How to Start an LLC in NC (2022 Guide)

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Starting an LLC in NC

How to start an LLCA North Carolina Limited Liability Company (LLC) is a business structure used to protect your personal assets (home, car, bank account) if your business is sued.

You can start an LLC to operate a business, or you can form an LLC to hold assets (such as real estate, vehicles, boats, or aircraft).

There are several steps to starting a Limited Liability Company in North Carolina. We’ll give you the overview in this article. Then when you’re ready to start your LLC, we’ll walk you through the process step-by-step in our free guides.

Need to save time? Hire a company to form your LLC:
Northwest ($39 + state fee) or LegalZoom ($149 + state fee)

(check out Northwest vs LegalZoom)

1. North Carolina LLC Name

LLC namesThe first step to creating your LLC with the NC Secretary of State is to come up with a unique North Carolina LLC name and make sure it’s available to use.

Your Limited Liability Company name must be unique and distinguishable when compared to all the existing businesses registered in North Carolina.

Use the North Carolina Business Entity Search to check whether your business name is already being used by another business registered with the NC Secretary of State Business Registration Division.

Limited Liability Company 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 (most common)
  • L.L.C.
  • Limited Liability Company
  • Limited Liability Co.
  • Ltd. Liability Company
  • Ltd. Liability Co.

Your North Carolina LLC name cannot include a designator from a different type of business structure.

For example, your LLC name cannot include the words or abbreviations:

  • Corporation
  • Corp.
  • Inc.
  • Incorporated
  • Limited Partnership
  • LP
  • L.P.
  • Trust

2. North Carolina Registered Agent

Registered AgentThe NC Secretary of State requires you to list a Registered Agent on your LLC’s Articles of Organization and then maintain one as long as your LLC operates.

A North Carolina Registered Agent is an individual or business entity who accepts legal documents (called “Service of Process”) that are addressed to your LLC. This includes notice of lawsuits, court hearings, and subpoenas.

If you don’t maintain a Registered Agent, the Secretary of State can administratively dissolve your LLC. This means you won’t be able to do business in the state any longer and another business entity can take your business name.

You have three options for who can be your Registered Agent in North Carolina.

  1. You can be your own Registered Agent in North Carolina
  2. You can ask a friend or family member to be your LLC’s Registered Agent.
  3. You can hire a North Carolina Registered Agent Service. This is your only option if you don’t have an address in North Carolina (or a friend who does).

If your Registered Agent is going to be an individual (you, a friend, or a family member), that individual needs to:

  • have a street address in the state
  • be a North Carolina resident
  • be at least 18 years old
  • be available during normal business hours

This ensures that the courts and legal system can “serve” someone if needed.

LLCU Recommendation: If you need to hire a North Carolina Registered Agent Service, we recommend Northwest Registered Agent ($125 per year).

Northwest has been in the business for over 20 years and they have great customer support. Any mail that is sent to your LLC will be scanned and uploaded to your online account. And if you would like to hire a professional service to file your LLC formation paperwork, Northwest can also be your LLC formation service.

Special offer: If you hire Northwest to form your LLC ($39 + state fee), they’ll include their Registered Agent service free for the 1st year.

(Check out our Northwest Registered Agent review to learn more)

3. LLC Articles of Organization & Cover Sheet

Articles of OrganizationThe North Carolina Articles of Organization is the form you’ll file to create your LLC in North Carolina. You must also file the accompanying Cover Sheet.

North Carolina LLC filing form:

  • Go to: North Carolina Secretary of State: 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 towards the top. Click on the hyperlink to download a PDF copy.

Cover Sheet form:

  • Go to: North Carolina Secretary of State: Forms
  • Choose “Business Registration” from the “Within the Department” drop down menu.
  • Make sure “Business Entities Common” appears in the second drop down menu.
  • The Cover Sheet for Corporate Filings will appear towards the top. Click on the hyperlink to download a PDF copy.

Note: If you don’t see all the items in the “For which forms” drop down menu, change the first drop down to something else, and then change it back to “Business Registration“.

