Last Updated on

The Limited Liability Company (LLC) is a popular business entity choice structure for many businesses starting in North Carolina The LLC provides personal liability protection and has the potential to save money on taxes. With a little research, you can learn how to form an LLC in North Carolina without an attorney.

Unlike a sole proprietorship or partnership where the small business owner can be personally liable for lawsuits against the business, the LLC is a separate legal structure, protecting for the business owner’s personal assets.

Related: How Does an LLC Protect You?

Besides the liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration and management flexibility.

Forming an LLC in North Carolina is fairly straightforward, but it’s nice to have some support in case you have questions or get stuck.  IncFile and Inc Authority provide LLC formation guidance for only the cost of the state fees!

Related: Should you use a Formation Service, Hire an Attorney or Do it Yourself?

To form a Limited Liability Company in North Carolina, file the Articles of Organization with the North Carolina Secretary of State.  The LLC filing fee is $125 and approval is typically around one week.  For an additional $100, you can opt for a filing in under 24 hours.

If you have questions, contact the North Carolina Secretary of State at 919-814-5400.

 

HOW TO FILE THE ARTICLES OF ORGANIZATION AND FORM A NORTH CAROLINA LLC

Start off by downloading the Articles of Organization Form L-01.  Enter the information into the form.  If you file online, upload the saved PDF, otherwise mail in the form to the Secretary of State.

Step 1: LLC Name

Enter the name you want for the LLC.  The name of the LLC has to differ from other entity names registered with the Secretary of State.  Check on available North Carolina LLC names before filing to be sure the one you want is available.

Additionally, the name of the LLC must include one of the following designators at the end of the business name:

  • Limited Liability Company
  • Ltd. Liability Co.
  • Limited Liability Co.
  • Ltd. Liability Company
  • L.L.C.
  • LLC

A comma may be used after the business name and before the designator.  “Cowboy Cleaners LLC” and “Cowboy Cleaners, LLC” are both acceptable.

Before settling on a name, you may want to see if a domain name is also available in order to match your business name and website address.

Step 2: LLC Organizers

Enter the name and address of each person responsible for executing the articles of organization and whether they are a member, organizer or both by checking the applicable boxes. Unless the articles of organization provide otherwise, each person executing the articles of organization in the capacity of a member of the limited liability company becomes a member at the time that the filing by the Secretary of State of the articles of organization of the limited liability company becomes effective.

An LLC Organizer is involved with the formation of the Articles of Organization.  The Organizer may or may not become a member, such as a mentor, attorney or accountant, but the initial members will all be listed as organizers.

 

Step 3: Name of the Registered Agent

A North Carolina Registered Agent must be identified before forming an LLC.  The Registered Agent can either be a resident of North Carolina or a Resident Agent service.

Even though the business owner can be the registered agent, their name and address become public record and with that comes a loss of privacy. This is more important for some entrepreneurs, especially when they are doing business from home.

 

Step 4: Street Address of the Registered Agent

The Registered Agent must have a physical address in the state (PO Boxes are not allowed) and act as a point of contact to receive legal documents, tax notices, summons, subpoenas, etc on behalf of the LLC.

Step 5: Mailing Address of the Registered Agent

If you prefer to receive mail from the Secretary of State at an address different from the street address in #4, enter the address.  This address can be a PO Box or an address out-of-state.  If the mailing address is the same, leave this section blank.

Step 6: Principal Office

There are 2 parts to Step 6.  Section “A” is used if the LLC has a principal office and Section “B” is used if the LLC does not have a principal office.

Section A – In this section, enter the street address, city, state and zip code of the initial principal office of the LLC.  This address can be the physical address of the LLC or it can be the address where the business records are stored.  You may not use a PO Box for the designated office.

Section B – This is usually selected if the principal office has not been secured yet.  A principal office will need to be identified by the time the first annual report is due.

Step 7: Additional Provisions

This is an optional section and not used by most LLCs.  Here you would include the business purpose or additional rules for the operation of the LLC.

