How to Start an LLC in North Carolina: A Comprehensive Guide

The freedom and satisfaction of entrepreneurship is what draws many to open up their own business—and North Carolina’s supportive ecosystem makes it an ideal place to do so.

We’ll be going over why you should consider forming an LLC in North Carolina, how to start an LLC there, and other important information to ensure your success in the state.

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Benefits of Forming an LLC in North Carolina

If you were to think about the top states for doing business in the US, it’s likely that many of us would think of states like New York and California. However, CNBC’s annual ranking of America’s Top States for Business shows that North Carolina took the crown two consecutive years in a row, in 2022 and 2023. In 2024, although it didn’t make first place, it still finished a close second to Virginia.¹

Here are some reasons why North Carolina is a great place to form an LLC:

Steps to Form an LLC in North Carolina

While each state follows a similar path to forming an LLC, North Carolina LLC formation will have a few nuances to consider. Here is a general overview of the typical steps you’ll want to follow.

Choose a Name for Your LLC

According to the Secretary of State, there are a few legal requirements related to name selection. For instance, the name shouldn’t state or imply that it is set up for anything illegal or for non-permitted purposes. It also has to be distinguishable from other businesses currently on the registry and, of course, not contain offensive words.

Your company name also has to contain either the words “limited liability company,” the abbreviation LLC, or some other variation of the term.⁵

Appoint a Registered Agent

One North Carolina LLC requirement is to appoint a registered agent. The registered agent can be anyone, including a member of your LLC or a business entity. They become tasked to receive official documents on behalf of the LLC, such as tax notices and legal papers. It’s important because these notifications and documents are essential for your business to run smoothly and compliantly, as well as avoid penalties or fines.

In North Carolina, a registered agent needs to agree to act as your registered agent and either reside in North Carolina or be a domestic or foreign nonprofit, LLC, or corporation registered on the North Carolina Business Registry, is authorized to do business in the state, and has the same business office address as the registered office address.⁶

File Articles of Organization

All LLCs need to file what’s called the Articles of Organization, which is a form used to register an LLC. Filing one costs a one-time fee of $125 in the state, and requires you to fill out basic information like the name of your LLC, the members or organizers of the company, office information, and other contact information. The Secretary of State has this readily available as a PDF file on the website.

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Create an Operating Agreement

Although North Carolina doesn’t legally require LLCs to have an operating agreement, they are highly recommended for several reasons:

• Defines roles and responsibilities: It helps you and other members of the LLC clearly define your duties, contributions, and decision-making rights so you avoid any arguments and conflict down the road.
• Avoids using state default rules: Every state has its own default laws, but an operating agreement lets you establish and customize your own terms for how your business conducts itself.⁷
• Improves business credibility: Having an operating agreement at all demonstrates to banks and other partners that your LLC has structure and takes governance seriously.
• Protects your LLC status: A formal operating agreement can help further distinguish between personal and business. Legal systems and laws are complex, and a court can potentially hold owners personally liable for business debts in certain cases.

Obtain an EIN (Employer Identification Number)

If you’re a single-member LLC with no employees, you won’t need an Employer Identification Number. However, for multi-member LLCs or single-member LLCs with employees that choose to be taxed as a corporation, or those that choose to file excise tax returns, you’ll need an EIN.⁸

Cost to Form an LLC in North Carolina

The cost to form an LLC in North Carolina isn’t overly costly, with some costs applying only if you’re a foreign business corporation. Here’s a quick breakdown of the main costs:⁹

Maintaining Your North Carolina LLC

Once your LLC is established, this doesn’t mean leaving it to its own devices. LLCs, like any other business, need to be monitored and carefully managed so you continue to stay compliant, have operations running like a well-oiled machine, and meet financial obligations.

File Annual Reports

Every year, your business must file an annual report with the Secretary of State. While it’s possible to file using a paper document, it can take up to 12 weeks for the report to be received and the data to be entered into the system. With that in mind, most businesses choose to file online for its immediacy. Annual reports are due on April 15th every year and cost $200, with an extra $3 transaction fee for electronic filing.¹²

If you forget to file your annual report on time, you risk having your business become dissolved. In this case, you will need to use the pre-populated annual report, provide a cover letter and a check, and mail your documents to the Secretary of State as soon as possible.¹³

Pay Required Fees

Other than the Annual Report filing fee, there will be a variety of other fees, such as your permit renewals, business license fees, and any recurring fees that’ll crop up during the year. Using an automated payment system or having a calendar or reminders in place will help you stay on top of these fees year after year. Businesses need to stay vigilant with their responsibilities so they don’t disrupt operations.

Comply with State and Federal Regulations

Your LLC doesn’t just need to comply with state regulations in North Carolina but also the wider federal regulations in place for LLCs. While we’ve covered the Annual Report, and licenses, permits, and taxes in the state, you’ll also need to brush up on the employment regulations if you have employees. For instance, the minimum wage is currently $7.25 an hour, and there are laws regarding tips.¹⁴ There are also plenty of other workplace rights that you must abide by as an employer.

At the federal level, you’ll need to file the proper federal tax forms and pay the right fees. If you have employees, you’ll also need to withhold and pay federal income tax, Medicare taxes (2.9%), and Social Security (12.4% total).¹⁵ There are also federal employment laws, including the Fair Labor Standards Act, anti-discrimination laws, the Occupational Safety and Health Administration, and more. The US Department of Labor takes workplace activities seriously, enforcing over 180 federal laws that protect employees and hold businesses accountable—so be sure to familiarize yourself with those applicable to your business.¹⁶

Frequently Asked Questions

How can I start an LLC in North Carolina as a non-resident?

Starting an LLC in North Carolina is possible by registering as a foreign LLC. To do so, you’ll need to file an Application for Certificate of Authority, which costs $250, and get a Certificate of Existence for $15.¹⁶ There are also circumstances where entities do not need to apply for a Certificate of Authority.

How much does it cost to start an LLC in North Carolina?

In North Carolina, the costs to form an LLC depend on whether you’re a foreign or domestic business corporation. For example, domestic LLCs only need to file an Articles of Incorporation to get started, which costs $125. Foreign LLCs, on the other hand, need to pay for an Application for Certificate of Authority and a Certificate of Existence, which cost $250 and $15, respectively. There are also other business startup fees to consider, including fees to hire a professional registered agent, business licensing and permit fees, and other taxes.

Do LLCs pay taxes in North Carolina?

North Carolina typically treats LLCs as pass-through tax entities, which means company income is split between the owners who will then report and pay taxes on their share on their personal income tax returns.

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