When starting an LLC in North Carolina, there are several steps you must take to make sure you are operating your business legally and in compliance with state regulations.
In this article, I'll walk you through the process of forming an LLC in North Carolina, focusing on the costs, paperwork, and other requirements.
How To Start An LLC In North Carolina
Here are the steps you'll need to take when forming an LLC in North Carolina.
North Carolina LLC Name
To come up with the best possible name for your LLC in North Carolina, it is essential to check whether it is available using the Secretary of State’s business search or other local and online directories.
You should also ensure your chosen name does not infringe upon any trademarked names or phrases. This may require some research and a thorough understanding of intellectual property laws.
Check For Availability
Once you have done your research and found an available LLC name that meets all legal requirements, you can apply for it by submitting an Application to Reserve a Business Entity Name form with the North Carolina Secretary of State's Office.
The application fee is $30, which can be paid by debit card, credit card, electronic funds transfer (EFT), or check. Once approved and registered by the state office, your new business entity will be officially given its new name!
PLLCs Must Use Certain Designators
If you are forming a PLLC (Professional Limited Liability Company) made up of members from licensed occupations such as medicine, law, architecture, and accounting, their name must end with “professional limited liability company," "PLLC" or “P.L." Keep in mind that all these designations have specific meaning in regards to your formation requirements; so be sure that when reserving your business name that you add the appropriate designator if necessary!
Filing Your Application
Once you have chosen your desired business name, you can file an Application to Reserve a Business Entity Name with the Secretary of State for $30. This will reserve your business name for 120 days while you complete all other filing requirements before officially registering your LLC. After filing your application, keep this document safe because it is required when assembling your Articles of Organization, which creates your LLC. This document acts as evidence that there was no infringement or violation when selecting your desired business name.
Once NC SOS has approved your LLC and you’ve paid all necessary fees, it's time to create content around your new business entity! Make sure that all of your content—websites, social media accounts, press releases—uses the same language as listed on your application form submitted with NC SOS.
This should also reflect on the original application submission during the registration process. This will ensure that any future searches conducted by potential customers will find your business quickly without any confusion caused by discrepancies between records or outdated information.
Forming Your LLC
The next step to forming your LLC is filing the Articles of Organization with the North Carolina Secretary of State. Domestic LLCs pay $125 to file, while those from outside the state need an extra fee of $250. Keep in mind that this fee is non-refundable, so make sure you double-check your information before submitting it.
The first step to filing your articles of organization is to fill in Form L-01 with the Secretary of State. This form can be found on their website, or you can pick one up at their office. The cost for filing this form is $125, which can be done online, by mail, or in person. Domestic LLCs should expect processing to take five to seven days to submit their paperwork.
Once you’ve filed your Articles of Organization, you can create a name for your LLC and register it with the NC Secretary of State. You will also need to obtain a federal employer identification number (FEIN) from the IRS if you plan on hiring employees or opening a business bank account.
To comply with state regulations, your LLC must file an annual report with the Secretary of State by April 15th of each year. The filing fee for this report is generally around $200 and depends on whether it's filed online or by paper.
Additionally, many businesses must pay sales tax to their local county or municipality in their respective jurisdiction. It’s always best practice to check with your local government for more information on any additional requirements or fees that may apply to your situation.
Understand Your North Carolina Licensing Requirements
It’s also essential to be aware of the different regulations and requirements that your business could be subject to. Consulting with your local government agency is the best way to start, as companies in specific industries may need state-level licenses. However, here are the key points to consider.
State Licensing Requirements
The license your business needs depends on the industry and activity of your business. For example, if you are selling food or alcohol, then you will need a permit from the Alcoholic Beverage Control Commission. Companies that transport hazardous materials may also require additional licensing from other state agencies, such as the Department of Transportation or the Department of Insurance.
Different businesses may only require permits at the local or county level, so you must check with your local government agency before applying for any license.
Tax Filing Requirements
Suppose your business sells taxable goods or services. In that case, you must register with the NC Department of Revenue and appropriately file returns based on total customer sales each month, quarter, or year, depending upon the amount collected. All sales must be reported to the department so they can adequately collect taxes owed by customers and ensure compliance with all applicable laws. This applies whether you do business online or in person.
Business Counseling Services
The North Carolina Department of Commerce offers free counseling services for businesses seeking advice on licensing requirements specific to their particular industry.
