Frequently asked questions about starting and running an LLC, or limited liability company.
A limited liability company (LLC for short) is a way to legally structure a business. It combines the limited liability of a corporation with the flexibility and lack of formalities provided by a partnership or sole proprietorship. Any business owner who seeks to limit his or her personal liability for business debts and lawsuits should consider forming an LLC.
Here are the steps you need to take to form an LLC in North Carolina. For more information on how to form an LLC in any state, see How to Form an LLC.
Your LLC's name must be distinguishable from the names of other business entities already on file with the North Carolina Secretary of State. You can check names for availability at the North Carolina Secretary of State business name database.
Under North Carolina law, an LLC's name must contain the words:
You can reserve a name for 120 days by filing an Application to Reserve a Business Entity Name with the North Carolina Secretary of State. The application must be filed by mail. The filing fee is $30.
You don't have to use your LLC's official legal name registered in your Articles of Organization when you do business out in the real world. Instead, you can use an assumed name, also called a trade name, "DBA" (short for doing business as), or a fictitious business name.
To do so in North Carolina, you must register your assumed name with the county where your LLC does business. The application is called an Assumed Business Name Certificate, which you file with the county register of deeds. A single application can cover multiple counties if your LLC does business in more than one. You must file the application by mail and pay a $26 filing fee. For more on registering business names, see How to Register a Business Name.
Every North Carolina LLC must have an agent for service of process in the state. This is an individual or business entity that agrees to accept legal papers on the LLC's behalf someone sues the company. The registered agent may be a North Carolina resident, or a business entity authorized to do business in North Carolina. The registered agent must have a physical street address in North Carolina.
You can create a North Carolina LLC by filing Articles of Organization with the North Carolina Secretary of State, Business Registration Division. The articles must include:
You can file the articles online or by mail. The filing fee is $125.
An LLC operating agreement is not required in North Carolina, but is highly recommended. The operating agreement is the primary document that establishes the rights, powers, duties, liabilities, and obligations of the members among themselves and to the LLC. The agreement is purely an internal document and is not filed with the Secretary of State.
If an existing or newly created LLC does not adopt an operating agreement, its existing articles of organization, bylaws, and/or its member control or limited liability company agreement will collectively become its operating agreement.
Your operating agreement should specify whether your LLC will be member-managed or manager-managed. Most LLCs are member-managed, meaning all of the owners (known as members) are engaged in the operations of the company. In contrast, in a manager-managed LLC, some of the members are passive investors, and designated members or nonmembers are the only ones who participate in running the business. For more information, see Member-Managed LLCs Versus Manager-Managed LLCs.
Additional tax and regulatory requirements may apply to your LLC. These may include:
EIN: If your LLC has more than one member, it must obtain its own IRS Employer Identification Number (EIN), even if it has no employees. If you form a one-member LLC, you must obtain an EIN for it only if you elect to have it taxed as a corporation instead of a sole proprietorship. You may get an EIN by completing an online EIN application. There is no filing fee.
Business Licenses: Depending on its type of business and where it is located, your LLC may need to obtain local and state business licenses or permits. For local licenses, check with the clerk for the city where the LLC's primary place of business is located (or county if it is in an unincorporated area). For state license information, check state boards and commissions' websites. For more information, see How to Get a Small Business License in North Carolina.
Department of Revenue: If you have employees or will be selling goods and collecting sales tax, you'll need to register with the North Carolina Department of Revenue (DOR). For many taxes, you can register online at the DOR website. For more information on North Carolina LLC tax registration, check out North Carolina Annual LLC Filing Requirements.
All North Carolina LLCs must file an annual report with the North Carolina Secretary of State. LLC annual reports are due for the year in which they are filed. In other words, if you form an LLC on or before April 15th, you must file your first annual report by the end of the same year you formed the company. If you start your LLC after April 15th, you will not have to file an annual report until April 15 of the next calendar year.