How to Form an LLC in North Carolina 2026: Complete Guide

North Carolina offers a strong business environment with a diversified economy, skilled workforce, and strategic East Coast location. Forming an LLC in NC provides liability protection and tax flexibility with straightforward filing procedures. This guide covers everything from choosing a name to maintaining annual compliance with North Carolina's LLC requirements.

Why Form an LLC in North Carolina?

• Limited Liability Protection: Personal assets protected from business debts and lawsuits
• Pass-Through Taxation: Avoid double taxation (LLC doesn't pay federal income tax)
• Flexible Management: Member-managed or manager-managed structure
• Strong Economy: Diversified with banking, tech, biotech, and manufacturing
• Business-Friendly: Research Triangle, Charlotte financial hub, growing startup ecosystem
• Moderate Costs: $125 filing fee, $200 annual report
• Online Filing: Streamlined electronic filing available

Step-by-Step Formation Process

Step 1: Choose Your LLC Name

Your North Carolina LLC name must comply with N.C. Gen. Stat. § 57D-2-02:

• Be distinguishable from existing NC business names
• Include "Limited Liability Company," "LLC," "L.L.C.," or "Limited Company" (not "Ltd.")
• Not contain restricted words ("bank," "insurance," "trust") without proper licensing
• Cannot imply government affiliation
• Cannot be misleading or deceptive

Name Search: Check NC Business Name Search

Name Reservation (Optional):

• Reserve name for 120 days
• File Application to Reserve LLC Name (Form L-03)
• Fee: $30
• File online or by mail

Step 2: Designate a Registered Agent

Every North Carolina LLC must have a registered agent (N.C. Gen. Stat. § 57D-1-22):

• Has physical North Carolina street address (no P.O. boxes)
• Available during normal business hours
• Can be an individual NC resident OR business entity authorized in NC
• Receives legal documents, official correspondence, and service of process

Options:

• Self-serve: You can be your own registered agent if NC resident
• Professional Service: Hire registered agent company ($125-$300/year)
• Benefits of professional: Privacy, reliability, avoid missing legal documents

Step 3: File Articles of Organization

Submit Form L-01 (Articles of Organization) to North Carolina Secretary of State:

Filing Options:

• Online: NC Secretary of State (5-7 business days) - $127 (includes $2 processing fee)
• By Mail: Send to Raleigh office (10-15 business days) - $125
• Expedited 24-Hour: Additional $100 fee
• Same-Day Service: Additional $200 fee

Required Information:

• LLC name
• Registered office address (NC street address)
• Registered agent name and address
• Mailing address (if different from registered office)
• Organizer name and signature
• Principal office address
• Effective date (if delayed start desired)

Step 4: Create an Operating Agreement

While not required to be filed with the state, an operating agreement is strongly recommended:

• Defines ownership percentages and capital contributions
• Outlines management structure (member-managed vs. manager-managed)
• Profit and loss distribution rules
• Voting rights and procedures
• Buy-sell provisions and transfer restrictions
• Dissolution and termination procedures
• Helps establish LLC as separate legal entity
• Required by most banks when opening business accounts

North Carolina Considerations:

• Address member/manager duties under N.C. Gen. Stat. § 57D-3
• Specify distributions and allocations
• Include indemnification provisions

Step 5: Obtain an EIN

Get free Employer Identification Number from IRS:

• Online: IRS.gov (immediate) - recommended
• By Fax: 4 business days
• By Mail: 4-6 weeks

When Required:

• Multi-member LLCs (always required)
• Opening business bank account
• Hiring employees
• Filing tax returns
• Single-member LLCs can use SSN, but EIN recommended

Complete Cost Breakdown

Ongoing Requirements

Annual Report (Required)

North Carolina requires an annual report (N.C. Gen. Stat. § 57D-2-21):

• Fee: $200 per year ($202 if filed online)
• Due Date: April 15th annually
• First Report: Due the year after formation (by April 15)
• How to File: Online through NC Secretary of State (recommended)
• Information Required:
  • LLC name and file number
  • Registered agent and office address
  • Principal office address
  • Names and addresses of managers/members
• Late Filing: After April 15, subject to dissolution

Update Changes

If your registered agent, registered office, or members/managers change:

• File Statement of Change (Form L-07) for registered agent/office changes
• Fee: $25
• Update through annual report for member/manager changes
• File amendments (Form L-05) for name or Articles changes - Fee: $50

Tax Obligations

• Federal Taxes: File Form 1065 (multi-member) or Schedule C (single-member)
• North Carolina Income Tax: Pass-through to members (NC individual tax rate: 4.75% as of 2026)
• NC Sales Tax: Register with NCDOR if selling goods or taxable services
• Franchise Tax: North Carolina does NOT have franchise tax for LLCs
• Employer Taxes: If you have employees (unemployment, withholding)