North Carolina LLC filing fee: $125 (one-time filing fee)

Check out LLC Cost in North Carolina to learn more about LLC fees.

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). Then you can upload them online or send them to the state by mail.

File your North Carolina LLC online

  • Go to the NC Secretary of State’s Online Services Sign-In page
  • Create an online account
  • Look in the left navigation under “Online Services”
  • Click “Create a Business Online” and 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 the $125 filing fee.
  • Make it payable to the “Secretary of State”
  • 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 times

  • If you file online, your North Carolina LLC will be approved in 7 – 10 business days.
  • If you file by mail, your North Carolina LLC will be approved in 10 – 15 business days.

Note: Filing times may take longer due to the current global situation and government delays. Please see how long does it take to get an LLC in North Carolina.

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

Need to save time? Hire a company to form your LLC:
Northwest ($39 + state fee) or LegalZoom ($149 + state fee)

(check out Northwest vs LegalZoom)

4. LLC Operating Agreement

Operating AgreementIf the North Carolina LLC Articles of Organization is the document that forms your Limited Liability Company, then the Operating Agreement is the document that governs it.

An Operating Agreement is where you will list the LLC owners (called LLC Members), as well as how much of the business they own. An Operating Agreement will also spell out how the LLC is taxed, how the business is managed, and how profits are split.

Said another way, Operating Agreements are written documents for how to handle disputes and arguments among the Members. They spell out the “bylaws” of how to run your LLC. Operating Agreements can also help maintain your personal liability protection.

Internal Document

Unlike the Articles of Organization, you don’t need to file your Operating Agreement with the North Carolina Secretary of State, IRS, or any other agency.

Operating Agreements are “internal legal documents”, meaning you just keep a copy with your business records and make sure all Members have a copy as well.

Single-Member LLC & Multi-Member LLCs

Regardless of whether you are your LLC’s only Member or if your LLC has more than one Member, it is best practice to have an Operating Agreement on file. This helps keep your assets protected in the event of a lawsuit. And it helps show that you are running the LLC properly.

North Carolina LLC Operating Agreement template: We provide free Operating Agreement templates that you can download here: North Carolina LLC Operating Agreement

5. Federal Tax ID Number (EIN)

EIN Number for an LLCAfter the Secretary of State approves your LLC filing, then you can get a North Carolina EIN Number from the Internal Revenue Service (IRS).

A Federal Tax ID Number is your 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:

  • Employer Identification Number (EIN)
  • Federal Tax Identification Number
  • Federal Employer Identification Number (FEIN)

Why do you need an EIN? Your LLC will need an EIN Number to open an LLC bank account, register for business licenses and permits, and to transact business with other companies.

When to apply: Don’t apply for your EIN Number until your LLC in North Carolina is approved by the Secretary of State. If your LLC filing is rejected for some reason, you will be attaching the Federal Tax ID Number to an LLC that doesn’t exist.

EINs are free ($0): The IRS does not charge anything for an EIN (although some sites in the industry may lead you to believe otherwise). You can easily apply for an EIN yourself online.

How to apply for a North Carolina LLC EIN Number

There are 3 ways to obtain a Federal Tax ID Number (EIN) from the IRS.

  1. Apply online (recommended method) – approved immediately
  2. Mail Form SS-4 – approved in 4 weeks
  3. Fax Form SS-4 – approved in 4 business days

Important: You can only apply for an EIN online if you have an SSN or ITIN.

Non-US Resident: Don’t worry if you don’t have an SSN or ITIN. You can still get an EIN from the IRS. You just can’t apply online. Instead, you’ll need to fax Form SS-4 to the IRS. And we have instructions on this page: EIN without SSN.

6. LLC Annual Report

LLC Annual ReportAll North Carolina LLCs must file a North Carolina LLC Annual Report every year in order to remain in good standing with the state.

The first one is due by April 15th of the year following the year your LLC is formed.

