How to Set up an LLC in North Carolina
April 10, 2023
In one of our past articles, we explained the differences between LLCs and Corporations. Today, we’ll dive into the steps to set up an LLC in the state of North Carolina.
How do I set up an LLC / what are the legal steps to creating an LLC in North Carolina?
To set up an LLC properly, you need to follow several legal steps. The first step is to choose a name for your LLC that complies with the state's regulations and is not already taken by another business. The name cannot already be used or is too similar to an existing entity. Once you choose a valid name with “LLC”, “L.L.C.”, or “Limited Liability Company” in it, you will need to file Articles of Organization with the North Carolina Secretary of State and pay the required filing fees. Additionally, you must appoint a registered agent who is authorized to receive legal, tax, and other important documents on your LLC’s behalf in the mail. The Registered Agent must have a valid North Carolina mailing address. You must obtain a unique federal tax identification number from the Internal Revenue Service for your new LLC. You must also create an operating agreement outlining how your LLC will be run, including the roles and responsibilities of owners (“Members”), a description of how profits and losses will be distributed, and details of voting rights and other decisions that will be made. It is also recommended that you address issues like how to handle deadlocks between Members and how to value membership interests if one owner wants to leave or transfer their membership interest, etc. in this operating agreement. Finally, you will need to obtain any necessary licenses and permits to operate your business legally in North Carolina. You should also consider filing a fictitious name (or d/b/a) certificate with the Secretary of State if you plan on running your business under a different name than your legal name.
How much does it cost to set up an LLC?
As of 2023, for domestic entities, the filing fee for filing Articles of Organization for an LLC is $125 (this fee is payable to the NC Secretary of State). Out-of-state entities must pay $250. Additionally, after an LLC is organized, the North Carolina Secretary of State must receive an annual report from your LLC, which costs approximately $202 annually. This requirement starts the year after your LLC is organized.
How long does it take to create an LLC?
Although certain times of year are busier than others and may take longer (e.g., the beginning of the calendar year, end of the year, and around tax deadlines), the typical processing time for the North Carolina Secretary of State to process your Articles of Organization is approximately one week. You do have the option to expedite this processing time by paying an expedited fee of $100 on top of the regular filing fee of $125. This will ensure that your Articles get processed within 24 hours. The application with the IRS for your tax identification number can usually be accomplished in less than one day once the Articles of Organization have been approved and processed by the Secretary of State. The last few steps including drafting an operating agreement can usually be finalized in less than one week if you are working with an attorney or other professional depending on the size and complexity of your new LLC.
If you have any questions about setting up an LLC or would like to start the process of creating one, please contact our office at (704) 814-0729. You can also use our Contact Us form to reach us.