How to start an LLC in North Carolina in 2024

For business owners, starting a limited liability company (LLC) can be an important step toward reducing your legal and financial risk, since it separates your personal assets from your business. The requirements for forming an LLC are different in each state, but it’s fairly straightforward in North Carolina. It includes these steps: 

• Choose your LLC business name.
• Choose your registered agent. 
• Obtain any necessary licenses or permits. 
• File your articles of organization.
• Obtain an employer identification number (EIN). 
• Register to pay state taxes. 
• Open an LLC bank account. 

8 steps to start an LLC in North Carolina

1. Choose your LLC business name

Select a business name and make sure it’s not already taken. The state must approve your name, since some names are not admissible. This may require further licensing or provision of business documentation to the North Carolina department of the Secretary of State.

For example, before using them in your name, you may need to submit documentation that shows your legal authority to use the following words:

• Cooperative and co-op.
• Architect, architecture and architectural. 
• Certified public accountant and CPA. 
• Engineer and engineering.
• Insurance.
• Pharmacy, prescription drug, prescription, drug, Rx and apothecary.
• Surveyor, survey and surveying. 
• Wholesale. 

You may also have to fulfill licensing requirements before you can use the following words:

• Bank, banker and banking.
• Mutual.
• Trust.
• Realtor. 

Note: Refer to step three to determine your business type’s licensing requirements.

You can find out if the name is available by searching business names through the state’s register of deeds office or the department of the Secretary of State, and/or by using a free online search tool, like the one provided by Bizee and Northwest Registered Agent, among others. You can also hire an LLC formation firm to conduct a name search on your behalf. 

2. Designate your registered agent

A registered agent is responsible for receiving business communications, such as process servicing (or legal notices) and other official mail during all regular local business hours. It must then make them accessible to your business’ responsible parties, such as the controlling manager. 

You can choose either a person or an entity to fulfill this requirement, including yourself or a business formation company. For example, Inc Authority and Bizee offer registered agent services for free for the first year, with any of their LLC formation plans. If you choose your own registered agent, note they must have an address in North Carolina. 

Serving as your own registered agent is tempting, since it’s a free option, but there are a few drawbacks to consider:

• You may need to list your business address in public records.
• You might need to be physically present to receive deliveries, meaning you can’t leave the office for lunch with a client or business travel.
• If you are listed as the registered agent, embarrassing correspondence, such as notifications that you’re being sued, may be delivered in-office in front of clients or employees.

Read our Best Registered Agent Services guide to find the best provider for your needs.

3. Obtain licenses or permits (if required)

Depending on the type of business you conduct in North Carolina, you may need to obtain a state license, a permit and/or a local license to conduct business. Some example business types that need additional licenses (and their fees) include: 

• Barber shops: $120 per new license application and $50 for a new license. 
• Breweries: $400 per new license application and $300 for renewals. 
• Paralegals: $125 per new license application and $50 for license renewals. 
• Plant nurseries: $0 per new licenses and renewal. 
• Certified public accountants (CPAs): $100 per new license and $60 for license renewals. 
• Pest control consultant: $75 for a new license and $75 for license renewals. 
• Child care centers: $0 for a new license and any renewals. 
• Dentist (by credentials): $2000 per new license and $339 for license renewals. 
• Funeral directors: $150 per new license and $75 for license renewals. 
• Hospice: $400 for a new license and $400 for license renewals. 

You can find a searchable database of the required licenses and permits, as well as the corresponding fees, at NCBOLD.com. Click on your industry or occupation to determine application and renewal fees. 

4. File articles of organization

Next, submit your articles of organization (Form L-01). This document provides the state with basic details about your new business. It must be submitted to the secretary of state’s business registration division in order for you to register your LLC. You can submit your document online, via mail or in person, along with a $115 filing fee. Your document must include:

• Your company’s name.
• The name and business address of each person executing the articles of organization.
• The name and address of your registered agent.
• The address of your main office.

There are also a handful of companies that can help you file this document, including LegalZoom or ZenBusiness, both of which include articles of organization in their free LLC formation plans. However, you may find that the form is straightforward enough to complete on your own.

New LLC reporting requirement alert 

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has implemented a new reporting requirement for all non-exempt LLCs starting on January 1, 2024. 

