North Carolina LLC Landscape
North Carolina’s LLC statute was rewritten in 2014 (Chapter 57D) to emphasize operating agreement freedom, modern fiduciary defaults, and streamlined conversions. Distinguish between:
- Single-member LLCs — ignore entity formalities for federal tax, but still maintain separate accounts and written authorization matrix to avoid alter-ego attacks.
- Multi-member LLCs — choose between member-managed vs manager-managed structure in Articles; embed capital calls, buy-sell, and restrictions in the operating agreement.
- Professional LLCs — require licensing board pre-approval (e.g., NC State Bar’s Form 6 for law firms, NC Medical Board PLLC application).
- Foreign LLCs — Delaware, Wyoming, and Florida LLCs commonly register as authority LLCs when opening NC offices or hiring W-2 workers.
Practice tip: NC does not impose a gross-receipts franchise tax on LLCs, but LLCs taxed as corporations owe the $200 minimum. If you anticipate S-corp election, factor the April 15 annual report cycle and NC 4.75% flat income tax into your owner compensation strategy.
Formation Roadmap
Use this timeline whether you are organizing a brand-new NC LLC or domesticating an existing entity into the state.
Confirm availability with the Secretary of State database. Names must contain Limited Liability Company or an abbreviation (“LLC”, “L.L.C.”) and be distinguishable under Chapter 55D-20. Reserve for 120 days via Application to Reserve a Business Entity Name ($30) if needed.
Designate a North Carolina street address and agent (individual resident or qualifying entity). P.O. boxes not allowed. The registered office may differ from the principal office.
Include company name, designation of company officials (organizer), registered office/agent, principal office, and management structure. PLLCs attach licensing board approval. Filing fee $125.
Not filed publicly but essential. Chapter 57D allows the operating agreement to override most statutory defaults—set capital accounts, allocations, transfer restrictions, fiduciary tweaks, and dispute mechanisms.
Obtain EIN from IRS, open NC Department of Revenue accounts for withholding, sales/use, and franchise & excise (if electing corporate tax treatment). Consider NC unemployment insurance registration with DES.
Calendar the April 15 annual report, build a bank-ready record book (consents, membership ledger, EIN letter), and prepare CTA beneficial ownership filings.
Articles of Organization & Fees
Form L-01 can be filed online or mailed to Business Registration in Raleigh. Expect standard processing of 5–7 business days without expedite.
What goes inside Form L-01?
- Company name with proper designator.
- Principal office mailing & physical addresses. If you have no principal office, state that explicitly.
- Registered agent/office plus consent to act (signed inside form).
- Company officials — at least one organizer; list managers if manager-managed.
- Business email for state notices (optional but helpful).
- Effective date and delayed effective date (up to 90 days).
Fees & expedite
| Filing | Fee | Notes |
|---|---|---|
| Articles of Organization (L-01) | $125 | Pay online or with check payable to “NC Secretary of State”. |
| Name reservation | $30 | Optional 120-day hold; Form BE-03. |
| 24-hour expedite | $100 | Clock starts once SOS accepts documents. |
| Same-day expedite | $200 | Documents must be received before noon to return by 4pm Eastern. |
LLCs do not pay franchise tax at formation, but LLCs taxed as corporations will owe the $200 franchise minimum with the first income/franchise return. Keep initial capitalization simple—North Carolina does not require share or membership interest listings on the Articles.
Naming Rules & Registered Agents
Naming standards
Chapter 55D-20 requires LLC names to be distinguishable from existing entities and to contain “limited liability company”, “LLC” or “L.L.C.” Names cannot falsely imply government affiliation, or regulated industries (banking, trust, insurance) without approvals. Professional LLCs must include words such as “Professional Limited Liability Company” or “PLLC” and often one or more owner surnames under specific board rules.
Use assumed business names (“DBA”) when branding outside the registered name. North Carolina’s Assumed Business Name Act requires filing with the Register of Deeds in each county where the name is used, then uploading to the statewide searchable database.
Registered agent essentials
- Maintain a physical street address in North Carolina (no P.O. boxes).
- Agent can be an adult NC resident, a domestic business entity, or a foreign entity authorized to transact business in NC.
- Changes to the registered agent are filed using Form BE-06 and cost $5 (free online).
- Failure to maintain an agent leads to administrative dissolution after 60 days of notice.
Common pitfall: When you move offices, update both the principal office address and registered office. The annual report only updates certain fields, so file Form L-09 (amendment) when you re-domesticate or add managers.
Operating Agreement & Ownership Mechanics
North Carolina does not require an operating agreement, but Chapter 57D assumes you have one and allows it to override most default rules (aside from non-waivable duties such as the implied covenant of good faith). Your agreement should cover:
Capital & Allocations
Define capital contributions, additional capital call mechanics, default interest for late funding, and whether allocations follow capital or target book capital accounts.
Governance
Member-managed vs manager-managed, scope of manager authority, protective provisions for investors, and voting thresholds for mergers or dissolutions.
Transfer restrictions
Right of first refusal, drag/tag rights, buy-sell triggers, disability/death provisions, and permitted transfers (trusts, affiliates).
Add professional-specific clauses (peer review, malpractice coverage) for PLLCs. Venture-focused LLCs often incorporate Delaware-style waterfall provisions to handle preferred equity; NC’s flexible statute accommodates those structures.
Annual Reports & Good Standing
All LLCs — domestic or foreign — must file an annual report with the Secretary of State by April 15. File online for $203 or mail Form L-15 for $202.
Annual report content
- Principal office street/mailing addresses.
- Registered agent/office information.
- Manager/member names and titles (for manager-managed LLCs list managers; member-managed list at least one member).
- Contact email for SOS notices.
Reports filed after April 15 accrue a $25 late fee plus potential administrative dissolution after 60 days. Reinstatement requires catching up all missing reports + a $100 reinstatement fee.
Compare to corporations: LLC annual reports cost $203 regardless of revenue, whereas corporations pay $25 if paper, $23 online but owe separate franchise tax. For micro-businesses, the flat LLC fee is predictable.
North Carolina Tax Planning
Most LLCs default to pass-through taxation, reporting income on Form D-400 (individual) or D-403 (partnership). Consider the following table when choosing tax elections.
| Structure | NC entity-level tax | Owner taxation | When it fits |
|---|---|---|---|
| Default single-member LLC | None | Owner pays NC flat 4.75% on net profits | Consultants, real estate holds, asset protection wrappers. |
| Multi-member partnership LLC | None | Owners pay 4.75% individually; withhold NC income tax on nonresident members. | Service firms, professional practices with equal ownership. |
| S-corp election (Form 2553 + NC CD-401S) | LLC treated as S-corp pays $200 franchise minimum + 2.5% if C-corp fallback. | Owners take reasonable salary + distributions; avoid 15.3% SE tax on a slice. | Growth companies paying consistent distributions >$80K per owner. |
| C-corp election | Franchise tax base ($200 min) + 2.5% income tax. | Double tax when distributing dividends; allows QSBS if later converted. | Capital-intensive ventures courting VC but not ready for DE flip. |
North Carolina permits pass-through entities to elect into the Pass-Through Entity Tax (PTET) regime at 4.75% to capture SALT deductions for members. Evaluate PTET and S-corp payroll calibrations together.
Worked example
A professional services LLC nets $300,000. As a partnership, members pay 4.75% = $14,250 state tax (plus federal + SE tax). If electing S-corp with $160,000 collective salary, the business pays NC $200 franchise tax plus payroll withholding, while owners pay 4.75% on salary + distributions; SE tax only applies to salary. Spreadsheet this alongside payroll service costs and CTA/BOI compliance to confirm savings.
Professional & Special-Purpose LLCs
PLLCs
Lawyers, doctors, engineers, CPAs, veterinarians, and other licensed professions require a PLLC. Expect board-level approval (e.g., NC State Bar, Medical Board, CPA Board) before filing Articles. Each board may require shareholder/manager limitations, liability insurance attestations, or naming conventions (“Smith Cardiology, PLLC”).
PLLC Articles include:
- Statement that the entity is a professional limited liability company.
- Professional service description.
- Certification that all organizers/members are properly licensed.
- Board approval letter attached.
Non-U.S. owners & ITIN matters
Foreign founders can own NC LLC interests, but bank KYC and EIN issuance require extra steps. Provide passport copies, ITIN applications (Form W-7), and consider appointing a U.S. manager for bank signatory rules.
Real estate & holding companies
North Carolina counties require local property tax listings. For holdco structures, keep each property in a separate LLC because NC lacks series LLCs. Use a parent LLC in Delaware or NC for centralized management, then record deeds into each property LLC.
Foreign LLC Qualification
If your LLC is organized elsewhere but “doing business” in North Carolina (office, employees, inventory, or regular services), file an Application for Certificate of Authority (Form L-09). Steps:
- Obtain a Certificate of Existence from the home state (dated within 6 months).
- Complete Form L-09 with NC registered agent, principal office, and fiscal year info.
- