The State of North Carolina LLC Act & General Statutes Section 57C-3-04

By Heather Frances J.D.

Limited liability companies are popular business structures because they provide liability protection for the owners, called members, while avoiding some of the restrictions of corporations. But rules regarding LLCs vary by state. North Carolina’s Limited Liability Act, located in Section 57C of the North Carolina General Statutes, governs LLCs in North Carolina. Article 3, in particular, addresses the membership and management of LLCs in the state. The state allows members to manage their LLC themselves or hire non-owner managers instead.

Management Structure

North Carolina LLCs must file articles of organization with the Secretary of State in order for the organization to be recognized as an LLC. Members can specify their management structure in these articles of organization, or they can create a separate document called an operating agreement. Frequently, LLCs opt to put minimal information in the articles of organization while putting more detailed plans for running the LLC in the operating agreement, since the operating agreement does not have to be filed with the state. For example, operating agreements can specify how the members plan to choose managers, how many managers there will be and how managers can be removed.

Access to Information

Section 57C-3-04 of North Carolina’s Limited Liability Act specifically addresses members’ access to information, including records. Each member has the right to obtain records from the LLC, though the articles of organization or operating agreement can set reasonable limits on accessibility. A member’s demands for information must be reasonable and related to the member’s interest as a member. For example, if spouses are both members of an LLC, one cannot demand information from the LLC for the sole purpose of using it against the other in a divorce. Generally, these records will already be in writing, but North Carolina permits LLCs to maintain records in other formats if the alternative format is capable of being converted into written form within a reasonable time. For example, an LLC could keep audio recordings of meetings if they are able to be transcribed in a reasonable amount of time.

File a DBA for your business online. Get Started Now

Records Available

Unless otherwise specified by the LLC’s articles of organization or operating agreement, members can request certain information specifically listed in the statute. This includes information about the status and financial condition of the business, business’s tax returns for each year, list of the names and addresses of each member, articles of organization, operating agreement, any powers of attorney granted by the business, and information about assets contributed by each member. If the LLC fails to keep records as required by this statute, articles of organization or operating agreement, it could face liability. However, such a failure does not allow anyone to come after a member’s personal assets.

Requesting Information

All member requests for information must be placed in writing, made in good faith and for a proper purpose, and specifically describe the purpose and information requested. The request must be specific so the person fulfilling the request can retrieve the correct records. The LLC’s managers, who may also be members, have the right to keep certain information confidential for a reasonable period of time if disclosure of the information is not in the best interests of the company. For example, the manager could withhold trade secrets that could damage the company if made public.

File a DBA for your business online. Get Started Now
Illinois LLC Operating Agreement


Related articles

Can I Change an LLC From Members to Managers?

A limited liability company is an independent legal entity formed under your state’s laws. If you choose to organize your business as an LLC, you must also decide whether your LLC should be managed by its members or by non-member managers. While it can be a hassle to alter this decision later, you can change your management structure after you start your business.

How to Add a Member to an LLC Company

A limited liability company, or LLC, is managed like a partnership rather than through a regulatory framework. It requires the consent of the partners, known as members, to accomplish anything. Members can execute an operating agreement to govern the procedure for making most decisions, but an operating agreement is optional in most states. Some states have default provisions in their Limited Liability Company Acts that dictate how certain situation are to be handled if an LLC hasn't formally adopted an operating agreement. The addition of new members falls under these default provisions.

How to Locate Members of an LLC

An LLC, or limited liability company, may operate under any name allowed or authorized by the state in which it is formed. The name chosen often will not include or even give a clue as to the names of its members. You will sometimes be able to find the names of an LLC's members by doing an Internet search.


Related articles

Federal Requirements for a Nonprofit LLC

An LLC, or limited liability company, is a form of legal entity that has more flexibility in its operations than a ...

How to Omit a Member of an LLC

Since business relationships don’t always work out as planned, it may become necessary to terminate certain ...

Regulations for a Single-Member LLC in Virginia

For an individual starting a business in Virginia, it is important to understand the regulations concerning limited ...

Who Does a LLC Have to Show Financials To?

Keeping accurate accounting records is part of your responsibility as an owner of a limited liability company. Using ...

Browse by category
Ready to Begin? GET STARTED