The counselors will walk you through all the necessary steps needed to get licensed and provide additional guidance on meeting compliance standards set by state and federal agencies. Counselors can also help answer questions about tax filing requirements and offer other resources for staying up-to-date on changes in licensing laws throughout North Carolina.
If you are out of state, more paperwork is required to form an LLC in North Carolina. This also comes with an extra cost of $250, so make sure to factor that into your budgeting process when starting an LLC business in North Carolina.
It’s important to note that although filing these documents does not guarantee acceptance by the Secretary of State, it does serve as some assurance that you have taken all the necessary steps toward becoming an official LLC in North Carolina. In addition to this filing fee, other fees may be associated with forming your business, such as annual report fees and franchise tax fees, which vary depending on your unique situation.
The Benefits Of Creating An LLC Operating Agreement
When forming an LLC, you should ensure that all documents become part of official records even though it’s not mandatory due to certain states' regulations –but highly beneficial should any issues arise!
As such, creating an LLC operating agreement is essential to protect you and your business partners. Not only will this document serve as a contract between company members, but it also specifies how operations are conducted, what rights each person has in their contribution & vote share, management roles (if applicable), meeting schedules and voting procedures, plus terms for admitting or removing new/existing members from the LLC.
An operating agreement also outlines each member's duties, obligations, and rights within the business. This document details how profits and losses are shared among members and how decisions should be made. It’s important to consider all potential scenarios when setting up your operating agreement so that everyone involved understands their responsibilities ahead of time.
Additionally, a signed contract can help protect each member from personal liability if something goes wrong with the business. That way, no one is held financially responsible for another member’s actions or mistakes if they have already agreed upon the terms set out in the agreement.
What LLCs Need To Know About Government Regulations In North Carolina
Another aspect to consider are the various government regulations that apply in NC. Here are the key ones.
Employer Identification Number (EIN)
An EIN is like a Social Security number for your business; it must be used whenever you file taxes or open a business bank account. You can apply for an EIN online through the IRS website or call the IRS at 1-800-829-4933. It’s important to note that only one EIN is needed per LLC, regardless of how many members it has.
If your LLC has employees, you must adhere to specific employer guidelines, such as new hire reporting and payroll tax deductions. The North Carolina Department of Revenue provides more information about these requirements on its website. Additionally, if your employee earns more than $1,500 in a calendar year, they may be eligible for unemployment insurance - which means that you must register with the state’s Employment Security Commission (ESC).
LLCs are typically liable for income tax on federal and state levels and other potential taxes like self-employment, FUTA, and sales tax. Each type of tax comes with its filing requirements and deadlines.Make sure you're familiar with all applicable rules so that your LLC remains compliant with government regulations in North Carolina.
Staying Compliant With North Carolina LLC Regulations
Here’s how to stay in good standing with the state government in North Caroline.
Filing Annual Report
The annual report should be filed each year before April 15th to remain compliant. This document informs the Secretary of State of any changes made within the LLC since the last filing date.
This includes changes such as registered agent information or company address updates. These details must be accurate so that all members have current contact information if needed.
When filing the annual report, you may also need to pay additional fees depending on the type of LLC you own and how many members you have. While prices vary from state to state, they typically range between $30-$50 per year. In most cases, they can be paid online via credit card or e-check through the Secretary of State website or by mail using a check or money order made out to the North Carolina Department of Revenue.
Regular Member Meetings
In addition to filing an annual report, regular member meetings are just as important; decisions made by a manager or members must always be documented properly so you can rest assured knowing everything's up-to-date!
These documents should include meeting minutes that list all topics discussed and decisions made during each meeting. The notes should also include names of attendees who were present and votes taken during each meeting when applicable.
Meeting minutes should be kept on file for seven years after each meeting date for future reference and recordkeeping purposes.
Research & Regulation Updates
It’s also essential to stay informed about any new regulations regarding your LLC and any changes in state laws that may have been passed recently. These updates will ensure you remain compliant with all applicable laws and regulations. You can find this information online by researching relevant websites or contacting the local Secretary of State office directly.
Forming an LLC in North Carolina is a great way to start and grow your business while staying within the boundaries of the law.
To stay compliant, following the above guidelines is essential. This includes filing an annual report, holding regular member meetings, and staying up-to-date on any changes in state laws or regulations. Doing so will ensure that your LLC remains in good standing and can continue to operate successfully for years to come.