The requirement is called the Beneficial Ownership Information (BOI) report and it is estimated to only take about 20 minutes to complete. 

Here’s what you need to know:

• LLCs formed before January 1, 2024 have until January 1, 2025 to file.
• LLCs formed between January 1, 2024 and January 1, 2025 have 90 days to file from the confirmed date of the businesses’ registration.
• New LLCs formed after January 1, 2025 will have 30 days to file from the confirmed date of formation.

For all details, FAQs and to file, visit FinCEN’s BOI website. 

5. Obtain an employer identification number (EIN)

For-profit U.S.-based LLCs are required to file for an employer identification number (EIN). This number allows the IRS to assist you with tax administration services. It is also required for certain business tasks, such as opening an LLC bank account and filing business taxes. 

To obtain an EIN, you can file on the IRS website (using Form SS-4), by fax or by mail. Current fax and mailing addresses for filing your paperwork are also available on the IRS website. However, keep in mind that filing by mail can take up to four weeks, while filing online is immediate, allowing you to print a document with your EIN the same day.

Filing for your EIN is free, so the IRS warns against using websites that charge for the service. If you need filing assistance, consider a company that offers complimentary EIN services, such as Swyft Filings.

6. Register to pay state taxes

Some LLCs are required to register for sales and use tax with the state’s Department of Revenue. For example, remote businesses with sales exceeding $100,000 or with over 200 yearly transactions sourced to North Carolina in the current or previous calendar year must register. Wholesale merchants must also apply before conducting business in the state. Other LLCs that must apply include laundry service, digital property and taxable service providers.

Depending on the types of goods and services you provide, your LLC may be among those required to register for sales and use taxes. You can see a list of businesses that are required to register at NCDOR.gov.

To register your LLC, you need the following information: 

• Your Social Security number or EIN.
• Your business name.
• Your address.
• Your phone number.
• Details about your LLC formation, including the type of business and formation date.

You can register for your sales and use tax number online for free through NCDOR’s business registration portal.

7. Open a business bank account

You don’t have to open a business bank account in order to start an LLC, but doing so has a variety of benefits, so we strongly recommend you do so. According to the Small Business Association (SBA), these are some benefits to opening an LLC bank account:

• To keep your business funds separate from your personal funds, thereby helping to prevent personal financial liability. 
• To get special protections for your customers’ personal information.
• To accept credit card payments and make out checks for your business.

To open an LLC bank account, you may need an initial deposit and/or a minimum deposit, so shop around and compare options. Different banks also have additional information or document requirements for opening an LLC account. 

For example, Bank of America requires a $16 fee if you do not maintain at least $5,000 in your business account(s) or use the Bank of America card to make at least $250 in monthly qualified purchases. It also requires the following information and documents to open an LLC bank account:

• The name of your LLC. 
• The address of your LLC. 
• The LLC’s EIN. 
• The country and state of business formation. 
• The Social Security numbers and birth dates of all individuals who own at least 25% of the business as well as the controlling manager. 
• Your LLC’s articles of organization.
• Your LLC’s certificate of formation.

You can find out about bank-specific requirements by calling North Carolina banks of your choosing. Some banks, such as Bank of America, also list their requirements on their websites. 

8. Create an operating agreement

An operating agreement is a document that outlines how your company will make certain decisions and important details like each members’ roles and ownership percentages. Operating agreements are also not required to start an LLC in North Carolina, but we strongly recommend them for the best outcome for your LLC. They serve the following purposes: 

• Liability protection: By distinguishing your LLC from a single-member LLC (that operates as a sole proprietorship), a filed operating agreement offers individual LLC members protection from liabilities associated with the business, such as financial liabilities. 
• Dispute protection and prevention: Your operating agreement outlines how disputes should be solved and how key business decisions should be made. When referenced during a dispute or in the normal course of business, it helps to clarify expectations so disputes are solved quickly or don’t arise at all. 
• To overrule state operating rules: Without an operating agreement, you will have to default to state rules regarding how your business operates, which can be contrary to your company’s needs. 

Your LLC operating agreement should include the following information: 

• The percentage of each members’ ownership. 
• Each members’ voting rights and responsibilities. 
• The distribution of profits among members. 
• A schedule for holding member meetings. 
• Rules for how the LLC can be dissolved. 
• Rules for how a member may leave the LLC. 
• The powers and duties of each member. 

Some LLC formation companies, like Rocket Lawyer and Northwest Registered Agent, offer online templates to help you make your operating agreement for free. Rocket Lawyer’s online operating agreement is unique in that it walks you through the process step-by-step via a questionnaire, then fills out and offers a printable operating agreement with a free Rocket Lawyer account. 

However, these templates are often quite general, and your company may have unique additions that should be included. It may be worth hiring a lawyer to look over your document to ensure important details are included.

Once you’ve filled out your operating agreement, make sure that all business owners and controlling managers sign it to bind them to the terms within it. Then, keep it in your file of core business documents, such as your formation papers, for future application. 

Cost to start an LLC in North Carolina

There are several fees associated with forming an LLC in North Carolina that are payable to the “NC Secretary of State.” At minimum, they will likely include the following: 

• $125 for articles of organization.
• $10 to reserve an LLC name.
• $5 to designate a registered agent.
• $200 for annual report filing.

You may need expedited document processing, since the secretary of state is currently reporting delays due to staffing shortages. The fee is $100 for 24-hour expedited services or $200 for same-day services.

Find the best LLC services for North Carolina: Best LLC services of 2024

North Carolina requirements for LLCs

To maintain your LLC, you need to file an annual report with North Carolina’s Secretary of State. These reports cost $200 to file and are due on or before April 15th each year, starting the year after business formation.

If your business is required to pay state or federal taxes, quarterly returns are due by the last day of January, April, July and October. Monthly returns for the prior month are due by 20th. You can file state use and sales taxes online or by mail.

Resources for North Carolina LLCs

The state of North Carolina offers a wide variety of services for people who want to start an LLC. Here are a few agencies you may want to contact and what they offer: 

• North Carolina Secretary of State: This office offers forms, e-filing and business guidance.
• Rural RISE NC: This entity provides mentors, business counselors and funding resources.
• Small Business Center Network of the North Carolina Community College System: This resource offers business planning assistance and guides.
• EPDNC.com: EPDN Small Business Advisors offer phone consultations and help obtain licenses and permits.
• SBA North Carolina District: The Small Business Association offers funding programs, counseling and federal contracting certifications.
• North Carolina Veterans Business Association: This association offers fee-based memberships with access to events, a business directory and more.

Frequently asked questions (FAQs)

What is an LLC?

A limited liability company, or LLC, is a business structure that separates your personal finances from your business finances and offers a structure for planning and implementing agreed-upon business operation terms. By forming an LLC, business owners can reduce their individual liability for legal issues and for financial debts incurred by the business.

Can I set up an LLC for free in North Carolina?

It is not free to set up an LLC in North Carolina. You need to pay $125 to file your LLC’s articles of organization, $200 to file your annual report and $5 to designate a registered agent. You may also need to pay for permits and licenses, for a professional registered agent service and to open an LLC bank account. These tasks can range from free to hundreds or thousands of dollars, depending on your business type and the entity’s you work through to complete them. 

You can hire an LLC formation company to take care of some of these requirements for you. For example, you can sign up for a free LLC formation plan (not including state or licensing fees) from Bizee, which includes filing your articles of organization and complimentary registered agent service for the first year.

Do North Carolina LLCs pay taxes?

LLCs are not required to pay taxes on income in North Carolina, but owners (also referred to as “members”) may be taxed under certain circumstances, such as if they sell certain types of products or services. For guidance on both state and federal tax issues, consult with a tax professional such as a certified public account (CPA).

Do I need a registered agent in North Carolina?

You are required to have a registered agent to form an LLC in North Carolina. You can choose an agent and file the paperwork yourself or you can hire a registered agent service like BetterLegal or Northwest Registered Agent to do the work on your behalf.

Do North Carolina LLCs need to file an annual report?

Yes, each LLC is required to file an annual report with the Secretary of State in North Carolina. Filing is due by April 15th each year, starting the year after you form your LLC. The state currently charges a $200 fee for filing each year.

How do I dissolve an LLC in North Carolina?

You can dissolve an LLC in North Carolina by filing articles of dissolution (Form L-07) with the Secretary of State’s office. The filing fee is $30.