How to Form an LLC in North Carolina

If you decide to form an LLC in North Carolina, incorporate.com will handle the details. We'll research the availability of your company name and help you prepare and file your Articles of Organization with the Corporations Division of the North Carolina Department of the Secretary of State. We can also take care of many of your company's follow-up needs, including annual report preparation and filing.

Steps to Form a North Carolina LLC

Select a Business Name

The first step to forming your LLC in North Carolina is to select an original name not already in use by another business in the state. Here are some things to keep in mind when choosing your name:

• North Carolina prohibits the use of a name if another company is already using it or one that is very similar. (An exemption may be made if you are able to obtain written permission from the other corporation already using the name.) If the name you want to use has been reserved (i.e., is not yet in use) by another company, you may be able to transfer the name to your company if the current users of the name agree.
• The name must include the words limited liability company or its abbreviation, either L.L.C. or LLC. It can also contain a combination of the words, such as ltd. Liability Co. or ltd. Liability Company. Note that these words will be disregarded by North Carolina's Secretary of State when determining if your proposed name is distinguishable from other names in use.
• The Secretary of State will also disregard articles, conjunctions, prepositions, punctuation, spaces, and the substitution of an Arabic numeral for a word when determining whether your proposed name is distinguishable from other names in use.
• The name may not contain language stating or implying that the LLC is organized for a purpose other than that indicated on its articles of organization.

When forming your LLC in North Carolina, there are certain words and phrases that cannot be used in a business name unless you have received permission from the proper legal authority, or you can provide documentation that proves you are legally qualified to provide the service indicated:

• Bank, Banker and Banking
• Trust
• Mutual
• Cooperative, Co-op
• Insurance
• Realtor
• Engineer, Engineering
• Architect, Architecture, Architectural
• Surveyor, Survey, Surveying
• Certified Public Accountant and abbreviations of such
• Wholesale

You can reserve a corporate name for 120 days for a fee of $30.00. The reservation is non-renewable.

If you decide to set up your LLC in NC with incorporate.com, we will do the necessary research to make sure your company's name meets the state standards.

File Articles of Organization

Once we have verified your company name, incorporate.com will file a Certificate of Organization for your LLC. The filing includes the following information:

• LLC Information: The form must include the exact name of the LLC with an appropriate company ending.
• Organizers/Members: At least one person must execute the Articles of Organization. Include the name and address of each person, and indicate whether each person is a member, organizer or both. Each person listed on the articles will be required to sign the articles.
• Registered Office and Agent: The name and street address and county of a registered agent in North Carolina. The registered agent is the person to whom the state will send all official correspondence. The registered can be, but does not have to be, the same as your company's office address.
• Principal Office: If your LLC has a principal office, you must include the address (including the county). If the mailing address does not match your street address, include it as well.
• Other provisions: You have the option of including additional provisions, such as a statement for regulating the internal affairs of the LLC; the purpose or purposes for which the company is organized; provisions relating to management and regulation of the company's affairs; provisions defining member qualifications, rights, and responsibilities; and provisions limiting or eliminating the personal liability of any member/manager for monetary damages for breach of any duty as a member/manager.
• E-mail address: North Carolina offers a free voluntary notification system. If you opt to provide your email address, you will receive update and reminders from the Secretary of State's office; the state is also using the information as a way to help prevent business identity theft.
• Effective date: The date on which the Articles of Organization become effective. This can be either the filing date, or a later date specified on the certificate, up to 90 days after the day of filing.

LCC Filing Fee

The filing fee to form an LLC in North Carolina is $125.00. It typically takes about 10 to 15 days to form an LLC. Expedited filings are available for an additional fee ($200 for same day filings, $100 for 24-hour filings).

incorporate.com will handle all filing requirements and provide you with the total cost to get your business up and running in North Carolina.

Other Requirements for North Carolina LLCs

Register with the IRS and the North Carolina Department of Revenue

If you intend to hire employees or open a bank account, you will need a federal Employer Identification Number (EIN). incorporate.com can help expedite this step as well.

You can register your business with the North Carolina Department of Revenue by completing and submitting Form NC-BR, or by registering online. When you register, you will be issued an account ID number for such tax purposes as income tax withholding, sales and use tax, and machinery and equipment tax.

LLC Members/Managers

North Carolina LLCs must have at least one member/manager.

Annual Reports

Every North Carolina LLC must file an annual report. The first annual report is due on April 15th of the year following the year you formed your LLC, and every year thereafter on or before April 15th. The annual report may either be filed electronically or a pre-populated annual report may be downloaded online and mailed to the NC Secretary of State's Office.

The annual report fee for a limited liability company is $200.00.

