How To Form an LLC In North Carolina (NC)?

Do you want to learn how to form an LLC in North Carolina? You’ve picked a great location. North Carolina was ranked the top state for business in 2022.

The good news is that it’s pretty straightforward to form a Limited Liability Company in the Tar Heel State. Better still, we detail everything you need to do in this thorough guide. Ready to get your North Carolina LLC off the ground? Then let’s begin!

Start by Picking a Name for Your North Carolina LLC

Choosing a business name is one of the first things you need to do when forming an LLC in North Carolina. You can pick pretty much any name you like, but we recommend choosing one that is easy to spell, pronounce and remember. It’s a good idea if has something to do with your product or service, too. That way, customers know what you do upon hearing your name.

Additionally, be sure that your LLC name complies with the naming rules and guidelines in North Carolina. These include the following:

• Your business name must have either of the following phrases: “L.L.C.,” “LLC,” or “limited liability company.”
• Your LLC name must not include words that may confuse it with any government agency.
• Restricted words, such as University, Trustee, Bank, etc., will need additional paperwork and a licensed professional to be part of your LLC in North Carolina.
• The chosen name for your LLC in North Carolina must be unique and distinguishable from other LLCs in North Carolina.

For a full list of LLC naming requirements and guidelines in North Carolina, you can check the North Carolina Secretary of State website.

Once you’ve got a name in mind, make sure that it isn’t already taken by another business by running an LLC Name Search on the state’s website. If it’s free, then we recommend picking up a suitable .com web domain, too.

Hire a Registered Agent

After choosing a business name, the next step in forming your North Carolina LLC is to appoint a registered agent.

A registered agent receives and forwards government notices and official mail on your LLC’s behalf. A registered agent can be a third-party entity authorized to conduct business in North Carolina or a person residing in this state. The only thing that matters is that your registered agent must maintain a permanent street address in North Carolina (a P.O. box address won’t suffice).

While you can nominate a family member, a friend, an LLC partner, or yourself to serve as the registered agent, that person’s name will appear in public records. They will also be required to be available during all business hours.

That’s why most LLCs in North Carolina prefer hiring a professional registered agent service provider. Here are three of the best best registered agent companies in North Carolina:

Northwest

Northwest is one of the most reputable registered agent companies in North Carolina. For just $125 per year, you get access to a full range of registered agent services, including annual report reminders, pre-filled state forms, document storage, and document scanning. You even get a $25 discount if you hire Northwest to be your registered agent in four or more states.

Northwest has excellent customer support and a broad range of support documentation, including Corporate Guides that cover a range of important business topics.

IncFile

IncFile is our second recommendation for the best registered agent service provider in North Carolina. Their registered agent services include access to a custom dashboard, automatic mail forwarding, and SMS and email alerts.

The platform’s user interface is very intuitive, which makes it easy to see all of the documents they scan and forward on your behalf

Their service is very affordable, too. IncFile charges just $119 annually.

ZenBusiness

Another top registered agent company we highly recommend in North Carolina is ZenBusiness.

This registered agent service provider has helped more than 300,000 businesses remain compliant through its comprehensive registered agent services that include mail forwarding, document scanning, a personalized digital dashboard, and mail notifications.

In addition, ZenBusiness offers a $5K Grant Program that gives struggling entrepreneurs access to funding to establish and grow their businesses.

ZenBusiness charges $199 for its services.

Register Your Business

Once you have a registered agent in place, the next step is to register your business with the North Carolina Secretary of State.

The easiest way to register your North Carolina business is by filing the North Carolina Articles of Organization online through the North Carolina Online Business Formation System. You’ll need to create a business account and pay the $125 filing fee.

Alternatively, you can file your Article of Organization by mail. If you choose this option, you will be required to download fill out the North Carolina Articles of Organization Form. Then, mail the filled form together with a check for $125 to the following address:

North Carolina Secretary of State
Business Registration Division
P.O. Box 29622
Raleigh, NC 27626

The online filing of your North Carolina LLC’s Article of Organization will take 2-5 working days, while mail filing will take 2-3 weeks.

Think About Writing an Operating Agreement

North Carolina does not legally require LLCs to create and formalize an operating agreement. However, we highly recommend drafting one.

You can think of an Operating Agreement as a contract that defines and outlines each LLC member’s roles and responsibilities. It also defines the structure of your LLC — whether it is manager-managed or member-managed — and how profits are split.

You can customize the operating agreement for your North Carolina LLC by including the following information:

•  Loss and profit sharing structure
• The voting rights of each LLC member
• The ownership percentage of each member
• Ownership transfer, buyout, and similar clauses.

Obtain Licenses and Permits

You may need to obtain certain business licenses and permits in the state to legally start operating your business in North Carolina.

While a general business license is optional in the state, you may need other licenses and permits depending on your LLC’s location and the industry in which you operate. We recommend checking with the North Carolina Business Licenses website to understand the permit and licensing requirements for your specific industry.

You must also acquire the relevant professional license if your LLC offers professional services, such as accounting. The North Carolina’s Directory of Occupational Board lists all the professional licenses you may require to run your LLC.

Get a Federal Tax ID

A Federal Tax ID, also known as an Employer Identification Number, is like a Social Security Number for your business.

If you plan to hire employees, your Federal Tax ID will be needed to track your small LLC hiring activities and ensure you comply with payroll laws in North Carolina. You will also need a Federal Tax ID to operate in a federal regulated industry, such as hazardous agriculture and transportation. You will also need a Federal and State Tax ID to open a business bank account and apply for business credit.

Acquiring a Federal and State Tax ID in North Carolina is free and easy. You just need to follow the instructions on the Internal Revenue Service website. After completing the application, your Federal and State Tax ID will be available immediately for use.

Open a Bank Account

While opening a business bank and credit account in North Carolina isn’t mandatory, it can help you greatly in terms of running your LLC and separating your personal and business finances.

There are many benefits that come with opening a business bank for your company. For example, you will have an easier time keeping track of taxes. Additionally, your income and expenses will be more clearly organized.

You will need your Article of Organization and Federal and State Tax to open your business bank and credit account in this state ID.

If you are looking for a local bank to open an account with, one of the following banks may be suitable:

• Peoples Bank
• Fidelity Bank
• Providence Bank

Purchase Business Insurance

In North Carolina, LLC owners are legally required to purchase specific types of business insurance policies to protect their business and employees. The common types of business insurance you may want to consider include the following:

• General liability insurance: This policy safeguards your LLC against claims of property damage or personal injuries that may occur during regular business operations.
• Workers’ compensation insurance: If your North Carolina has one or more employees, you will be legally required to get a workers’ compensation insurance policy. It provides protection against work-related illnesses, injuries, or even death.
• Additional coverage: Depending on the industry and nature of your LLC, you may need additional insurance policies. These may include commercial property insurance (to protect your physical assets), professional liability insurance (for service-based LLCs), and Commercial auto insurance (if you have vehicles for LLC purposes).

Buy an LLC Formation Package to Speed Up the Process

Many companies provide LLC formation packages that streamline and speed up the process of starting your LLC in North Carolina. The good news is that regardless of your budget, you are sure to find a package that suits your needs.

Some LLC formation companies, like ZenBusiness, even offer to form your LLC free of charge. For instance, with their Starter LLC formation package, you only need to pay the state filing fee.

ZenBusiness’ most popular LLC formation package is the Pro package. At only $199, you will get all the starter package features plus worry-free compliance and expedited processing — and your LLC will be formed in just four to six days. You can also purchase their Premium package at $299 if you want more perks and expedited filing times of one to two days.

Another company that has a range of LLC formation packages is LegalZoom. It has three packages: The Basic package (free, excluding the state filing fee), the Pro LLC formation package ($249, excluding the state filing fee), and the Premium LLC formation package ($299, excluding the state filing fee).

FAQs About Forming an LLC in North Carolina

How Long Will It Take to Form My North Carolina LLC?

You can get your North Carolina LLC formed in two to five working days if you file your Article of Organization online or two to three weeks if you file by mail. If you want your LLC in North Carolina formed faster, you can pay for expedited processing.

How Much Does It Cost to Set Up an LLC in North Carolina?

It will cost you $125 to form a domestic LLC in North Carolina or $250 to form a foreign LLC. This is the cost of filing an Article of Organization. You may also spend more on hiring a registered agent, reserving your LLC name, purchasing business insurance policies, etc.

Can I Act as my Own Registered Agent in North Carolina?

Yes. The North Carolina state laws allow entrepreneurs to nominate themselves as registered agents for their LLCs. However, you must be sure to meet the requirements of being a registered agent in North Carolina. For instance, you must be at least 18 years old, be a resident of the state with a permanent street address (not a P.O. box), and be available during normal working hours.

Can I Form a Single-Member LLC in North Carolina?

Yes. North Carolina allows business owners to form single-member LLCs. All you have to do is follow the guidelines, rules, and steps outlined in this article. You can also hire an LLC formation service provider to do all the hard work for you.

Conclusion

Hopefully, you now have all the information you need to form your North Carolina LLC yourself. But if you’re still confused or unsure what to do then fear not. You can purchase an LLC formation package to streamline the process and take all of the hard work out of your hands. You focus on building your business and you let someone else handle the administrative work.

Whichever route you choose to get your North Carolina LLC off the ground, we wish you the best of luck!

Also see:

• North Carolina (NC) Secretary of State (SOS) LLC & Business Search
• North Carolina (NC) Registered Agent Services
• How To Find North Carolina Bookkeepers