For example, if your North Carolina LLC was formed on November 15th 2022, your first Annual Report will be due by April 15th 2023. Then it will be due by April 15th 2024, and so on.

North Carolina LLC Annual Report Filing Fee: $200 per year

LLC University® 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 online:

  • Find your LLC name using the NC Secretary of State Business Search, then look to the right of your business name.
  • Click the “file Annual Report” button.
  • Complete the online filing and then pay online with a debit or credit card.

How to file by mail:

  • Search for your LLC using the North Carolina Secretary of State’s Business Search.
  • Click on your LLC name, then click the link at the top titled “Print a Pre-Populated Annual Report form“.
  • Complete the form and sign it.
  • Pay by check or money order made payable to “Secretary of State”.
  • Send your completed paperwork and filing fee to:

North Carolina Secretary of State
PO Box 29525
Raleigh, NC 27626-0525

How will I know my Annual Report is approved?

Once the North Carolina Secretary of State’s office is finished processing your LLC’s filing, you will get back the following items:

  • Copy of the filed Annual Report
  • Cover Letter acknowledging your successful filing

The above items will be returned by email if you file online. Or they’ll be returned by regular mail if you file by mail.

Is there a penalty for late filings?

If you don’t submit your Annual Report within 60 days of the due date, then your LLC may be administratively dissolved and shut down by the North Carolina Secretary of State.

7. Business Licenses and/or Permits

Business LicenseYour LLC must have the necessary North Carolina business licenses and/or permits in order to do business in North Carolina.

The specific type of license and/or permits your business may need depends on its location and what industry it is involved in.

Contact your local county officials, and North Carolina’s state agencies to determine the specific licenses and/or permits your LLC will need.

If your LLC will offer a professional service (medicine, accounting, law, etc.), you must also get a license from the relevant regulatory board. NC Careers keeps a comprehensive directory of professional licenses available in the state: NC Business and Occupational License Database

Free one-on-one business consultation: Business Link North Carolina (BLNC) is a free service to help you determine what kind of licenses and/or permits your LLC may need.

Need to save time?
If you don’t want to make phone calls and determine your licensing requirements yourself, we recommend using IncFile.

8. Federal and State Taxes

LLC TaxesEvery LLC in North Carolina has a unique tax situation depending on business activity and operations, but we can provide an overview of the requirements for North Carolina LLC Taxes.

Federal taxes

By default, LLCs have pass-through taxation. Any income generated or losses incurred by your Limited Liability Company are not taxed separately.

Instead, they are usually filed with your personal tax returns by listing it on a Schedule C (or a different Schedule depending on how you derive your income).

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 tax purposes.

You may also need to register for sales tax at the local level.

LLCU Recommendation: Determining your federal, state, and local taxes can be challenging. And if done improperly, it can negatively affect your LLC. So we recommend speaking with a few accountants after you form your LLC in North Carolina.

Check out our guide on how to find an accountant, or you can do a search using Thumbtack.

9. LLC Bank Account

After getting your LLC’s EIN number, you can open a separate bank account for your LLC in North Carolina.

Why should I get an LLC bank account?

Having an LLC bank account and a personal bank account makes your accounting life much easier. It also helps protect your assets in case your LLC gets sued.

One of the common reasons a Limited Liability Company can lose its liability protection is through mixing personal accounts with business accounts. This is called “commingling of assets”.

Getting a separate checking account for your LLC helps prevent your business assets from mixing with your personal ones. Said another way, a separate checking account helps your LLC keep its liability protection by preventing the commingling of your personal and business assets.

Debit card: The bank will give you a debit card when you open the account.

Credit card: You can also get a business credit card to earn points, miles, and other rewards.

What do I need to get a business bank account?

You will need the following items needed to open a bank account for your LLC:

  • Stamped and approved copy of your Articles of Organization
  • Federal Tax ID Number (EIN)
  • Form of ID (driver’s license, passport, etc.)

Banks may require other documents before you can open an account, but usually the items listed above are enough. Just to be safe though, we recommend calling the bank ahead of time to double-check.

