How Much Does an LLC Cost in North Carolina
From the $125 filing fee to a range of other expenses, read on to ensure you're financially prepared before creating an LLC in North Carolina.
 |
Here are the following fees to consider:
- Domestic LLC Formation Fee: $125
- Foreign LLC Formation Fee: $250
- Annual Report Fee: $200
- Business Permits and Licenses: $0 to $500+
- Business Taxes: 4.5% / up to 7.5%
- Optional Fees: $0 to $3,000+
Despite common misconceptions, the total cost of forming an LLC in North Carolina goes beyond just the $125 LLC formation filing fee.
Other costs should be considered before starting an LLC in the Tar Heel state. Mandatory expenses include the annual report filing fee and business permits.
Plus, a long list of optional fees could increase your total expenses to more than $3,000. Read this comprehensive checklist of North Carolina LLC fees to prepare a more accurate budget.
Business Formation Service - $39 + State Fees
- Form Your LLC, Corporation, or Nonprofit Today
- A Fully-Formed Business
- Registered Agent Service
- Business Address
- Mail Forwarding
- Privacy by Default
Paying the LLC-related fees in North Carolina yourself instead of using LLC service providers will be most cost-effective. Choose to make payments online if it's an available option since they would typically cost you less. You can also be your LLC's registered agent and save up to $400.
North Carolina Domestic LLC Formation Fee
Cost: $125[1]
To form a domestic LLC in North Carolina, you must submit the Articles of Organization to the Secretary of State. You'll also pay a $125 filing fee to cover the administrative costs.
The Articles of Organization contain important information for the state to identify your company uniquely. This includes the business name, address, and description. Short descriptions like "coffee shop" and "bed and breakfast" are acceptable.
North Carolina's Secretary of State typically processes the Articles of Organization within 7 days after you file the documents. If you need your LLC formed faster, pay for expedited services.
North Carolina Foreign LLC Formation Fee
Cost: $250
If your LLC is already established in a different state and you want to expand your business to North Carolina, you need to register it as a foreign LLC.
Foreign LLCs in North Carolina must submit a Certificate of Authority to the Secretary of State. It typically takes longer to process a foreign LLC application (and twice the cost) compared to domestic LLC applications. In case you need it done quickly, paying for expedited services is also an option.
North Carolina LLC Annual Report Fee
Cost: $200[2]
All LLCs in North Carolina must submit an annual report. It updates your LLC's current information, including the business address and registered agent's name. The report also confirms that your business is still active.
Note that for foreign LLCs, you are not only paying this fee in NC. You also have separate reporting and fees to cover in your LLC's home state.
In North Carolina, the LLC annual report is due by April 15 yearly, starting the year after your business is formed.[2] The annual report can be filed online or by mail. If done online, there's an additional $3 electronic filing fee.
While there is no penalty fee for filing the annual report late in NC, your LLC's registered agent will receive a Notice for Grounds for Dissolution. If you fail to submit the annual report within 60 days after receipt of the notice, the state may shut down your LLC.[3]
North Carolina LLC Permits and Licenses
Cost: $0 - $500+
North Carolina does not have a general state-level business license. However, your LLC may need to get local business permits. The local business permit fees vary per city and could be renewable yearly.
The number of permits and licenses your LLC needs depends on its business purpose. Some businesses may be regulated simultaneously by various governmental offices.
A business permit is issued mainly to address safety concerns. On the other hand, a business license is typically given to those qualified to provide professional services, i.e. dental clinics and barbershops.
Such a license is often permanent but can be revoked for misuse, while a business permit is typically valid for a certain period.
North Carolina Business Taxes
Cost: 4.5% Individual Income Tax | up to 7.5% Sales Tax
LLCs are treated as pass-through entities for tax purposes. This means profits and losses are passed directly to members and reported on their tax returns.
In North Carolina, your earnings are subject to individual income tax.[4] Additionally, some municipalities collect local income taxes.
If your LLC in North Carolina sells products, you must collect a 4.75% sales tax. You can register online for a seller's permit. This is free of charge.
Additionally, all counties impose an additional local sales tax, which ranges from 2% to 2.25%. In Durham, Orange, Wake,and Mecklenburg counties, there is an additional 0.5% transit tax in addition to the 2% to 2.25% local sales tax. Hence, the highest sales tax rate you could charge is 7.5%.[5]
Consult with a tax advisor to determine the specific taxes that apply to your business. A qualified accountant could charge $300 yearly for a simple tax return. The fee is higher for more complex tax requirements.
North Carolina LLC Optional Fees
While the North Carolina LLC fees below are optional, you may need to pay for some depending on your business needs. For example, obtaining a Certificate of Existence is often necessary when opening a business bank account.
As you plan your budget for your new North Carolina LLC, remember to account for these potential additional expenses:
| North Carolina LLC Optional Fees | Cost |
|---|---|
| North Carolina LLC Expedited Services Fee | $100 or $200 |
| North Carolina LLC Registered Agent Fee | up to $400 |
| North Carolina LLC Operating Agreement Fee | up to $1,000 |
| North Carolina Employer Identification Number | FREE |
| North Carolina LLC Name Reservation Fee | $30 |
| North Carolina LLC Assumed Business Name Fee | $26 |
| North Carolina LLC Articles of Correction Fee | $10 |
| North Carolina LLC Articles of Amendment Fee | $50 |
| North Carolina LLC Change Registered Agent Fee | $5 |
| North Carolina LLC Certified Document Copy Fee | $10 or $15+ |
| North Carolina LLC Certificate of Existence Fee | $10 or $15 |
| North Carolina Business Website Domain Fee | $20 - $30 |
| North Carolina Business Insurance Premium | varies |
Aside from the $200 annual report filing fee, some business permits and licenses are renewable yearly in North Carolina. Other ongoing costs include registered agent services and website domain fees.
North Carolina LLC Expedited Service Fee
Cost: $100 or $200
In North Carolina, most of your LLC documents can be expedited for a fee. This includes the Articles of Organization and the Certificate of Existence. The cost depends on how quickly you need the documents to be processed:[6]
- $100 - 24 hours
- $200 - same day
Forming a North Carolina LLC online takes about 5-7 business days. Mailing your application could take 2-3 weeks. You can pay for expedited service to get your LLC on the same day of your request.
North Carolina LLC Registered Agent Fee
Cost: up to $400
In North Carolina, every LLC must appoint a registered agent. This agent, either a person or an entity, can accept official legal documents and notices for your LLC.
To save money, you can be the LLC's registered agent. However, you must be at least 18 and have a physical address in North Carolina. PO boxes and virtual office addresses don't count.
Alternatively, you can hire a friend or family member as a registered agent. Just note that North Carolina's law requires you to secure the person's consent before appointing them as a registered agent.[7]
Hiring a registered agent service is not required for LLCs in North Carolina, but doing so provides privacy and convenience. You get to keep your address off public records while letting a professional handle your LLC's legal documents.
North Carolina LLC Operating Agreement Fee
Cost: up to $1,000
The costs associated with the operating agreement come in the document's drafting. You can create an operating agreement for free by using templates online. Alternatively, it could cost upwards of $1,000 if you hire an attorney.
An operating agreement is a legal document that details important rules for managing the LLC. It also defines the roles and responsibilities of the members or managers. In essence, it's a binding contract that helps prevent and solve any business disputes that may arise later on.
LLCs in North Carolina are not required to have an operating agreement. But if you don't create one, you'll have to follow North Carolina's default legal provisions for LLCs. These rules aren't always beneficial to your LLC.
According to North Carolina's rules, LLCs are member-managed by default.[8] This means all members have equal voting rights. It can lead to gridlock when making management decisions as reaching a majority vote becomes difficult, especially for larger LLCs.
