Start An LLC In North Carolina
Creating an LLC in North Carolina may seem like an intimidating task to aspiring entrepreneurs. However, it’s a lot easier than you might think.
Follow our guide on how to start an LLC in North Carolina to build the business you’ve always dreamed of.
First, let’s compare North Carolina to its neighboring states as a place to form an LLC.
| State | North Carolina | South Carolina | Virginia | Tennessee | US Average |
|---|---|---|---|---|---|
| Population | 10,551,162 | 5,190,705 | 8,642,274 | 6,975,218 | 6,619,825 |
| LLC Filing Fee | $125 | $110 | $100 | $300 | $130.38 |
| LLC Annual/Biennial Fee | $200 (every year) | $0 (no fee and no information report, unless LLC is taxed as an S-Corp ) | $50 (every year) | $300 (every year) | $89.34 (every year) |
| Corporate Tax Rate | 2.50% | 5.00% | 6.00% | 6.50% | 5.60% |
| Nominal GDP per capita | $62,077 | $52,031 | $68,483 | $59,969 | $64, 773.08 |
Before You Set Up An LLC In North Carolina
While formally registering an LLC is a simple task, starting an LLC in North Carolina is not something you’ll want to do without adequate preparation and research.
First, you should spend time learning more about your target market. Try to understand what they need or want and figure out whether your product or service will be something that appeals to them.
Next, you should spend time developing and testing your product and gain the necessary knowledge and skills you’ll need to run a company.
If you have not received any formal training on how to run a business, now might be a good time to attend a short course.
Once you have the skills and the information you’ll need, you can get to work devising a business plan that describes what your business will do and what strategies you have in place to ensure its growth.
The Cost To Start An LLC In North Carolina
A common question among entrepreneurs is “how to start an LLC in North Carolina for free.” As with all things in life, setting up an LLC isn’t free.
There is a mandatory fee of $125 that you will need to pay to formally register your business with the Secretary of State.
However, if you need to file Articles of Organization for a foreign LLC, you will need to pay $250. Below is a summary of the other associated costs that may apply:
- Business name reservation – $30 for domestic LLCs and $10 for foreign LLCs
- DBA name registration – $26
- Certified document copies – $30
- Certificate of good standing – $13
The answer to the question “how much to start an LLC in North Carolina?” depends on what you will need and how you choose to do business.
Overall, you can expect to pay between $150 and $304. Remember that additional costs may apply for obtaining a registered agent and business permits and licenses.
Steps To Start An LLC In North Carolina
Follow the steps below when forming an LLC in North Carolina:
Pick A Name For Your LLC
According to state regulations, all LLCs must have names that include one of these abbreviations or terms:
- LLC
- Limited Liability Company
- limited liability co.
- ltd. liability company
- L.L.C.
- ltd. liability co.
Moreover, it must be different from the names of other registered businesses or government entities.
You can check whether a name is still available via the Secretary of State’s company name database, and names may be reserved for a period of 120 days for a fee of $30.
Find A Registered Agent In North Carolina
As in most states, North Carolina LLCs must have an appointed agent who has agreed to accept official documents for the company. According to state law, the agent you choose must:
- Be a person or an organization with the authority to conduct their business in the state
- Have a registered address in NC
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Articles Of Organization
Once you have appointed an agent, you can file the Articles of Organization to make your LLC official. This is filed by mail or online with the North Carolina Secretary of State, Business Registration Division.
Filing Articles of Organization costs $125 or $250 for foreign LLCs.
Other Required Documents
You may also be required to obtain business permits or licenses, depending on the nature of your business. This includes local, state, or federal licenses. You can visit the Department of Revenue or find out more from your county or municipal government office to learn more about these permits.
Did You Know?
The first US law concerning LLCs was enacted in 1977.
Operating Agreement
Operating agreements are essentially internal documents that are not filed with the Secretary of State. They provide information about how the LLC will be governed and work to protect the company’s limited liability status.
It will determine the following for members and managers:
- Rights
- Duties
- Responsibilities
- Power
- Liabilities
In the absence of such an agreement, the following will perform this function:
- Bylaws
- Articles of Organization
- LLC agreement or member control
Get An EIN
If the business has multiple members, each additional member must obtain their own Employer Identification Number (EIN) from the IRS. Suppose you create a single-member limited liability company. In that case, you only need to get an EIN if you want it to be taxable as a corporation rather than a sole proprietorship.
By submitting an EIN request online, you can obtain an EIN for your North Carolina LLC at no additional cost.
