So, you’ve spent a good deal of time coming up with a great business idea and are ready to launch it in North Carolina. Do you know how to turn your concept into a reality?
As you’ll find by reading through these steps, getting your business off the ground in North Carolina isn’t a complicated endeavor. Whether you’re forming a corporation, partnership, or limited liability company, the procedures have been simplified to help you file paperwork, get a tax ID number, and plan to have documents delivered to a registered agent. If you work your way through these tasks, you’ll have a legal business up and running in the Tar Heel State in no time.
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How is an LLC formed in North Carolina?
For the sake of simplicity, let’s assume you’ve chosen to set up your business as an LLC in North Carolina. To get started on your journey toward launching your new venture, simply follow these steps:
1. Name the company
For many entrepreneurs, coming up with just the right name for your business can feel like a “Eureka!” moment. But don’t fall in the love with the name until you’re sure it hasn’t already been taken. Sometimes, even an incredibly unique name has already been claimed in the state where you plan to do business.
But don’t panic. There are some tricks that may allow you to use the same—either formally or informally. Here’s what you need to know:
- The law in North Carolina will require your business name to contain one of the following: “Limited Liability Company,” “ltd. Liability co.,” “limited liability co.,” “ltd. Liability company,” “L.L.C.” or “LLC.”
- It’s vital that your business name be distinguishable from those already on file with the Secretary of State in North Carolina. It’s easy to check yourself in the business name database. Once you know if the name is taken, you’ll need to download the Application to Reserve a Business Entity Name and mail it to the North Carolina Secretary of State along with the $30 filing fee. The name will be reserved for 120 days.
- If you’re concerned that the name is too formal for everyday use, you can opt to use an assumed name. You’ll also hear this referred to as a ‘trade name” or “DBA” (which is the acronym for “doing business as). This fictitious business name must be filed with the county register of deeds, which you can identify here. You’ll need to file an Assumed Business Name Certificate and pay a $26 fee. There are two pieces of good news: First, you only need to file in one county where your LLC does business, even if you’ll be operating in multiple counties in North Carolina. Second, you won’t need to renew the registration every year.
2. Pick a registered agent
As in other states, limited liability companies in North Carolina must list a registered agent of service with the state. This person (or business entity) is often referred to as the “registered agent.” The primary role of the registered agent is to be available to receive legal paperwork on your business’s behalf.
3. File Articles of Organization with the State of North Carolina
That state of North Carolina requires you to file something called Articles of Organization with the Secretary of State.
Required information will include the name of your LLC; the effective date of the Articles (if not upon filing); the LLC’s address and phone number (use your LLC’s principal office or check the box indicating you don’t have a principal office); the name and address of everyone signing the Articles; your registered agent’s name and address; the signature of a member, organizer or representative.
You have the option to file online using the North Carolina Secretary of State’s online portal or via postal mail. Either way, the fee is $125.
4. Create an operating agreement
Not everything on this list is a requirement. In North Carolina, you don’t have to create an operating agreement, although it’s highly advisable.
The operating agreement is a primarily internal document that spells out the duties, rights, responsibilities, powers and obligations of the members and/or managers. In addition, an operating agreement helps distinguish your LLC as a separate business entity.
Not sure how to create an operating agreement? Don’t worry. The internet has a variety of samples, templates, and tips to help you.
The operating agreement is not filed with the state.
5. Obtain an EIN
Every North Carolina LLC with more than one member needs to get an Employer Identification Number (EIN) from the Internal Revenue Service.
Likewise, if your LLC has only one member but you choose to have it taxed as a corporation versus as a sole proprietorship, you’ll also need an EIN.
Obtaining an EIN is free and all you need to do is complete this application to get your Federal Tax Identification Number.
6. File an annual report
Whether your business is domestic or foreign, you’ll need to file an annual report with the North Carolina Secretary of State. This report is due on April 15 every year after the year of your LLC’s creation. (If your LLC is formed after April 15, you won’t need to file your annual report until the following year.)
You have two options for filing your annual report. Online, you can file it with the Secretary of State’s Online Annual Report Editor, along with a $202 fee. If you’d prefer to mail in your annual report, the fee is only $200.
