North Carolina LLC Registration: Everything You Need to Know
North Carolina LLC Registration is a straightforward process that nonetheless can be troubling to the unprepared. 3 min read
North Carolina LLC Registration is a straightforward process that nonetheless can be troubling to the unprepared. LLCs, or limited liability companies, are constructs of state law offering legal and tax protections to companies who file with the state. Since an LLC is a state construct, which state you file your LLC in is a key factor to its success, and North Carolina has its own unique requirements for you to obey.
The LLC Advantage
Though no one likes to think about it, liability issues are one of the most important things a company has to deal with. Although most people in the business world go about their professions without intending harm on anyone else, incidents occur, and the courts act as a venue to resolve those issues. When a company is dealing with liability, its organizational structure will help determine just how exposed it is.
Sole proprietorships and partnerships are the most straightforward company filing statuses. These kinds of companies are relatively simple to create and maintain, and have the advantage of not usually facing any additional taxation; company revenues “pass through” and count as income for the owners. But any legal penalties assessed against the company can count the assets of the owners as assets of the company, an unfortunate situation that can put personal property at risk.
Corporations solve the liability issue. A corporation consists of shares, distributed among some number of owners referred to as shareholders. The corporation counts as a human being for legal purposes, so any lawsuit against the company can only consider the assets of the company and not those of the shareholders. But a corporation pays a special “corporate tax” on its income, meaning the owners pay twice, once when the corporate tax is assessed and again when the profits are distributed to the shareholders.
An LLC is a state status that offers similar liability protection to a corporation, though jurisdictional issues may require the company to file as an LLC in multiple states if it operates in them all. But an LLC doesn't have to file as a corporation, and as such can avoid the corporate tax — though LLC status is not recognized by the IRS.
LLCs in North Carolina
Forming an LLC in North Carolina is fairly easy. You just need to follow some simple steps.
- Meet requirements for names and organization.
- File forms with the Secretary of State.
- Have a local agent.
- Pay your fees.
First off, naming the company. You might already have some strong ideas about what you want to call your business venture, but it's always worth taking a moment to consider options. You cannot use a name that is too similar to another company unless that company gives you written permission to do so, so try to come up with something unique. It will also need to include either the words “limited liability company,” “Ltd. Liability Company,” or “Ltd. Liability Co.,” or the abbreviation “L.L.C.” or “LLC.” The name cannot indicate the business works for a purpose contrary to that on its articles of organization. There is also a short list of words you cannot use in the name. If you are worried about the name, you can pay $30 to reserve it for 120 days, though you cannot renew the reservation.
Next is the paperwork, primarily the Articles of Organization. This document explains what your company is called and what it will do. It needs to include your company's name, a list of members, an address to the main office of the company, and the information for a local registered agent, someone living in the state to whom the government can serve paperwork and process when needed. This can be a member of the company, a friend or family member, or an agency.
Your fees will include the $30 name reservation fee as well as a $125 state filing fee. You have the option to pay more for internet registration, 24 hour processing, or same-day processing. You will also have to file an annual report every year describing how your company is doing along with a $200 fee.
If you need help with filing your own North Carolina LLC, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.