Frequently asked questions about starting and running an LLC, or limited liability company.
A limited liability company (LLC) 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 wants to limit their 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 our article on how to start 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 (SOS). So, your name must be different from any other business name registered or reserved in North Carolina. (N.C. Gen. Stat. § 55D-21 (2023).)
You can check names for availability at the SOS business name database.
Under North Carolina law, an LLC's name must contain the words:
(N.C. Gen. Stat. § 55D-20 (2023).)
You can reserve a name for 120 days by filing an Application to Reserve a Business Entity Name with the SOS. (N.C. Gen. Stat. § 55D-23 (2023).) The application must be filed by mail. As of 2023, the filing fee is $30.
Every North Carolina LLC must have an agent for service of process (called a "registered agent") in the state. This agent is an individual or business entity that agrees to accept legal papers on the LLC's behalf if someone sues the company. The registered agent can be a North Carolina resident, or a corporation or LLC authorized to do business in North Carolina. The registered agent must have a physical street address in North Carolina. (N.C. Gen. Stat. § 55D-30 (2023).)
You can create a North Carolina LLC by filing articles of organization with the SOS Business Registration Division. The articles must include:
(N.C. Gen. Stat. § 57D-2-21 (2023).)
You can file the articles online or by mail. As of 2023, the filing fee is $125.
An LLC operating agreement isn't required in North Carolina. But you should still create one. 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 isn't filed with the SOS.
If an existing or newly created LLC doesn't adopt an operating agreement, the LLC's articles of organization and state law will govern how the LLC is run and managed.
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, only some members or nonmembers who are designated as managers run the LLC. The non-manager members are passive investors.
Additional tax and regulatory requirements might apply to your LLC, including:
EIN. If your LLC has more than one member, it must obtain a federal employer identification number (EIN), even if it has no employees. If you form a single-member LLC, you must obtain an EIN for your LLC only if either you elect to have your business taxed as a corporation instead of a sole proprietorship (disregarded entity) or your single-member LLC has employees. You can get an EIN by completing an online EIN application on the IRS website. There's no filing fee.
Business Licenses. Depending on its type of business and where it's located, your LLC might 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's in an unincorporated area). For state license information, check North Carolina's state boards and commissions' websites.
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 tax and LLC filing requirements.
All North Carolina LLCs must file an annual report with the SOS. LLC annual reports are due each year on April 15 starting the year after you create your LLC. In other words, if you form your LLC in 2023, you must file your first annual report by April 15, 2024. (N.C. Gen. Stat. § 57D-2-24 (2023).)
You can file the annual report with the SOS online by mail. As of 2023, the online filing fee is $203 and the fee for mail-in filings is $200.