What is a North Carolina registered agent?
Every U.S. state requires business owners to list a registered agent, whose responsibility it is to accept the delivery of important paperwork on behalf of your LLC. The registered agent of service can be an individual or a business entity.
Do I really need a registered agent in North Carolina?
Yes, some of the paperwork you’ll fill out for your LLC in North Carolina will require you to list a registered agent.
Can I be my own registered agent in North Carolina?
North Carolina, like other states, allows you to serve as your own registered agent.
Who can be a registered agent in North Carolina?
There’s not a lot of strict criteria to be a registered agent in North Carolina. The rules are basically the same in all states, including:
- If the registered agent is a person (vs. a business entity), he or she must be at least 18 years old.
- The registered agent must have a street address in North Carolina. Post office boxes are now allowed due to the need for paperwork to be hand-delivered.
- The registered agent must be able to accept deliveries of important documents on behalf of your LLC during regular business hours.
Why would a company choose to work with a registered agent service?
Ask any first-time entrepreneur about start-up expenses and they’ll likely tell you that money is tight. And while you might be able to save a little cash by representing yourself as a registered agent rather than paying a person or business entity to do it, it’s worth considering the advantages of outsourcing the task:
- Local options. As a brand-new business in North Carolina, it’s understandable that you might not have an office, storefront, or even a house yet in the state. That’s not a concern for most aspects of your LLC, but it does mean you won’t fulfill the requirements to represent yourself as a registered agent. The good news is, there are plenty of registered agents in North Carolina that are both affordable and experienced.
- Availability. Money isn’t the only concern for start-ups. For many entrepreneurs, time may be even more precious. After all, you may need to run errands, train employees, or meet up with vendors, contractors, or investors. Do you really have the availability to stay in one location just to wait for possible deliveries of documents?
- Privacy. Not everyone knows that legal documents are sometimes delivered by uniformed law enforcement officials. Granted, not all paperwork you’ll receive will necessarily be a lawsuit, but there’s no way for witnesses to the delivery to know what’s inside the envelope. With that said, do you want to risk employees, customers or neighbors catching a glimpse of law enforcement showing up at your home, office or place of business? Probably not. That’s where the privacy of using a registered agent comes into play.
- Experience. Are you up to speed on North Carolina’s state and federal compliance regulations and deadlines? For the majority of new business owners, your experience will be eclipsed by that of registered agents.
- Time savings. Even taking the leap to assume you have the experience to fill out complicated legal paperwork, do you have the time? Hiring a registered agent will take this task off your already full to-do list.
List of North Carolina registered agent services
Searching for a registered agent in North Carolina? Here is a handful to get you started:
- Incfile.com: Incfile.com can help entrepreneurs file their LLC formation paperwork and serve as the company’s registered agent. The online company offers a host of beneficial business services that includes filing reports and other necessary documents with the state. The first year is free. After that, it’s $119 a year.
- Northwest Registered Agent: For $125 a year, Northwest Registered Agent offers an online portal, real-time updates when mail is received, and pricing that remains the same each year. The company offers its services in several states and has years of experience in the field. Additional business services are also offered.
- Swyft Filings: Swyft Filings offers registered agent services that start at $149 a year. Users get an online dashboard, report and filing reminders, and secure document storage for this fee. In addition, the company has a buffet of other business services available when you have a need.
How much does a registered agent service cost in North Carolina?
In North Carolina, you’ll find that most registered agents charge between $49 and $99.
How does an owner select a registered agent in North Carolina?
Once you decide on a registered agent, you’ll need to list the person or entity on some of the forms you’ll file with the North Carolina Secretary of State.
Can a company change its registered agent?
The North Carolina Secretary of State makes it easy to change your registered agent. Simply file the Statement of Change of Registered Office And/Or Registered Agent form and pay the $5 filing fee.
What’s a resident agent?
The term ‘resident agent” is sometimes used synonymously with the term “registered agent.”
What’s a commercial registered agent?
A commercial registered agent is a person or business entity you pay to provide the service. If you represent yourself, choose non-commercial registered agent on any forms where the qualifier is requested.