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.

North Carolina State Agencies

North Carolina Secretary of State

North Carolina Secretary of State: Business Registration Division
Phone: 919-814-5400
Hours: 8am – 5pm, Monday through Friday (Eastern)

North Carolina Department of Revenue

North Carolina Department of Revenue
Phone: 877-252-3052
Hours: 8am – 5pm, Monday through Friday (Eastern)

How to Get an LLC in North Carolina FAQs

LLC CostIt costs $125 to start an LLC in North Carolina. This is the filing fee paid to the North Carolina Secretary of State for submitting your LLC Articles of Organization.

That said, you may also need to pay for municipal or industry-specific licenses and permits, or get a state-level sales tax permit. The costs of business licenses vary widely by municipality. Reach out to your local municipality if you have questions about your LLC’s unique needs.

Other items you’ll need – like an EIN for your LLC – are free.

LLC Ongoing Costs

LLCs also have ongoing costs, like the Annual Report. Starting the year after you form your LLC, you must submit this annual paperwork to keep your LLC’s information up-to-date with the state. It costs $200 to file this form each year.

Depending on your LLC’s specific business industry, location, and activities, you may also need to pay annual fees for licenses or permits. Your local municipality should be able to answer questions about any renewal fees when you request any initial licenses.

Taxes

We also recommend hiring an accountant to handle your LLC’s business tax accounts and bookkeeping.

Tip: You can write off the cost of an accountant for business tax preparation on your taxes.

Foreign LLC

If you have an LLC formed in another state, but you want to conduct business in North Carolina, you’ll need to register that out-of-state LLC in NC and pay the associated filing fee. This is known as a Foreign LLC registration.

You can find Foreign LLC fees on this page: Foreign LLC fees by state.

How long it takes to get an LLC in NC depends on how you submit your North Carolina Articles of Organization to the NC Secretary of State.

If you submit the form online, it will be approved in 7-10 business days. And you can download your documents as soon as your filing is approved.

If you submit the form by mail, it will take 10-15 business days for the state to process your filing. So it will be about 3-4 weeks total before you receive the approval documents back in the mail.

There are 2 main benefits of having an LLC in North Carolina: personal asset protection and LLC pass-through taxation.

The first benefit is protecting your assets. Meaning, if your business is sued, your personal assets – like your home, cars, and bank accounts – are protected.

This protection applies to all LLC owners (called LLC Members). It doesn’t matter if you have a Single-Member LLC or Multi-Member LLC. All of the LLC Members are protected from the business’s debts and liabilities.

This type of protection wouldn’t apply if you operate as a Sole Proprietorship or Partnership.

With an informal business structure (like a Sole Proprietorship or Partnership), the business owner isn’t protected in the event of a lawsuit. For that reason, an LLC as a business entity is a much more common business structure than a Sole Proprietorship or Partnership.

Another benefit is LLC pass-through taxation.

Yes. As per North Carolina law, you can be your own Registered Agent in NC if you are a resident of the state and you have a physical street address.

You can learn how to form a North Carolina LLC yourself by following the instructions in our North Carolina LLC Articles of Organization guide. We break down the entire process for you, step-by-step.

Matt Horwitz
Matt Horwitz
Founder & Educator, LLC University®
Matt Horwitz has been the leading expert on LLC education for the past decade. He founded LLC University in 2010 after realizing people needed simple and actionable instructions to start an LLC that other companies weren't offering. He's cited by Entrepreneur Magazine, Yahoo Finance, and the US Chamber of Commerce, and was featured by CNBC and InventRight.
 
Matt holds a Bachelor's Degree in business from Drexel University with a concentration in business law. He performs extensive research and analysis to convert state laws into simple instructions anyone can follow to form their LLC - all for free! Read more about Matt Horwitz and LLC University.

NORTH CAROLINA LLC GUIDE

Follow the lessons below to form your North Carolina LLC.