North Carolina Tax Requirements for LLCs

State Income Tax

LLCs in North Carolina are pass-through entities:

• LLC itself does NOT pay NC income tax at entity level
• Profits pass through to members
• Members report on personal NC tax returns (Form D-400)
• Multi-member LLCs file informational return (Form D-403)
• NC individual tax rate: 4.75% (flat rate as of 2026)

Sales and Use Tax

• Register with NC Department of Revenue if selling taxable goods/services
• State sales tax rate: 4.75%
• Local rates: up to 2.75% (total combined rate typically 6.75-7.5%)
• File monthly, quarterly, or annually depending on sales volume
• No fee to register for sales tax permit

No Franchise Tax

Good news for NC LLCs:

• North Carolina eliminated franchise tax for LLCs
• Corporations still pay franchise tax, but LLCs are exempt
• One of NC's competitive advantages for LLC formation

Business Licenses and Permits

State-Level

• No general state business license required in North Carolina
• Industry-specific licenses may be needed (contractors, healthcare, food service, etc.)
• Check NC Department of Revenue for industry requirements

Local Level

• City/County Business License: Required in many NC municipalities
• Business Privilege License: Annual license based on gross receipts
• Zoning approval: May be required depending on location and business type
• Health permits: For food service, healthcare facilities, etc.
• Contact local city hall or county clerk

Professional LLCs

North Carolina allows certain licensed professionals to form Professional LLCs (N.C. Gen. Stat. § 57D-6):

Who Must Form Professional LLC

• Attorneys
• Physicians and healthcare providers
• Dentists
• Veterinarians
• Architects
• Engineers
• Accountants
• Chiropractors
• Optometrists
• Psychologists

Additional Requirements

• All members must be licensed in same profession
• Name must include "P.L.L.C." or "Professional Limited Liability Company"
• May require approval from licensing board before filing
• Does not shield from malpractice liability
• Same filing fee ($125) and annual report ($200)

Operating an Out-of-State LLC in North Carolina

If formed in another state but doing business in NC, must register as foreign LLC:

When Required

• Maintaining an office in North Carolina
• Regularly conducting business in North Carolina
• Owning or leasing real property in North Carolina
• Hiring employees in North Carolina

Foreign LLC Registration

• File Form L-09 (Application for Certificate of Authority)
• Fee: $125 ($127 online)
• Designate NC registered agent
• Submit Certificate of Good Standing from home state (within 90 days)
• Annual report fee: $200 (same as domestic LLCs)

Series LLCs

North Carolina does NOT currently allow Series LLCs.

If you need series structure, consider:

• Forming in Delaware, Texas, Nevada, or other states allowing Series LLCs
• Creating separate NC LLCs under holding company structure
• Consult attorney for asset segregation strategies

Dissolving a North Carolina LLC

To officially close your NC LLC:

1. Vote to Dissolve: Members approve per operating agreement (or per statute)
2. Wind Up Business: Pay debts, settle claims, distribute remaining assets
3. File Articles of Dissolution: Form L-06 with Secretary of State
4. Fee: $30
5. File Final Tax Returns: Federal (1065/Schedule C) and NC (D-403/D-400)
6. Cancel Business Licenses: State and local
7. Cancel EIN: Notify IRS
8. Close Bank Accounts: After all obligations paid

Frequently Asked Questions

How long does it take to form an LLC in North Carolina?

Online filings typically process within 5-7 business days. Mail filings take 10-15 business days. You can pay for expedited 24-hour processing ($100 additional fee) or same-day processing ($200 additional fee) if you need faster approval.

Does North Carolina have an annual report for LLCs?

Yes. North Carolina requires an Annual Report due by April 15th each year. The fee is $200 ($202 if filed online). This report is required every year and includes basic information about your LLC's registered agent, principal office, and members/managers. Failure to file results in administrative dissolution.

Do I need a North Carolina address to form an NC LLC?

Yes, you need a North Carolina registered agent with a physical NC street address. However, your principal place of business can be anywhere. If you're out of state, you'll need to hire a North Carolina registered agent service to provide the required NC address.

Can one person form an LLC in North Carolina?

Yes. North Carolina allows single-member LLCs. The process is identical to multi-member LLCs, and you still get full liability protection. Single-member LLCs are taxed as disregarded entities (sole proprietorships) for federal tax purposes unless you elect corporate taxation.

How much does it cost to maintain an NC LLC?

The annual report fee is $200 ($202 online) every year by April 15th. If you use a registered agent service, add $125-$300/year. North Carolina has NO franchise tax for LLCs (unlike corporations). You may also have city/county business license fees depending on your location.

What happens if I miss the annual report deadline in North Carolina?

If you don't file your annual report by April 15th, your LLC becomes subject to administrative dissolution. North Carolina will send a notice giving you opportunity to file before final dissolution. However, it's important to file on time to avoid dissolution proceedings and potential reinstatement fees.