How Much Does an LLC Cost in North Carolina (Fees Explained)
Forming a Limited Liability Company in North Carolina involves more than filing the necessary paperwork; however, it doesn't have to be as costly as you may assume.
As a specialist in Mergers and Acquisitions, I have assisted numerous businesses and individuals in establishing their LLCs across different states.
In collaboration with state business professionals, we dedicated weeks to meticulously researching and analyzing the expenses associated with the fundamental requirements for forming an LLC in North Carolina.
Quick Summary
- An LLC in North Carolina costs $125 to file the Articles of Organization.
- Once the LLC has been approved, additional expenses include a registered agent service, business licenses and permits, annual report filing fee, operating agreement, taxes, and other pertinent documents.
- According to the North Carolina Secretary of State, approximately 60% of new businesses take advantage of the $30 business name reservation, valid for 120 days, to secure their preferred name.
- Based on my experience, I can attest that North Carolina has a reliable economic environment and fiscal stability.
Cost to Start an LLC in North Carolina
When forming an LLC in the state, there are certain mandatory fees and optional costs that you must cover. These include the following:
1. LLC Formation Filing Fee ($125 - Mandatory)
To officially create your NC LLC, you must file and pay a filing fee of $125 for your Articles of Organization.
You can submit these via the North Carolina Secretary of State website, mail them in, or visit the office in person [1].
According to the North Carolina Secretary of State, approximately 75% of LLC filings are conducted online, reflecting a strong preference for the convenience and speed of digital submissions.
The state offers expedited service, which shortens the processing period to 24 hours or 1 business day. In my experience, my application was reviewed and approved within the same day, and I only had to pay a $200 accelerated fee.
2. Registered Agent Service Fee ($80-$300 – Optional)
You can appoint a member to be a registered agent or employ the services of a professional. If you intend to hire one, a registered agent service costs around $80 to $300.
North Carolina has specific regulations for their registered agents as outlined in N.C. Gen Stat § 55D-304 [2].
Your appointed North Carolina registered agent must have the following:
- A physical address of the registered agent within the state
- Must be available during regular business hours to accept legal mail on behalf of your LLC
- The registered agent must be a North Carolina resident
3. Name Reservation Fee ($30 - Optional)
When setting up North Carolina LLCs, you can secure a business name for just $30.
This reservation is valid for 120 days and requires submitting an Application To Reserve A Business Entity Name to the Secretary of State [3].
According to the North Carolina Secretary of State, around 60% of new businesses utilize this reservation feature, ensuring their desired name's availability while they complete the setup process.
I was able to submit it online with a $2 electronic transaction fee.
To determine whether a name is available, it is advisable to look up a North Carolina LLC before reserving it.
Learn how to change an LLC name in North Carolina, if you have to.
Expenses Following the Approval of Your LLC
Here are the following expenses you may have to cover after your LLC has been approved:
1. Business License (Depending on Line of Business - Mandatory)
The North Carolina Department of Revenue requires all businesses operating in the state to acquire a Certificate of Registration, which functions as an official license to collect sales tax.
This service is free of charge, and there are two simple ways to apply: online or by mail.
Registering online with the NC DOR only takes moments; alternatively, you can print out a Business Registration (NC-BR) application, fill it out, and post it in Raleigh for processing [4].
2. Annual Report Fee ($203/Online - $200/Paper – Mandatory)
LLCs in North Carolina are required to file an annual report every April 15th of each year. It costs $203 for online submissions and $200 for paper filings.
I always remind my clients to file on or before the due date to avoid state-imposed penalties.
3. Operating Agreement (Optional, but Recommended)
An Operating Agreement for any LLC based in North Carolina is an essential document that outlines ownership, management, and distribution of profits among all members. In essence, it serves as a binding contract between members within the company.
Whenever I help clients form LLCs, I always advise them to consult an attorney to draft the operating agreement on their behalf to ensure its legality.
However, if you are on a budget, you can avail of an online template from LLC formation services, which costs around $100 to $200.
4. Taxes (Mandatory)
The wide range of North Carolina LLC taxes that a business owner must be responsible for results in a yearly cost variance.
LLC owners must pay taxes on the following:
- Federal taxes
- State income tax
- Local income tax
- Business taxes
- Self-employment taxes
- Sales and use tax
- Payroll tax (if you have employees)
- Property tax (if the LLC owns the property)
Your North Carolina LLC taxes will vary depending on your sector and the amount of business activity, so it is impossible to give you an exact figure. Each enterprise has its own specific situation that dictates what taxes are applicable.
The amount of tax your LLC pays hinges entirely on how much revenue your company generates.
5. DBA Name ($26 - Optional)
The term "assumed business names" (DBAs) is used in North Carolina. No matter which county you are registering it in, each registration fee remains at $26.
Before proceeding with any filings, I check both the "Assumed Business Name" and "Business Registration" databases to ensure that my clients’ preferred names are still available.
"A DBA, also known as a Trade Name, Fictitious Name, Assumed Name, or Fictitious Business Name, refers to the same concept."
- Jon Morgan, CEO, Co-Founder & Editor-in-Chief of Venture Smarter
6. Certified Copies Of Business Documents ($12 + $1 per additional page - Optional)
LLC owners may need or desire certified documents of essential papers they have registered with the state.
The great news is that you can order these records online in North Carolina. They are processed immediately for a fee of $12 per document plus an additional charge of $1 per page.
If sent by mail, it will take up to five days for processing after receipt at $15 for each document and a further expense of one dollar per page.
7. Certificate Of Good Standing ($12/Online - $15/Mail - Optional)
You can acquire a Certificate of Good Standing (Certificate of Existence) online for just $12 - typically takes under 24 hours once requested - or through mail submission at $15 but requires up to seven days until processing.
When clients ask about the importance of obtaining one, I tell them that a Certificate of Good Standing demonstrates that the LLC is compliant with all state regulations and fees.
8. EIN ($0 - Optional but Recommended)
An Employer Identification Number (EIN)is necessary for business-related activities, from filing business income taxes and establishing LLC bank accounts to hiring employees.
Obtaining an EIN for your LLC doesn't have to cost you a dime. Filing online is free and only takes minutes.
9. Business Insurance Premiums (Optional but Recommended)
Consider budgeting for workers' compensation insurance if your LLC has at least three full-time employees. Of course, this rule has some exemptions, such as independent contractors, LLC members, and seasonal staff working full-time.
I persuade clients, especially those whose business operates in an industry that is considered hazardous – like roofing or tree trimming, to obtain business insurance.
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FAQs
Are There Penalties For Paying My Fees Late In North Carolina?
There are penalties for paying your fees late in North Carolina. You can fall out of good standing and be subject to a $200 fine if your LLC is eight days late. The state may also administratively dissolve the LLC, and you must re-register it with the state.
How Much Does It Cost To Register A Foreign LLC In North Carolina?
It costs $250 to register a foreign LLC in North Carolina. Submit your Application for Certificate of Authority to the North Carolina Secretary of State and pay a $250 filing fee ($3 if chosen online).
References:
- https://www.sosnc.gov/divisions/business_registration/business_creation_home
- https://www.ncdor.gov/taxes-forms/business-registration/online-business-registration
- https://www.sosnc.gov/documents/forms/Business_Registration/business_Entities_common/application_to_reserve_a_business_entity_name.pdf
- https://www.ncdor.gov/taxes-forms/business-registration/online-business-registration