North Carolina LLC Employer ID Number
Cost: FREE
An Employer Identification Number (EIN) is a unique 9-digit number assigned by the Internal Revenue Service (IRS). This number is used to identify a business entity for tax-related purposes.
You're not required to get an EIN if you're operating a single-member LLC in North Carolina. However, you might still need it down the line if you want to hire employees or open a business bank account.
Maintaining separate bank accounts for personal and business finances is a common practice for LLCs. Doing so helps maintain a clear separation between the company and personal finances. This may also prevent using business funds for personal expenses or vice versa.
North Carolina LLC Name Reservation Fee
Cost: $30
There's no additional cost to naming your LLC in North Carolina. It's included when you pay the LLC formation filing fee. However, it could take a while for you to gather all the information needed in the Articles of Organization.
If you're not ready to submit your Articles of Organization, you can reserve your desired business name first. Paying the $30 name reservation fee will prevent others from using that name for 120 days.[9]
Don't forget to review North Carolina's detailed list of naming regulations to prevent your Articles of Organization from getting rejected.
Check online to see if your business name is available as a web domain. Even if you don't plan to make a business website yet, you may want to buy the URL to prevent others from acquiring it.
North Carolina LLC Assumed Name Fee
Cost: $26
An assumed business name allows your LLC to operate under a name different from its official registered name.
For example, if "John Doe Enterprises LLC" wants to do business as "John's Coffee Shop," the latter would be the assumed business name. It's ideal if you want to operate under a business name that is more marketable or doesn't have an "LLC" at the end.
The assumed business name fee is paid to the county register of deeds where your LLC operates. There is a flat $26 fee, no matter which county you register in.[10]
An assumed name certificate filed on or after December 1, 2017, in North Carolina is valid until withdrawn. If you want to change the LLC's assumed name, you must submit a new application.[11]
North Carolina Articles of Correction Fee
Cost: $10
After your North Carolina LLC application is approved, your next focus should be on maintaining its good standing over the long term.
Get a copy of the approved Articles of Organization and review all the details carefully. If there are errors, like a misspelled business name or incorrect address, correct them as soon as possible by filing the Articles of Correction.
North Carolina Articles of Amendment Fee
Cost: $50
Your North Carolina LLC's Articles of Organization contain specific details about your business. Should these details change, you must submit the Articles of Amendment to the Secretary of State.
File the Articles of Amendment if you:
- Add, remove, or change an LLC member or manager.
- Update your LLC's business address.
- Modify your LLC's stated business activities.
The Articles of Correction are for fixing mistakes in initial filings. Meanwhile, the Articles of Amendment are for updating or changing key details as the LLC evolves.
North Carolina Change Registered Agent Fee
Cost: $5
An LLC can change its registered agent's details anytime. If this happens, you must submit a statement of change to the Secretary of State as soon as possible. Changes include the registered agent's name and address.
Don't forget to get a signed registered agent acceptance form from your new agent. Failure to submit a statement of change along with the acceptance form may cause time-sensitive legal documents to be sent to the wrong address.
In North Carolina, the Articles of Amendment are used to change the business name, business purpose, and other details. The Statement of Change pertains to changes regarding the registered agent.
North Carolina Certified Document Copy Fee
Cost: $10 (online) | $15 + $1 per page (in-person/mail)[12]
Certified copies of business documents are requested from the Secretary of State. These documents verify that your LLC is legitimate and that its details are accurate.
You might need a certified copy of a business document, like your Articles of Organization, for circumstances like opening a business bank account or expanding your LLC in another state.
In North Carolina, online orders of certified business documents are processed immediately. Requesting by mail costs more and could take up to 5 days after receipt to be processed.
North Carolina Certificate of Existence Fee
Cost: $10 (online) | $15 (in-person/mail)[12]
A Certificate of Existence verifies that your business is legally authorized to conduct business in North Carolina and is in good standing with the state. The certificate is often necessary to:
- Open a bank account.
