How to Form an LLC in North Carolina
Quick Start Guide ← you are here
This Quick Start Guide is a brief overview of how to form an LLC in North Carolina.
North Carolina LLC Costs:
North Carolina LLC filing fee: $125 (one-time fee)
North Carolina LLC annual report fee: $200 per year
Hi there, my name is Matt Horwitz and I’m the founder of LLC University®.
We’ve put together a free guide on how to form an LLC in North Carolina. We hope you find it helpful!
To form a North Carolina LLC, you can either follow the 7 lessons above (which are more detailed and step-by-step), or you can follow our Quick Start Guide below (which is a brief overview of all the steps).
If this is your first time setting up an LLC in North Carolina, I recommend that you follow the more detailed lessons above. Please make sure to follow them in order.
A North Carolina LLC (Limited Liability Company) is a hybrid business entity which encompasses the best features of a Sole Proprietorship, Partnership, and a Corporation. These include:
- Easy management
- Pass-through taxation (no double taxation)
- Personal liability protection
The third feature (personal liability protection) is what makes North Carolina LLCs so popular among business owners and entrepreneurs.
How personal liability protection works:
As a separate legal entity, your North Carolina LLC can be used to run a business or it can be used to hold assets, like real estate, boats, vehicles, and aircraft.
If somebody were to sue your LLC, they can only go after the LLC’s assets. Your personal assets (like your home, cars, and bank account) cannot be used as payment for the lawsuit. The personal liability protection that a North Carolina LLC provides ensures that your personal assets remain out of reach from creditors.
IncFile ($49 + state fee) or LegalZoom ($149 + state fee).
1. North Carolina LLC Name
• The first step to creating your LLC with the North Carolina Secretary of State is to come up with a unique LLC name and make sure it’s available to use.
• Your desired North Carolina LLC name must be “distinguishable upon the records”. Meaning, it must be unique from the names of all the existing businesses registered with the North Carolina Secretary of State.
• North Carolina LLC Name Search:
• LLC Designator: Your LLC must have a proper designator at the end of the name. As per North Carolina LLC law, the acceptable designators are: “LLC”, “L.L.C.”, “Limited Liability Company”, “Limited Liability Co.”, “Ltd. Liability Company” or “Ltd. Liability Co.”.
Quick Tip: If you’re not sure which designator to use, “LLC” is the most common.
• Your North Carolina LLC name cannot include a designator from a different type of legal entity. For example, your LLC name cannot include the words or abbreviations Corporation, Corp., Inc., Incorporated, Limited Partnership, LP, L.P., or Trust.
2. North Carolina Registered Agent
• In order to do business in the state, your LLC must maintain a North Carolina Registered Agent at all times.
• A North Carolina Registered Agent is a person or company who accepts legal mail and paperwork addressed to your North Carolina LLC. This paperwork includes notice of lawsuits, court hearings, and subpoenas. Together, this type of legal mail is known as Service of Process.
• Not maintaining a North Carolina Registered Agent can be grounds for the Secretary of State to administratively dissolve your LLC. This means you won’t be able to do business in the state any longer.
• Your North Carolina LLC’s Registered Agent must have a street address located within the state. PO Boxes are not allowed to be used.
• If your LLC’s Registered Agent will be an individual person, then he/she must also be at least 18 years of age and be a resident of North Carolina. If you, a friend, or family member meet these requirements, then you/they can be your North Carolina LLC’s Registered Agent.
• Alternatively, you can hire the services of a professional Registered Agent, technically known as a Commercial Registered Agent in North Carolina.
• A Commercial Registered Agent is a private company that you pay on an annual basis. They fulfill the North Carolina state requirement of maintaining a Registered Agent, as well as additional benefits, such as privacy (keeping your address off public records), emailing you about Annual Report reminders, and discarding your junk mail.
IncFile is a bit cheaper, but their customer support is not as good as Northwest Registered Agent.
• Important: If you would like to keep your address off the public records, then we recommend Northwest Registered Agent. They’ll let you use their address not only in the Registered Agent section of your filing, but you can also use their address for your Principal Office Address and in the signature section as well. No other Registered Agent company will allow you to do this without charging extra. Northwest Registered Agent offers this at no additional charge.
