How to Start an LLC in North Carolina (2023 Guide)

How to Form an LLC in North Carolina in 5 Steps

In order to form your LLC in North Carolina, there are certain steps you’ll need to complete:

1. Name Your LLC
2. Choose a North Carolina Registered Agent
3. File Your Articles of Organization
4. Create an LLC Operating Agreement
5. Obtain an EIN

Step 1: Name Your North Carolina LLC

Before you get started, you will need to pick a suitable name for yourNorth Carolina LLC.

This will need to comply with all applicable naming requirements under North Carolina law and be both succinct and memorable, as this will make it easily searchable by your potential clients.

1. Important Naming Guidelines for North Carolina LLCs:

• Your name must include the words “limited liability company,” the abbreviations “LLC” or “L.L.C.,” or the combinations “Ltd. Liability Co,” “Limited Liability Co,” or “LTD. Liability Company.”
• Your name cannot include words that could confuse your LLC with a government agency (FBI, Treasury, State Department, etc.).
• Restricted words (e.g. Bank, Attorney, University) may require additional paperwork and a licensed individual, such as a doctor or lawyer, to be part of your North Carolina PLLC.
• Your name must be distinguishable from any other North Carolina limited liability company, corporation, limited liability partnership, or limited partnership.
• Your name cannot contain language that states or implies that it was formed for any purpose other than what is permitted in its formation documents.
• Your name cannot contain words that are deemed “offensive to accepted standards of decency.”
• Professional LLC names must include the word “professional” or the abbreviation “PLLC” or “P.L.L.C.”

We recommend checking out theNorth Carolina Secretary of State's guidelinesfor a complete list of naming rules in this state.

2. Is the name available in North Carolina?

To check whether your desired name has already been taken by another business entity in North Carolina, you can perform aNorth Carolina LLC Name Searchon the state's website.

If you’re not going tostart your LLCright away, it might be a good idea to consider reserving your name. In North Carolina, you can do this for up to 10 years by filing an Application to Reserve a Business Entity Name.

For more information, have a look at ourNorth Carolina Name Searchguide.

3. Is the URL available?

We recommend that you check to see if your business name is available as a网络域. Even if you don't plan to make a business website right away, this is an extremely important step that will prevent others from acquiring it, potentially saving you both time and money in the long term.

Once you have verified your name is available, you may now select a professional service to complete the LLC formation process for you.

We reviewed and ranked the118金宝app . Find out which is best for you.

FAQ: Naming a North Carolina LLC

Step 2: Choose a Registered Agent in North Carolina

After you find the right name for your LLC, you will need to nominate aNorth Carolina registered agent. This is a necessary step in your Articles of Organization (i.e., the document used to file and register your LLC with the Secretary of State.).

What is a registered agent?北卡罗来纳州注册代理是一个独立的个体or business entity that is responsible for receiving important tax forms, legal documents, notice of lawsuits, and official government correspondence on behalf of your business. You can think of your registered agent as your business's primary point of contact with the state.

Who can be a registered agent?A registered agent must be a resident of North Carolina or a corporation, such as a registered agent service, authorized to transact business in North Carolina. You may elect an individual within the company (e.g., yourself, etc.) or use a business attorney.

Under55D-30of the NC General Statutes, the sole duty of the individual or company you appoint as your registered agent is to forward any notices, demands, or processes served against you to your LLC’s last known address.

FAQ: Nominating a Registered Agent

Step 3: File the North Carolina LLC Articles of Organization

To register your limited liability company, you will need to fileForm L-01: Articles of Organizationwith the Secretary of State. You can apply online, by mail, or via PDF upload.

Before filing, make sure you have the information needed to complete your Certificate of Formation correctly. To file, you will need to have completed the following steps:

1. Enter your complete LLC name. This will need to be compliant with the North Carolina naming guidelines discussed above.
2. Enter the names and addresses of all persons executing the Articles of Organization, as well as whether they are executing in the capacity of a member or of an organizer (or both).
3. Enter the name and full address of your registered agent. If you do not want mail to be directed to this address, you will also be required to provide a mailing address (Item 5)
4. If applicable, select “a) if your LLC has a principal office, and provide a telephone number, street address, and county. If you do not have a principal office, select “b” instead.
5. If applicable, provide any additional information in accordance with statutory law, such as the names and addresses of all members, as well as whether an executor should not be made a member.
6. List your business’s company officials. (This step is optional, but is meant to help LLC owners comply with federal banking regulations.).
7. Provide an email address if you want to participate in the Secretary of State’s free notification system. (This is also optional.)
8. If applicable, provide a delayed date of filing (up to 90 days in the future). If this is not done, your Articles of Organization will be effective on the time and date of filing.

Note:Keep in mind that, unless specified otherwise, each person executing the Articles of Organization will become a member of the company as soon as the LLC is formed.

For help with completing the form, visit ourNorth Carolina Articles of Organizationguide.

Note:If you're expanding your existing LLC to the state of North Carolina, you'll need to form aforeign LLC.

FAQ: Filing North Carolina LLC Documents

Step 4: Create a North Carolina LLC Operating Agreement

In North Carolina, LLCs are not required to have an operating agreement, but it's a good practice to have one.

What is an operating agreement?An operating agreement is a legal document outlining the ownership and operating procedures of an LLC.

Why are operating agreements important?A comprehensive operating agreement ensures that all small business owners are on the same page and reduces the risk of future conflict.

For more information, read ourNorth Carolina LLC operating agreementguide.