- Conduct business outside of North Carolina.
- Qualify for business insurance.
- Apply for business loans.
To recover from a bad standing in North Carolina, your LLC should pay any outstanding penalties and fees. You must also file the annual report if you haven't done so. Afterwards, file an LLC Reinstatement Form along with the $100 filing fee.[1]
North Carolina Business Website Domain Fee
Cost: $20 - $30
A website domain provides a dedicated online space for your business. It's essential for marketing, customer engagement, and brand visibility in today's digital world.
Even if you're not planning to build a business website soon, it's a good idea to at least buy the domain name. This prevents others from using your LLC's name as a web address.
Domain squatters often monitor newly registered LLC names. They purchase corresponding website domains and then resell them at significantly higher prices.
North Carolina Business Insurance Premium
Cost: varies
All LLCs in North Carolina with 3 or more employees are required to get workers' compensation insurance.[13]The cost of business insurance depends on factors like the number of employees, the risk level of your industry, and your past insurance claims.
You can find a private insurance company that offers workers' compensation coverage. Alternatively, apply for the North Carolina Workers' Compensation Assigned Risk Pool.[14] It provides coverage to businesses that are considered high-risk or need more history.[15]
Failure to obtain this insurance can lead to hefty fines, potential lawsuits from injured employees, and even business closure.
Investing in the right insurance can help protect your business from financial losses. For example, business property insurance covers your LLC's furniture and equipment against damage or loss.
Bottom Line
North Carolina's $125 - $250 LLC filing fee is just the beginning of expenses you will face when forming an LLC in the Tar Heel state.
Creating and maintaining an LLC in North Carolina could be up to $3,000 or more. It will increase depending on the additional services, documents, and licenses your LLC needs to operate.
There are more costs to consider as your LLC grows. This includes bookkeeping fees, trademark fees, and paying rent. Make sure to set aside an extra budget for unexpected costs.
References
- ^ North Carolina Department of the Secretary of State. Business Registration Fees - Limited Liability Companies, Retrieved 01/24/2024
- ^ North Carolina Department of the Secretary of State. Annual Report Due Dates, Retrieved 12/19/2023
- ^ North Carolina Department of the Secretary of State. Maintaining Registration, Retrieved 12/19/2023
- ^ North Carolina Department of Revenue. Tax Rate Schedules, Retrieved 01/24/2024
- ^ North Carolina Department of Revenue. Form Gen 562, County and Transit Sales and Use Tax Rates For Cities and Towns (By City), Retrieved 01/24/2024
- ^ North Carolina Department of the Secretary of State. Expedited Filings, Retrieved 01/24/2024
- ^ North Carolina General Assembly. Chapter 57D: Article 2. Purposes, Powers, Formation, Annual Report, Name, Registered Office, and Agent, Retrieved 01/24/2024
- ^ North Carolina General Assembly. Chapter 57D - North Carolina Limited Liability Company Act, Retrieved 01/24/2024
- ^ North Carolina Department of the Secretary of State. Application to Reserve a Business Entity Name, Retrieved 12/19/2023
- ^ North Carolina Department of the Secretary of State. Assumed Business Name Certificate, Retrieved 01/24/2024
- ^ North Carolina Department of the Secretary of State. Assumed Business Names, Retrieved 12/19/2023
- ^ North Carolina General Assembly. 57D-1-22. Filing, service, and copying fees., Retrieved 01/24/2024
- ^ North Carolina Industrial Commission. Workers' Compensation Insurance Requirements, Retrieved 12/19/2023
- ^ North Carolina Rate Bureau. Workers' Compensation, Retrieved 12/19/2023
- ^ North Carolina Industrial Commission. Workers' Compensation, Retrieved 1/08/2024
Nicole King is a research analyst at CreditDonkey, a business formation services comparison and reviews website. Write to Nicole King at nicole.king@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.
Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.
|
|
| ||||||
|
|
|