3. North Carolina LLC Articles of Organization & Cover Sheet
• North Carolina LLC filing form:
– Go to: https://www.sosnc.gov/forms
– Choose “Business Registration” from the “Within the Department” drop down menu.
– Choose “Limited Liability Company” in the second drop down menu.
– The Articles of Organization (L-01) will appear at the very top of the section. Click on the hyperlink to download a copy in PDF format.
• Cover Sheet form:
– Go to: https://www.sosnc.gov/forms
– Choose “Business Registration” from the “Within the Department” drop down menu.
– Make sure “Business Entities Common” appears in the the second drop down menu (it will show up by default).
– The Cover Sheet for Corporate Filings will appear at the very top of the section. Click on the hyperlink to download a copy in PDF format.
• North Carolina LLC filing fee: $125 (one-time filing fee)
• Methods of filing: You can file an LLC in North Carolina online or by mail.
Either way, you must first complete the paper forms: the Articles of Organization and the Cover Sheet, and then you can upload them online or send to the state by mail.
• North Carolina LLC approval times:
– Your North Carolina LLC will be approved in 3 – 5 business days if you file online.
– Your North Carolina LLC will be approved in 4 – 6 business days if you file by mail.
• File your North Carolina LLC online: Go to the North Carolina Secretary of State’s website, create an online account, then look in the left navigation under “Online Services”. Click “Create a Business Online”, then follow the online instructions. Submit payment with a debit or credit card.
• File your North Carolina LLC by mail: Prepare a check or money order for $125 and make it payable to the “Secretary of State”. Then mail your completed Articles of Organization, the Cover Sheet, and filing fee to:
North Carolina Secretary of State
PO Box 29622
Raleigh, NC 27626-0622
• North Carolina LLC approval: If you file your North Carolina LLC online, the approval documents listed below will be returned by email. If you file by mail, they’ll be returned by regular mail. After the Secretary of State approves your LLC, you’ll receive back the following:
– Stamped and approved copy of your Articles of Organization
– Cover Letter acknowledging the successful formation of your LLC
Hire a professional to form your LLC in North Carolina:
IncFile ($49 + state fee) or LegalZoom ($149 + state fee)
• North Carolina LLC Articles of Organization statute: G.S. 57D-2-21
4. North Carolina LLC Operating Agreement
• If the Articles of Organization is the document that forms your LLC, then the Operating Agreement is the document that governs it.
• Unlike the Articles of Organization, you don’t need to file your Operating Agreement with the North Carolina Secretary of State (or with any other agency for that matter). The Operating Agreement is an “internal document”, meaning you just a copy with your LLC/business records.
• What does an Operating Agreement usually contain? Names of the owners (called members), how much of the LLC each member owns, how the LLC is managed, how the business is run, the duties and responsibilities of the owners, managers, and officers, how taxes are paid, and how profits are distributed.
Note: Operating Agreements are not limited in nature. If necessary, you can add any additional provisions or sections.
• Why having an Operating Agreement is important? It provides a written document for how to handle disputes and arguments among the members. It spells out the “bylaws” of how to run your North Carolina LLC. Having an Operating Agreement can also help maintain your personal liability protection (it’s very important to have if you ever end up in court).
• Single-member LLC & Multi-member LLCs: regardless if your LLC has one member or several members, it’s always a good idea to have an Operating Agreement for your North Carolina LLC LLC.
• Free North Carolina LLC Operating Agreement: You can download a free North Carolina Operating Agreement in one of the following 3 formats:
PDF, Google Doc, or Microsoft Word
(Just choose your preference. They are all the same form.)
5. Federal Tax ID Number (EIN)
• After the North Carolina Secretary of State approves your LLC filing, then you can obtain a Federal Tax ID Number from the IRS.
• A Federal Tax ID Number is your North Carolina LLC’s “social security number”. It is used by the IRS to identify your LLC for taxation and reporting purposes.
