A North Carolina limited liability company (LLC) offers entrepreneurs the advantages of limited liability and flexible tax treatment without the sometimes burdensome paperwork requirements of a traditional corporation. While the decision of whether or not to form an LLC is best made in conjunction with an attorney licensed to practice in North Carolina, the actual formation process is relatively accessible to the lay public.
Fit your business needs with the right LLC package
Pick a name for the LLC. The name must not be in use by any other company, and it cannot contain any suggestion that it is organized for an illegal purpose or to promote illegal activity. State law also prohibits the use of words relating to the provision of certain services unless the LLC will be qualified to provide those services. Include "LLC" or some recognizable abbreviation of "limited liability company" in the name. After deciding upon a name, check with the secretary of state to ensure that another company has not already registered the name. Also perform a telephone book, Internet and register of deeds search.
Draft your articles of organization. In North Carolina, the articles must contain the company name, the name and address of each person organizing the LLC, an identification of each initial owner, who is known as a member, the address of the principal office, the registered office and registered agent for service of process and the names of the LLC managers if these will be different from the members. Articles of organization may, but are not required to, state a dissolution date and include any provision that could be contained in an operating agreement.
File the articles of organization with the secretary of state in Raleigh by mail or in person and pay a fee, which as of 2010, is $125. Provided that your articles conform to the law, the office will stamp the filing and return a copy to you by electronic or regular mail. The mailing address for the Corporations Division of the North Carolina Secretary of State is P.O. Box 29622, Raleigh, NC 27626. If you wish to file in person, the physical address is 2 South Salisbury Street, Raleigh, NC, 27601. Include a cover sheet for all corporate filings, the form for which is available on the secretary of state website (see Resources).
Prepare your written operating agreement, even if you will be a sole member. Although not required by law in North Carolina, operating agreements, akin to corporate bylaws, set forth the internal rules for running the company. Having an operating agreement and adhering to its requirements helps preserve the limited liability shield in the event of a lawsuit. Have an attorney prepare your operating agreement or purchase an appropriate form from a reputable source.
Hold an organizational meeting to appoint any new members or managers and fix the start and end dates for your company's fiscal year. Contact the North Carolina Department of Revenue and the IRS to obtain Taxpayer Identification Numbers for your LLC. Finally, contact the Business ServiCenter of the North Carolina Department of Commerce to guide you through obtaining any permits necessary to begin operations.
References & Resources
- North Carolina Secretary of State: Organizing Your Limited Liability Company In North Carolina.
- 18 NCAC 4.0502: Words Prohibited In Addition to Statutory Prohibitions.
- 18 NCAC 4.0503: Deceptively Similar Names.
- NCGS Sec. 57C-2-21: Articles of Organization.
- NCGS Sec. 57C-2-20: Formation.
- North Carolina Department of the Secretary of State Official Website.
- Jupiterimages/Brand X Pictures/Getty Images