How to Start an LLC in North Carolina: Step by Step

Starting a business in North Carolina is an exciting journey, and forming a Limited Liability Company (LLC) is one of the first steps you should take. An LLC provides liability protection for your personal assets and adds legitimacy to your company. Here’s a step-by-step guide on how to start an LLC in North Carolina.

Why Start an LLC in North Carolina?

North Carolina boasts one of the best business climates in the United States, including “How to start an LLC in North Carolina“, and it is known for its tax-friendly environment, with the lowest corporate tax rate in the country at 3%. The state offers excellent access to small business capital and a highly educated workforce. With cities like Raleigh, which was a finalist for Amazon’s HQ2 headquarters, it’s no wonder entrepreneurs are flocking to start their businesses here.

Step 1: Choose a Name for Your LLC

Your business name is your brand’s first impression, so make it count! Choose a name that is unique, memorable, and easy to pronounce. It should represent your business’s essence. Before you get too attached to a name, check its availability. You can do this by searching the North Carolina Secretary of State’s website for any potential conflicts.

A few important rules:

• Your business name must include “Limited Liability Company” or “LLC”.
• It must be distinct and not “confusingly similar” to any existing business names in North Carolina.
• If you’re not sure where to start, you can use a business name search service to ensure your chosen name is available and complies with state regulations.

Step 2: Choose Your Management Structure

Next, decide how your LLC will be managed. You have two options: member-managed or manager-managed. In a member-managed LLC, all members (owners) have a say in the day-to-day operations. This is the most common and default choice. Alternatively, a manager-managed LLC appoints one or more managers (who can be members or external individuals) to handle daily operations, leaving the members free from operational decisions.

Step 3: Designate a Registered Agent

Every LLC in North Carolina must have a registered agent, a person, or a third-party service that receives legal and official documents on behalf of your business. The registered agent must have a physical address in North Carolina (no P.O. Boxes).

Using a third-party service as your registered agent can be beneficial. It helps maintain privacy since the registered agent’s address is public. It also ensures that important documents are handled professionally and discreetly, keeping any potential legal issues out of sight from customers or employees.

Step 4: File Your Articles of Organization

To officially form your LLC, you need to file the Articles of Organization with the North Carolina Secretary of State. This document includes basic information about your LLC such as the name, address, registered agent, and purpose of your business. The filing fee is $125, and you can submit the form online or by mail.

Step 5: Create an Operating Agreement

An operating agreement outlines the operational procedures and ownership structure of your LLC. It’s an internal document but crucial for maintaining the organization and clarity within your business. It covers details like the roles and responsibilities of members, voting rights, distribution of profits and losses, and procedures for adding or removing members.

Step 6: Obtain Necessary Business Licenses and Permits

While North Carolina does not require a general business license, your LLC may need specific permits and licenses depending on the nature of your business. Reach out to the North Carolina Secretary of State or the Business Link North Carolina team for guidance on what licenses your business may need at the state, city, county, and federal levels.

Step 7: Get an EIN Number

An Employer Identification Number (EIN) is like a Social Security Number for your business. Issued by the IRS, it’s used for tax purposes and is necessary for opening business bank accounts, hiring employees, and filing taxes. You can apply for an EIN online through the IRS website after your LLC is approved by the state.

Filing a DBA in North Carolina

If you plan to operate your LLC under a different name than its legal name, you’ll need to file a Doing Business As (DBA) “filing a DBA in North Carolina” in North Carolina. This allows you to conduct business under a name that better reflects your brand. Filing a DBA is simple and can be done through the North Carolina Secretary of State’s office.

Starting an LLC can feel overwhelming, but with the right resources and a bit of guidance, you’ll be on your way in no time. If you prefer to have experts handle the paperwork, consider services like MyCorporation, which can help you file all necessary documents quickly and accurately, ensuring your business gets off to a smooth start.

Forming an LLC in North Carolina is a smart move for any new business owner. It provides liability protection, adds credibility, and sets a strong foundation for future growth. Follow these steps, and you’ll be well on your way to building a successful business in the Tar Heel State.