The Forms You Need To Register An LLC In North Carolina
You can find the forms required to set up a limited liability company in the state right here:
- Articles of Organization
- Application for Certificate of Authority (Foreign LLC)
- Business license/permit application
- Reserve a business entity name
- Foreign LLC name reservation
- DBA certificate
Did You Know?
There are several benefits associated with operating an LLC, including personal asset protection, easy filing with low associated costs, potential tax advantages, simple, and easy business structure to manage and administer.
LLC Taxes In North Carolina
In North Carolina, business owners can choose to tax their limited liability companies as a pass-through entity or as a corporation.
If you opt for the pass-through option, you’ll have to file a separate federal income tax every year.
On the other hand, when an LLC chooses to be treated as a corporation, as opposed to the usual pass-through tax arrangement, the firm itself is required to submit a separate tax return.
North Carolina levies an income tax on corporations, just like every other state. This tax rate is set at five percent of all taxable annual income, making North Carolina a good state to start an LLC.
How Long Does It Take To Form An LLC In North Carolina?
One of the things new business owners want to know is how long they will have to wait before their limited liability company has been officially processed.
The answer to this question depends on the method you choose to file the Articles of Organization.
If you file via the web portal, your application will be processed within 7 to 10 business days. However, filings made by mail take three to four weeks to complete.
How Much Does It Cost To Run An LLC In North Carolina?
The state requires all LLCs to submit an annual report by the 15th of April each year, and the cost for filing this report online is $202. You will pay $200 for reports submitted by mail.
What To Do After Formation?
Although starting an LLC in North Carolina by formalizing the business is essential, it isn’t the only step you’ll need to take to ensure your business’ success.
- Establish Your Brand. To do this, you will need to research your target market, decide what your focus and personality will be, and set goals to build a reputable brand that consumers can trust.
- Create a Logo. A logo can help your target market recognize and remember your brand, which can help build trust. Since it must be as eye-catching and memorable as possible, hiring a professional to take care of this task is advisable.
- Build an Optimized Website or Online Store. Because no one turns to the Yellow Pages anymore to find service providers, creating a website is an important first step.
- Check That You Are Tax Compliant. Always ensure that your LLC is compliant with federal and state tax requirements. If you aren’t sure which taxes apply, contact the IRS or speak to an advisor for more information.
- Open a Business Bank Account. Many banks offer business perks you simply cannot receive with a personal account. This also helps to ensure that the LLC’s finances are separate from your own.
- Get Business Insurance. Protect your business in the event that something goes wrong by obtaining insurance coverage.
- Plan for Annual Reports. It is essential to keep track of when annual reports are due and plan for them. If you miss the deadline for filing, penalties could be imposed.
Resources To Start A Successful LLC In North Carolina
In the section below, we’ll provide you with the resources you’ll need to create your limited liability company.
- Online portal to file Articles of Organization
- How to submit business documents online
- North Carolina Department of Revenue (application for business license/permit)
- Forms (North Carolina Secretary of State)
- Company name database
- EIN application
Start Marketing Your LLC In North Carolina
Now that your business is up and running, you’ll need to focus on your marketing plan. Because leads are the lifeline of any company, generating leads through search engine optimization (SEO) and other traditional methods is crucial to your success.
As we’ve mentioned before, you must research your target market. Determine which channels would be best to reach them.
- Are they on social media platforms?
- Which social channels do they use?
Another essential thing to do is to look at the competition to see what marketing strategy these companies have used and how effective they are.
You can incorporate some of these tactics into your own plan and come up with unique approaches to stand out from the crowd.
Moreover, you must focus on building a successful brand. Choose a logo, color scheme for your website and letterheads, and a personality to set yourself up for success.
Hire a marketing team if you need to, or enlist the help of an external marketing consultant to ensure that you are putting your all into making the business work.
How To Dissolve An LLC In North Carolina
If things don’t seem to be going your way and you decide that it is time to close the LLC, follow the steps below to dissolve the business officially:
- Hold a meeting with the members and managers to vote on whether this is the best course of action.
- File the Articles of Dissolution with the state – the cost of filing is $30.
- Wind up by distributing assets and making provisions for discharging liabilities.
- Inform creditors and other claimants that the company is no longer in operation.
- Submit a final tax return.
Conclusion
Setting up an LLC in North Carolina can be one of the best decisions you ever make. If you’re hoping to become a business owner in the state, but don’t want to risk losing your personal assets, a limited liability company can provide a solution.
When forming your LLC, be sure to browse the state laws concerning LLCs to ensure that your company is compliant and do your research on taxation to avoid any later penalties.
If you need to create a limited liability company in another state, we have a number of how-to guides. Please browse our website to find more information and set up an LLC in your chosen state.