FAQ: Creating a North Carolina LLC Operating Agreement

Step 5: Get a North Carolina LLC EIN

You can get an Employer Identification Number(EIN)from the IRS for free. It is used to identify a business entity and keep track of a business’s tax reporting. It is essentially a Social Security number (SSN) for the company.

为什么我需要一个EIN?An EIN number is required for the following:

• To open abusiness bank accountfor the company
• For federal and state tax purposes
• 为公司雇佣员工

Where do I get an EIN?An EIN is obtained from the IRS (free of charge) by the business owner after forming the company. This can be done online or by mail.

FOR INTERNATIONAL APPLICANTS:Youdo not need an SSNto get an EIN.Learn more here.

FAQ: Getting an EIN

Maintain Your North Carolina LLC

After you’ve successfully formed your LLC, there are a couple of steps you’ll need to periodically take in order to maintain it, including:

• Filing an annual report
• Sorting out your tax requirements

We’ve provided more information on how to complete each of these steps below.

File an Annual Report

After you have formed a North Carolina LLC, you will be required to file an annual report in order to keep your business in good standing with the state. This filing is meant to ensure that your business's information (e.g., address, name, registered agent, etc.) is up to date.

You can file your LLC’s annual reportonlineorby mail, along with the $200 filing fee. The deadline for this is April 15 of each year.

Note:There are no penalty fees for filing your annual report late; however, you’ll be sent a Notice for Grounds for Administrative Dissolution or Revocation of Foreign Business and will then have 60 days to complete the report.

Sort Out Your Taxes

Though there is no state income tax, there are a number of different taxes you’ll be required to pay at a local, state, and federal level as a North Carolina LLC. Your LLC’s tax obligations can also vary depending on the nature of your business (e.g., industry, niche, profession, etc.).

Below are the most common taxes in North Carolina:

Sales and Use Taxes

In North Carolina, sales and use tax is imposed at a general rate of 4.75%, though cities and counties across the state are able to impose their own additional rates that range from 0.00% to 2.25%. These local rates can combine with the general rate and up to a maximum of 7.50% in counties that impose a 0.50% transit rate (e.g., Durham, Orange, and Wake).

Sales and use taxes apply to the sale, lease, rental, or use of tangible personal property and certain services, with the exception of some items such as certain foods, clothing, and prescription drugs. At the point of purchase, your LLC collects this tax from consumers and then remits it to the North Carolina Department of Revenue.

You can file your sales and use tax return by mail using theE-500 Form, or electronically by using theOnline Filing and Paymentssystem.

Note:If your business plans to sell any taxable goods or services, it will need to register with theNorth Carolina Department of Revenueand obtain a Certificate of Registration.

Income Taxes

In addition to their federal obligations, LLCs in North Carolina are also required to pay certain statewide taxes on the income they generate. We’ve explored the two main types to be aware of in more detail below:

• Individual Income Tax:For the current tax year, this is set at a flat rate of 4.75% on the taxable income of your LLC, regardless of how much it generates. You can use the NC Department of Revenue’sindividual income tax estimatorto get an idea of how much you’ll need to pay.
• Corporate Income Tax:While this is currently set at a flat rate of 2.5% the state plans to completely phase out corporation tax over five years, starting in 2025.

The simplest and quickest way you can file and pay both types of income taxes online using theNC Department of Revenue’s website.

Franchise Tax

LLCs taxed as corporations in North Carolina are required to pay franchise tax in order to operate in the state. Franchise tax is levied on the net worth of your business at different rates depending on its structure:

• C Corporations:For C Corps, this tax is imposed at a rate of $1.50 per $1,000 of your corporation’s tax base and has a minimum tax amount of $200.
• S Corporations:S Corps pay $200 in franchise tax for the first one million dollars of their tax base and $1.50 per $1,000 for the part of their tax base that exceeds this.
• Holding Companies:Franchise tax is imposed in the same way on C Corps and holding companies, except that the latter can only pay up to a maximum of $150,000 in this tax.

You’ll need to submit franchise tax to theNorth Carolina Department of Revenueon an annual basis alongside your corporate income tax return by the 15th day of the fourth month after the end of your tax year.

Note:If your LLC is taxed under the default structure (i.e., as a disregarded entity like a partnership or sole proprietorship), it will not need to file franchise tax.

Privilege License Tax

In North Carolina, businesses and professional services needing a state-issued license to operate are also required to pay a privilege license tax. Your privilege license tax bill will depend on the business type or professional category your LLC falls into, with some of the most common ones, including:

• Lawyers and other professional services
• Dealers of installment plans
• Loan-related services like pawnshops and check-cashing businesses
• Banks
• Newsprint publishers

This tax is charged annually and isn't divided throughout the year. This means that the entire tax amount is due as soon as you start a licensed business activity — regardless of when this is during the fiscal year.

Important:Since there's no online option for filing, paying, or renewing the privilege license, you’ll need to download and use the specificforms and instructionsfor your business category.

Keep in mind that, regardless of where your LLC is registered, you will also be required to pay certain federal taxes. This includes employer taxes, corporate income tax – for LLCs taxed as a C corporation – and income and self-employment taxes (for LLCs taxed as pass-through entities or as an S corporation).

Related Articles

• LLC Cost North Carolina
• North Carolina LLC Taxes
• North Carolina LLC Operating Agreement
• North Carolina LLC Registered Agent
• North Carolina LLC Annual Report
• How to File Articles of Organization in North Carolina
• North Carolina LLC Name Search

North Carolina Business Resources

• North Carolina SOS Corporations Division
• North Carolina LLC Statutes