Overview| LLC Costs

  1. Name Search
  2. Registered Agent
  3. Articles of Organization
  4. Operating Agreement
  5. EIN Number
  6. Annual Report
  7. Taxes

41 comments on “North Carolina LLC”

Disclaimer: Nothing on this page shall be interpreted as legal or tax advice. Rules and regulations vary by location. They also change over time and are specific to your situation. Furthermore, this comment section is provided so people can share their thoughts and experience. Please consult a licensed professional if you have legal or tax questions.

  1. If I want to use the name for a LLC in North Carolina that has been used previously by another person and is now listed as dissolved, how long do I have to wait?

    Reply
    • Hey Brian, apologies for the slow reply. I’m not in front of our all our NC data on the moment, but if you call the state tomorrow (919-807-2225) they’ll tell you how long. Their hours are hours are 8am – 5pm. Hope that helps!

      Reply
    • Hi Mandy, I am not 100% certain on this one. Can you please call the NC Secretary of State (919-807-2225, 8am – 5pm) to check. I’d be curious to hear what you find out!

      Reply
  2. How can I turn my current LLC into S-Corp are Corporation ? If I was looking to incorporate another business into my current LLC ? Do I merger them together ? Are do I just file a new LLC with NC ? Thanks

    Reply
    • Hi Anthony, an “LLC to C-Corporation” would be a conversion. An “LLC to S-Corporation” can either be a conversion (form a C-Corporation then elect subchapter S taxation with the IRS), or you can file Form 2553 with the IRS and have the LLC be taxed as an S-Corporation. A lot of people want to form a company under another company (ex: LLC ABC owns LLC XYZ) without a whole lot of reason. Unless your accountant and/or attorney has advised this strategy, it’s simplest to form a new LLC with you as the owner. Having said that, there are a lot of ways to go about this. Hope that helps. Let me know if you need more info.

      Reply
  3. Hi Matt, on the new cover sheet for NC at the bottom it ask for the business entity and type of document, do I need to fill this part out, if so what would I put? I would greatly appreciate your assistance.

    Thanks

    Reply
    • Hey Natasha, to the right of “Name of Entity”, enter your LLC name. To the right of “Type of Document”, enter “L-01, Articles of Organization”. Hope that helps!

      Reply
  4. Hey Matt,
    The ONLY way I got through starting an LLC was through your youtube videos. They were GREAT!
    question…now that I have my LLC registered, is there a check list of everything that needs to be filed? Taxes, employer taxes (I am self employed but still confused). just want to make sure I don’t miss anything. suggestions of where I might find a checklist?

    Thanks

    Reply
    • Hey Stephanie, AWESOME to hear! Make sure you go over the NC LLC Annual Report lesson so you’re aware of that requirement. Regarding taxes, there is variance among business owners, so instead of a checklist, we recommend that you speak with an account or two regarding the specifics to your situation. Hope that helps!

      Reply
  5. Matt,

    Thanks a lot for putting all together. It gave me clear understanding of everything, This is great resource for LLC.

    Reply
  6. I am creating several websites for several eCommerce shops that will sell physical products in different niches.
    Please, how do I form an LLC to take care of these several shops (about 4 shops)?
    Since the shops belong to the same person does it make sense to register an LLC for each shop or can I register an LLC and have the 4 shops under it? How do I go about bringing 4 shops under one LLC company?
    Thanks for any help you can give.

    Reply
    • Hey Chux, after you form the LLC, make sure the domain ownership and website hosting information is updated to reflect the LLC name. You’ll also want to sign a bill of sale and sell the domain + website from yourself to the LLC. Going forward, operate the business and register things under the LLC name… not your personal name. Hope that helps.

      Reply
  7. Matt,

    I’ve looked over the information for North Carolina and am still confunsed. Does North Carolina require all members be listed on the Articles of Organization filed with the Sec of State? Thanks

    Brandon

    Reply
    • Hi Brandon, no, LLC Members are not required to be listed in the North Carolina Articles of Organization. Hope that helps.

