If you’re thinking about how to start an LLC in NC, you have picked the right location. The state recently ranked No. 2 in a list of top places for starting a business. North Carolina’s business economy has grown substantially thanks to its focus on technology, science and innovation. The state has increased its innovation ranking four spots over the last few years, and as of June 2022 ranks 20th. Here, you’ll find a seven-step guide to help you become part of this wave of growth and form an LLC in NC.

If you want to choose an LLC as your business structure, you will need a name for your business. You should choose a name that is distinguishable from other business names in the state of North Carolina. You can check to make sure your name is unique on the Secretary of State website.

The name you select must also include “limited liability company” or LLC/L.L.C. For example, if you want to start a plant business and the name of your company will be “ABC Plants” the business name must be either “ABC Plants, Limited Liability Company,” “ABC Plants, LLC” or “ABC Plants, L.L.C.” You can find a complete list of naming guidelines on the NC legislature website.

Lastly, you should do a general online search for your business name to make sure it is available outside of North Carolina. This will help you obtain a URL so that others cannot use it. You can do an online search for domain availability search engines where you may be required to pay a fee to register your URL.

A registered agent is the person or business who is the point of contact for your LLC. The agent will be responsible for receiving important documents like notice of lawsuits, information from the Secretary of State, or tax forms. In order to comply with state law, North Carolina LLCs require a registered agent.

The registered agent must be able to conduct business in North Carolina, be over the age of 18 (if an individual is selected) and maintain a street address in NC. One option to choose a registered agent service, which is a third-party provider that accepts legal notices and correspondence on behalf of your business entity.

In order to register your LLC in NC, you must file articles of organization with the Secretary of State. The articles of organization will lay out the purpose of the LLC, the rights and powers of the members, the obligations between the members and the company and the liabilities of the members and LLC. For a NC LLC to organize, the articles must include:

• The name of the LLC
• The name and address of each member signing the articles
• The name and address of the registered agent
• The address and phone number of the LLC
• The effective date of the articles
• The signature of a member, organizer or representative

The articles of organization may be filed online with the Secretary of State or by mail and the filing cost as of June 2022 is $125.

In NC, while an operating agreement is not required, it is a good idea to have one. Although the agreement does not have to be filed with the state, it is a legal document and can be used to limit the amount of conflict between members as it lays out each member’s duties.

The LLC operating agreement will detail the structure of your LLC and establish each member’s (also known as co-owners) percentage of ownership in the LLC, profits, losses, rights, responsibilities and voting powers. The operating agreement is also the place to dictate what happens if a member should leave the LLC.

Finally, the operating agreement should note whether your NC LLC is a member-managed LLC or a manager-managed LLC. The difference between the two is simple:

• Member-managed: The members listed in the articles of organization jointly run the company’s operations.
• Manager-managed: The members will appoint one or more managers to handle the day-to-day operations of the LLC.

One thing you will need if you are considering how to start an LLC in NC is an employment identification number (EIN). This is a federal number assigned by the IRS that will identify your business for tax purposes. You can complete an online registration form for free to get your EIN.

An important factor to keep in mind while researching how to start an LLC in NC is that you will need to open a bank account and obtain business insurance. A bank account is important so that the business finances are kept separate from the members’ personal financial accounts. This will help keep finances organized for tax purposes and protect your personal assets in case of a lawsuit. Another important reason to open a business bank account is so that your LLC can borrow money as an organization and your own personal credit will not be jeopardized.

You should also get business insurance for your NC LLC the same way you would obtain insurance for your home. There are several types of insurance you might want to consider for your LLC including:

• General Liability Insurance: This insurance will cover damages and attorney’s fees if anyone is injured on your property.
• Commercial Property Insurance: In the event your property is damaged, this insurance will protect it.
• Professional Liability Insurance: This will provide coverage for professionals like doctors or lawyers who may be sued for malpractice.

Every year your LLC will need to file an annual report with the North Carolina Secretary of State’s office. You can file this report online for $202 or by mail for $200. The annual report keeps your LLC in good standing and updates any changes to the company’s address or member names. Complying with the requirement to file annually is important because you don’t want to risk the chance of forfeiting your LLC’s registration or its license to operate.

Setting up an LLC can be a great way to organize your company, protect your personal assets and allow you to work with multiple co-owners. These steps should get you started on how to start an LLC in NC, but you can simplify the process today with an affordable online LLC formation service.

Legal Disclaimer: This article contains general legal information but does not constitute professional legal advice for your particular situation and should not be interpreted as creating an attorney-client relationship. If you have legal questions, you should seek the advice of an attorney licensed in your jurisdiction.

Getting your LLC off the ground in North Carolina is the first step, but if you’re looking to expand, it might help to understand the formation process in other states. Read more about this, and related topics, by checking out these helpful guides from the MarketWatch Advisor Legal Team: