rate is 4.75%.
- The unemployment taxable wage is $28,000 in North Carolina. The unemployment insurance tax rate varies from 0.76% to a maximum of 5.76%. Most business pay around 1%.
Obtain a Business License and Permit (if Applicable)
An LLC in North Carolina may require obtaining a business license or permit from local authorities as well. These permits or licenses are issued for businesses in specific categories and not all businesses will require them.
You can check with the local authorities whether your LLC requires a specific license or permit.
Filing Annual Reports
Limited liability companies in North Carolina are required to file annual reports with SoS NC. Therefore, you must file the annual business report by the due date every year.
You can file the annual LLC report online or by mail and pay the required annual fee of $200.
Prepare a Business Plan
A business plan is not a mandatory or official business document required for an LLC in North Carolina. However, it helps you complete the registration process and start the business smoothly.
A business plan provides detailed instructions on every step of your LLC formation from the registration process to seeking finance and from marketing strategies to launching your first product.
Open a Bank Account
Even when you operate the LLC as a single member, you must open a business bank account. It is an important step to separate personal and business financials for any business.
Once your LLC registration is complete, you can open a bank account easily and use it for all business transactions in the future.
How Much Does It Cost for an LLC in North Carolina?
The total legal cost of filing registration for an LLC is only $125 and for a foreign LLC, it is $250. If you use the business name reservation service, it will cost you $30.
Additionally, you must pay $200 (or $202) for filing an annual report of the LLC. All other costs of setting up an LLC in North Carolina are for optional services.
For example, if you want to register an LLC within the same day, you can use the express service option by paying $100 extra.
How Long Does It Take to Register an LLC in North Carolina?
The normal process to register an LLC in North Carolina takes around 5-7 business days when applied online. If you send the registration documents by mail, it may take longer and up to four weeks.
You can use the express service to register an LLC in North Carolina on the same day for an additional fee of $100.
How to Dissolve an LLC in North Carolina?
If you want to dissolve an LLC for any reason, you can file for it by using the article of dissolution or Form L-07 with the SoS North Carolina office.
The fee for this service is $30. However, you must clear all debts and trade payables before applying for the LLC dissolution.