Step 8: Company Officials

This section is optional but is used to list the company officials.  This isn’t necessary for a single-member LLC, but a multi-member LLC may find it easier to create an Operating Agreement to list the officials as it is much easier to update the Operating Agreement than it is to update the Articles of Organization.

 

Step 9: Business Email Address

Another optional section, but enter an email address.  The email does not have to be an official business email address, but will get a notification from the Secretary of State’s office when LLC documents are filed.

Step 10: Effective Date

If you want the LLC to start on today’s date choose Yes, otherwise select No and enter a date less than 90 days in the future to start.

If you want the LLC to start immediately, choose today’s date.  If you want to LLC to start later, enter a date less than 90 days in the future to start.  The main reason for delaying the LLC start date is when the filing is being done close to the end of a calendar year and the business will not have any activity until the start of the year.  By delaying until the following year they will reduce the number of end-of-year filings.

In this section, you can indicate how long it will remain in existence.  Most LLCs will choose a Perpetual duration, however, some businesses (usually investment related) will have a specific closure date.

 

Step 11: Signature

Have an individual forming the LLC to sign and accept the terms and conditions.  Click the submit button to save the information and proceed.

 

Step 12: File

At this point, the Articles of Organization can be mailed in or filed online.  Online filings are approved a few days faster than the mailed in forms.

If you want to file online, set up an account with the Secretary of State

How to Form an LLC in North Carolina

  • Select “I want to” in the top menu and then “Create a Business Online”

Register LLC North Carolina SOS

 

Step 13: Online Filing

Filing Type – Select Creation to form a Limited Liability Company.

Requested Entity Name –  

Has the entity been created in another state or country? – The answer for a new business starting out is likely no.

Entity Type – Choose “Limited Liability Company” from the drop-down menu.

Document Type – Choose “Articles of Organization Limited Liability” from the drop-down menu.

Customer Reference Number – Won’t apply to most filers.

Return Email – Enter an email address to correspond with the Secretary of State during the formation process.

NC LLC Submit a Filing

Tasks After Forming Your LLC

Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.

Prepare an Operating Agreement

The operating agreement is a document that governs the framework of an LLC.  This document covers items like ownership rights, member responsibilities, how profits and losses are distributed and more.

Most states do not require an LLC to have an operating agreement but it is still worth considering. Without an operating agreement:

  • The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit
  • Member’s personal liability protection may be diminished
  • Members may not have a full understanding of their roles and responsibilities which could lead to costly disputes in the future

Related: North Carolina operating agreement template

Obtain an EIN

The EIN or Employer Identification Number is a unique 9-digit number for a business. Similar to a social security number for an individual, the EIN identifies business entities for tax purposes.  

The EIN will be needed in order to open a bank account, register for business licenses and permits, file tax returns, pay payroll taxes and more. 

Related: How to Apply for an EIN

Open an LLC Bank Account

Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.

Several documents will be needed to open a business bank account such as:

  • A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
  • Copies of the original formation paperwork from the state showing the creation of the LLC.
  • Driver’s licenses of the members.
  • Depending on the age of the LLC, a North Carolina Certificate of Good Standing may be needed to prove the LLC is active and in good standing with the state.

Related: How to Open a Business Bank Account for your LLC 

Apply for Business Licenses and Permits

Depending on what your business does and where it is located, there will likely be a variety of business licenses and permits to register for before starting. Some common registrations include:

  • Business License – Some cities require businesses to obtain licensing before they can start. In some cases, even home-based businesses must have licensing in order to legally operate. 
  • Professional License – Certain services such as barbershops, accountants, salons and others must be licensed.
  • Sales & Use Tax Number – In order to sell products and certain services, registration with the North Carolina Department of Revenue will be necessary.

Related: What Business Licenses are Needed in North Carolina?

File Annual Reports

LLCs are required to file an annual report with the North Carolina Secretary of State.  The annual report updates ownership information and other details.

Related: How to File a North Carolina LLC Annual Report