Note: North Carolina does not accept tax software forms for filing.

Principal Office

Your LLC can be located outside of North Carolina.

FAQs

Do I need to reserve a name?

North Carolina does not require name reservation; however, it is a good way to ensure that your company name is available, and will remain available while you form your LLC.

Do I need to submit an operating agreement?

No, you won't need to submit an operating agreement. Nevertheless, drafting your LLC's operating agreement is a critical step in forming your company, as it is the blueprint that you will use to govern operations.

Does North Carolina have publication requirements or other follow-up filings?

No. North Carolina does not require you to publicize your company's organization, and does not have follow-up filing requirements.

North Carolina does not issue a general state business license that will ensure that your company is meeting all state requirements. The state of North Carolina has more than 700 regulatory, state-issued and occupational business licenses and permits, and many cities and counties also require licenses. Depending on what you do and where you plan to operate, your business may be required to have various state and/or municipal licenses, certificates or permits.

North Carolina Business Licenses

North Carolina has developed a Directory of State Business Licenses and Permits to provide guidelines for determining which business licenses and permits companies need to operate in compliance. The directory is organized by these topic areas: Administration; Agriculture and Consumer Services; Public Safety; Commerce; Culture Resources; NC Community College System; Health and Human Services; Public Instruction; Environment and Natural Resources; Insurance; Justice; Labor; Occupational Licensing Boards; Revenue; Secretary of State; Transportation; and Board of Governors of UNC.

Special North Carolina Business Licenses and Permits

Some businesses require specific licenses and permits. Some of these include: Alcoholic Beverage Permit; Rest Home License; Architecture License; Auctioneer License; Barber Examiners License or Cosmetic Arts License; Electrical Contractors License; General Contractors License; Board of Funeral Service; Plumbing & Heating Contractors; Real Estate; Nursing Home or Home Health Facility; Child Day Care License.

City or Local Licenses and Permits

You may also need local licenses and permit requirements in North Carolina, such as privilege licenses, occupational licenses, and other miscellaneous licenses. These licenses and permits are expedited at the county level.

• Privilege License: In North Carolina, all for-profit businesses located within city limits must have a privilege license before beginning business operations. In some cities, zoning and other related requirements must be approved before you can obtain a license. If the business is not located in a city, county privilege licenses may be applicable.
• Zoning: The Zoning or Planning Department, city or county, determines if a business location is zoned correctly for the proposed business type. Some areas are not zoned for commercial businesses; you will want to make sure that your area is zoned appropriately for your business type. Some home-based businesses are required to have a Home Occupation Use Permit. In addition, you may live in a subdivision with Covenants, Codes and Restrictions (CC and Rs), that are more restrictive than your city zoning requirements. Check with your homeowners association for details.
• Signs: Sign sizes and locations are regulated within city or county limits and are determined by the Inspection or Planning Department. Contact the city or county prior before you install of a business sign to ensure it meets the regulations.

Employee Requirements

If you have at least one employee, you are required to address the issue of employer insurance. Employees also trigger numerous tax requirements.

• Health Insurance: The new national health care reform law (the Patient Protection and Affordable Care Act or ACA) requires employers to issue a Marketplace Notification to current employees by October 1st, 2013, and to new hires within 14 days of the employee's start date. The notification is to help employees to better understand health insurance marketplaces, compare health insurance plans and enroll in coverage. North Carolina did not create a state-specific insurance marketplace, opting instead to refer residents to the federal HealthCare.gov marketplace.
• Unemployment Insurance: The Employment Security Law of North Carolina requires you to contribute to the state's unemployment compensation fund, which funds temporary unemployment insurance benefits to eligible workers. If you are a general business employer with at least one worker in 20 different calendar weeks during a calendar year, or with a payroll of at least $1,500 in any calendar quarter, you are liable for contributions under the law.
• Workers' Compensation Insurance: If you have three or more employees, The North Carolina Workers' Compensation Act requires you to either purchase workers' compensation insurance or qualify as a self-insured employer.

Tax Requirements

Your business may be required to pay different taxes in North Carolina, depending upon your type and size of business. Your tax requirements may include:

Sales and Use Tax: If you are a retail or wholesale merchant, you need a Certificate of Registration, unless specifically exempt by statute. You can apply online by completing Form NC-BR.

Franchise Tax: All corporations doing business in North Carolina must pay an annual franchise tax. The tax is calculated using the largest of these tax bases for your company: Capital stock, surplus and undivided profits; 55 percent of appraised ad valorem tax value of all tangible property in North Carolina; or actual investment in tangible property in the state. The franchise tax rate is $1.50 per $1,000, and the minimum amount due is $35.

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