How to start an LLC in North Carolina
North Carolina is one of the easiest states to start an LLC in. There are only a few simple steps you need to do when starting an LLC here.
Create a name for your NC LLC
A name is arguably the most important part of your LLC. It needs to be catchy to attract many people to your business, while simultaneously being legitimate for legal purposes.
What does my name need?
When it comes to a catchy name, your imagination needs to do the thinking. But there are some legal basics to keep in mind:
- Your business must have the words limited liability company or some abbreviation of this in it
- The name cannot contain restricted words like bank or doctor without being approved first
- Your name should be distinguishable from any other trade name registered in the state.
What do I do after I’ve decided?
Firstly you need to check if your name is available. If it is, we also recommend checking if there’s a decent URL available for it and buying it, just in case you want to open a website now or later.
Get a registered agent
What is a registered agent?
A registered agent is a person or a service that’s responsible for receiving important legal documents on your behalf, as well as service of process notices. They aren’t very expensive, and North Carolina even gives you the option to be your own registered agent.
What should I keep in mind if I want to be my own registered agent?
- You’ll need to maintain normal 9-5 business hours at one specific location
- Your personal address will be made public if you work from home
- You have the responsibility of keeping up important notices, dates and deadlines
If you’re leaning towards actually hiring someone, we recommend hiring a formation service as your registered agent. Often they give a year of registered agent service free when you do so.
File your NC Articles of Organisation
The Articles of Organisation officialise your LLC by putting it on paper. You can do this on your own, with a lawyer or with the help of a formation service. The filing fee if you decide to do it on your own is $125. It can be done by hand and sent in mail to the North Carolina Secretary of State, or can be done online using the NC Secretary of State website.
How long does it take to officiate your LLC?
Processing time for your Articles of Organisation is around 2 weeks, but for an extra fee you can expedite this.
Get an EIN
An EIN (Employer Identification Number), or one of the variations of it: a FEIN or a FTIN, is a unique number that identifies your company. You can apply for an EIN by phone, fax, mail or online on the IRS website. The online process is recommended as it is much faster than the others.
Why do I need an EIN?
An EIN is very useful for many things in your business, like:
- Hiring employees
- Filing federal and state taxes
- Opening a business bank account (so that you can keep your personal and business funds entirely separate from each other)
Create an Operating Agreement
In NC, Operating Agreements aren’t technically compulsory. However, we strongly recommended getting one as it is the only official way for you and your members to completely define your roles and lock down your LLC’s management and ownership structure. It’s also useful as it is something that you can return to when a dispute arises in the company, or a lawsuit comes from outside.
What are some basics I should have in my Operating Agreement?
- Each member’s responsibilities
- How new members can join
- How existing members can terminate or transfer their membership
- How profits and dividends can be distributed
TRUiC has a more detailed formation process explanation on how to set up an LLC in North Carolina. Visit their site for more.