• A Federal Tax ID Number is also called an Employer Identification Number (EIN), Federal Tax ID Number, and Federal Employer Identification Number (FEIN). They are all referring to the same thing though.
• Why do you need an EIN? Your LLC will need a Federal Tax ID Number to open a business bank account, register for business licenses and permits, and to transact business with other companies..
• When to apply: Do not apply for your Federal Tax ID Number until your LLC is approved by the North Carolina Secretary of State. If your LLC filing is rejected for some reason, you will be attaching the Federal Tax ID Number to a non-existent LLC.
• EINs are free: Federal Tax ID Numbers (EINs) are free. The IRS does not charge anything (although some sites in the industry may lead you to believe otherwise).
• Apply for an EIN: You can apply for Federal Tax ID Number in one of three ways. You can apply online (takes 10-15 minutes to get your EIN), by fax (takes 4 business days to get your EIN), or by mail (takes 4-6 weeks to get your EIN).
• Online EIN application: This is the recommended method since it’s very quick to complete the EIN application (takes 10 to 15 minutes), and at the end of the application the IRS will provide you with a PDF document with your EIN to print and save. You can only use the EIN online application if you have an SSN or ITIN. Your LLC must also be owned by an individual, or individuals, (not another company) in order to apply online.
• Apply by fax or mail: Those without ITINs or SSNs, or whose LLCs are owned by another company, can still apply for a Federal Tax ID Number, not just through the online application. Instead, download Form SS-4 (fill it out and sign it), then send to the IRS by fax or regular mail:
IRS Fax number: 855-641-6935
IRS Mailing address: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
• Foreigners: On line 7b, just write “Foreign” if you don’t have an SSN or ITIN.
6. North Carolina LLC Annual Report
• All LLCs in North Carolina must file an Annual Report every year in order to remain in good standing with the state.
• The first Annual Report is due by April 15th of the year following your LLC’s year of formation. For example, if your North Carolina LLC was formed on November 15th 2017, your first Annual Report will be due by April 15th 2018. Then it will be due by April 15th 2019, and so on.
• North Carolina LLC Annual Report Fee: $200 per year.
• Annual Report approval times:
– Your LLC’s Annual Report will be approved in 3 – 5 business days if you file online.
– Your LLC’s Annual Report will be approved in 4 – 6 business days if you file by mail.
• Recommendation: We recommend the online filing as it’s easier to complete. However, if you’re not very tech-comfortable, then we recommend filing by mail.
• How to file your North Carolina Annual Report online:
– Search for your North Carolina LLC on the state’s website, then look to the right of your LLC name. Click the “File Report” link. Complete the online filing and then pay online with a debit or credit card.
• How to file your North Carolina Annual Report by mail:
– Search for your North Carolina LLC on the state’s website, click on your LLC name, then click the link at the top titled “Print a Pre-Populated Annual Report form”.
– Complete the form, sign it, and mail to the North Carolina Secretary of State’s office with your Annual Report filing fee. Pay by check or money order and make it payable to “Secretary of State”.
– Send your completed Annual Report and filing fee to:
North Carolina Secretary of State
PO Box 29525
Raleigh, NC 27626-0525
• Penalty: if you do not submit your North Carolina LLC Annual Report within 60 days of the due date, then your LLC may be administratively dissolved and shut down by the state.
• What you’ll get back: Once the North Carolina Secretary of State’s office is finished processing your LLC’s Annual Report filing, you will get back the following 2 items:
– Copy of the filed Annual Report
– Cover Letter acknowledging your successful filing
The above items will returned by email if you file online. Or they’ll be returned by regular mail if you file by mail.
• North Carolina Annual Report statute: G.S. 57D-2-24
7. Business Licenses and/or Permits
• Your LLC must have the necessary business licenses and/or permits in order to do business in North Carolina.
• The specific type of license and/or permits your North Carolina LLC may need depends on its location and what industry it is involved in.
• Contact your local county officials (http://www.ncacc.org/171/Links-to-Counties) and North Carolina’s state agencies (https://www.nc.gov/agencies) to determine the specific business licenses and/or permits your LLC will need.
• If your LLC will render professional services (medicine, accounting, law, etc.), you must also obtain a license from the relevant regulatory board. NC Careers keeps a comprehensive directory of professional licenses available in the state: http://nccareers.org/occlicenses/
• One-on-one business consultation: Business Link North Carolina (BLNC) is a free service to help you determine what kind of business licenses and/or permits your LLC may need. You can get in touch with one of their business counselors here: https://edpnc.com/start-or-grow-a-business/start-a-business.
• Need to save time? If you’d rather not do the research to determine your North Carolina business license and permit requirements, we recommend hiring IncFile. They’ll take care of everything for $99.
8. North Carolina LLC Taxes
• Federal taxes: By default, LLCs have “pass through” taxation in North Carolina and the rest of the U.S. states. Any income generated or losses incurred by your LLC are not taxed separately (federally). Instead, they are usually listed on a Schedule C (or a different Schedule depending on how you derive your income) and filed with the IRS together with your personal 1040 tax return.
• North Carolina State and local taxes: You have to register with the North Carolina Department of Revenue and with the municipality (county, city, town, etc.) where your LLC is located for taxation purposes.
• North Carolina imposes the following taxes: alcoholic beverages, certain machinery and equipment tax (1% Privilege Tax), corporate income tax, corporate franchise tax, dry cleaning solvent tax, estate tax, estates and trusts (fiduciary), individual income tax, insurance premium tax, International Fuel Tax Agreement (IFTA) tax, motor fuels tax, motor vehicle lease and rental tax, partnerships, privilege license tax, property tax, sales and use tax, scrap tire disposal tax, severance tax (effective July 1, 2015), solid waste disposal tax, tobacco products, unauthorized substance tax, white goods disposal tax, withholding tax, and more.
• Recommendation: Determining your tax obligations yourself can be challenging. We recommend you get help from an accountant in North Carolina after your LLC is formed. Check out our how to find an accountant guide.
9. North Carolina LLC Bank Account
• After getting your LLC’s Federal Tax ID Number, you can now open a separate bank account for your LLC in North Carolina.
• Separating assets: Not only does having a business bank account and a personal bank account make your accounting life much easier, it also helps protect your personal assets. Giving your LLC a separate checking account helps avoid commingling personal assets and business (one of the common reasons an LLC can lose its liability protection).
• Items needed to open account: North Carolina LLC Articles of Organization (stamped and approved ), Federal Tax ID Number (also called EIN), and usually two forms of ID, such as a driver’s license and a passport. We recommend calling a few banks ahead of time though, as some banks may ask for additional documentation, such as your LLC’s Operating Agreement.
• If you LLC has multiple members, then all the members should be present when opening the bank account. If you need to add a member at a later date, you’ll need to speak to your specific branch location regarding the procedure, as each bank operates differently.
• LLC banking fees: We recommend calling a handful of banks in North Carolina close to where you do business. Ask them about their “simplest form of business checking account” and ask what the monthly maintenance fees are. A lot of banks in North Carolina charge monthly fees, but about 25% or so do not. We recommend speaking to about 5-6 banks in order to find free business checking.
• The bank teller who helps you to open the LLC checking account will either issue each signer a debit card right on the spot, or they’ll mail them out about a week later.
• If you’d also like to accrue rewards such as travel points and cashback for your business, then we recommend applying for a business credit card or two. You can browse business credit cards on www.creditcards.com
10. Business Phone Number
Instead of using your home telephone number or your cell phone, you can purchase an affordable “virtual business number” specifically for your North Carolina LLC. You can set this virtual business phone up to forward to your cell phone, go through voice prompts, or configure it any way you’d like.
We recommend using Phone.com as they have the cheapest plans and their customer service is excellent.
They offer local phone numbers as well as 1-800 toll-free numbers. You can easily setup call forwarding, pre-recorded prompts, and get voicemail messages forwarded to your email.
Getting a separate business phone number for your North Carolina LLC is also a good idea in order to keep your actual number private from those pesky “public record” websites.
North Carolina State Agencies
North Carolina Secretary of State
Hours: 8am – 5pm, Monday through Friday (Eastern)