      Reply
  8. I am so excited! Mailing my information to create my real estate LLC. No longer will I be liable hahah

    Reply
    • Awesome man! Congratulations :) And best wishes with the business!

      Reply
  9. Thanks man and that answer was a big help and saved me some money.

    Reply
  10. My husband is looking to get a LLC for himself as a driver with a pharmaceutical company and to sell food? He currently drives under someone else’s LLC as an employee and was adviced to get his own LLC. He also cooks for someone else at festivals and was also advices to get his own LLC. We just need to know does this warrant for two separate LLCs or could one be used?

    Reply
    • Hi Shada, you could form 2 different LLCs, but you don’t have to. You can run multiple business activities under one LLC. Hope that helps.

      Reply
  11. Hi Matt,
    Can you explain further how to run multiple businesses under one LLC.
    How do you provide proof legally to your bank and online payment gateways that all the businesses are one and the same LLC?
    Thanks for your help.
    Christian

    Reply
    • Hey Christian, if you’re running multiple different business activities under one LLC (as opposed to a different LLC for each business), then it’s easier to think of it just like this: “multiple business activities” under one LLC, not “multiple businesses” under one LLC. So in that case, you’re just opening a bank account for your LLC as well as using the LLC name when registering/setting up your payment gateways. Hope that helps!

      Reply
  12. Hi Matt,

    I just received my bartending certification and am in the process of getting an LLC in order to bartend at private events. First question I have is is an LLC the right move for establishing myself as a brand/business. Second, is it possible to add my business under a trust to ensure business expenses can be written off?

    Reply
    • Hi Candice, you don’t have to form an LLC for your business, but you certainly can. You could also operate as a Sole Proprietorship. We have details on the differences here: LLC vs Sole Proprietorship. While yes, you can make your Trust the owner of an LLC, you don’t have to do so in order to write off business expenses. You can write of business expenses as a Sole Proprietor, the owner of your LLC, and if your Trust owns the LLC. Hope that helps!

      Reply
  13. Im buying a rental property in Florida and I live in NC, does my LLC have to be in the same state as the business? Or can it be in the state I live in?

    Reply
    • Hi Nancy, you’re supposed to form the LLC in the state where the property is located, since this is where you’re doing business. If you purchased the FL property with a North Carolina LLC, you may need to register your North Carolina LLC as a Foreign LLC in Florida. Hope that helps.

      Reply
  14. how to form husband and wife LL C in north Carolina? single ll c member or partnership?
    how they taxed? husband and wife they used to file tax jointly
    what to elect s corp or c corp?

    Reply
  15. HI Matt – Considering forming an LLC to make my next home purchase under (and then subsequent land investments). I haven’t made the purchases yet. Two questions: 1) will banks expect mortgage payments to be made from an account in the LLC name (which means transferring funds monthly from personal checking to the business) or can I pay them from my personal account? and 2) does insurance for the home need to be in the LLC’s name?

    Reply
    • Hi Zinzi, generally speaking, most banks don’t care where funds come from. However, you’ll certainly want to confirm this with your bank. The insurance policy should be in the name of the LLC.

      Reply
  16. Hi Matt,
    Thank you for providing this valuable resource.
    As we all know LLC is an asset protection when something happens related to the business. For example if something happens in your real estate owned by an LLC, your personal assets are not in danger. But now if something happens to you, they can come after your belongings managed by LLC. Would you please elaborate on that and explain how we can mitigate the risk? Can a commercial Registered agent in NC hide your name and your belongings (LLCs)? or we need to use land trust and anonymous LLC?

    Reply
    • Hi Al, you’re very welcome. What you’re referring to is whether or not a charging order is the exclusive remedy of a judgement creditor in North Carolina and whether or not LLC foreclose is expressly precluded (not allowed). While the first is true in North Carolina (exclusive remedy), the relevant statue (North Carolina General Statute, Section 57D-5-03, see d), is “silent” in regards to foreclosure being expressly precluded. However, most asset protection attorneys would still consider the North Carolina law pretty strong when compared to other states.

      But charging orders and foreclose rules go far beyond the statute. You must look at the case law (or better yet, hire an attorney to do so). It also depends on if the North Carolina LLC as a Single-Member LLC or Multi-Member LLC. The North Carolina Statute is silent as to whether or not charging order protection applies to a Single-Member LLC (so you need to look to case law). Charging order protection comes from Partnership law. And some courts can interpret the charging order protection to not be relevant in a Single-Member LLC (since there are no other members to protect). It really does get into the nitty-gritty details. This reply isn’t meant as an answer, but rather, I wanted to paint some context on what to look out for. Also, this is assuming you reside in North Carolina. Charging order protection and LLC foreclosure laws most often apply to where the owner resides and not where the LLC is formed.

      And while a Commercial Registered Agent may keep your name and address off of the North Carolina LLC Articles of Organization (at least for the Registered Agent section)… and even if you fully anonymized the LLC’s Articles of Organization, it wouldn’t matter in a personal lawsuit. Your ownership in the LLC would come out in court, especially if a judgment were entered against you. And regarding the use of Land Trust (or any type of Trust), it’s best to speak to an asset protection attorney. Too many details to get into due to the variation.

      The best way to mitigate this is to speak with an asset protection attorney (or a few) in North Carolina. Then the next line of defense would be making the LLC a bonafide Multi-Member LLC. Then increase your car insurance coverage (car accidents can lead to personal lawsuits). And ask your car insurance company to issue you a personal umbrella insurance policy (typically you can get $1M to $5M for a reasonable premium). Other companies will also issue personal umbrella insurance policies, too. Hope that helps!

      p.s. Here are some relevant articles about North Carolina’s charging order protection laws:
      Tuggle Duggins: Charging Orders And North Carolina: How to get at a Debtor’s LLC Interest
      Maryland State Bar Association: Limited Liability Company Charging Orders Part II Charging Order Protections: Exclusivity, Foreclosure and Single Member LLCs

      Reply
      • Thank you for your comment, Matt.
        As much I read and learn more about it, it seems more and more complicated, specially when it comes to banking, mortgage/Loan, tax, collecting rents, marketing and so on.
        For now I added the umbrella insurance as you mentioned, because it was just a phone call :-)
        In the next step, I am going to create LLCs and will transfer the properties. That causes it’s own issues, like transfer tax and due on sale clause. A possible solution could be a Land Trust, …

        Another dilemma: how to buy a new property by collecting funds from other properties’ LLCs? who will be the owner of the new LLC? (The relation between old LLCs and the new one)
        It seems I need a CPA and an Attorney. Do you have good referrals in NC?

        Reply
        • Yes, it’s all a puzzle that takes time to put together. I spent over 6 months doing my own estate plan. It was a lot to digest. And even after putting the proper things in place (i.e. LLCs, Trusts, insurance, etc.), there’s the practical part of putting it all together and making it work… the logistics and the administration of it all. Said another way, the overwhelm is normal ;) Awesome on the umbrella insurance though. That’s a quick win!

          That makes sense about the Land Trust. Definitely speak with a few real estate attorneys and/or titles companies. There are sometimes ways around the transfer tax (or a very reduced rate). It depends on the municipality that governs though.

          Dilemma: You can first distribute the proceeds from Old LLC to the owner (I’m assuming that’s you) and then you make a capital contribution to the New LLC. Another thing to consider is a simple loan. Old LLC loans the money to New LLC. We don’t have any referrals at this time (wish we did). Our best advice is to list out a handful of questions and spend the better part of day asking the same questions to a handful of people. Compare the answers against each other. Additionally, you may gravitate towards one person (by just getting a gut feeling). Typically, we’d say meet them for coffee. However, maybe a Zoom chat will do. Just to see if you like them personally and professionally.

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            • You’re welcome Al. One more thought: if an attorney recommend a specific strategy(ies), ask for relevant case law to see if the recommendation has weight. Happy Holiday :)

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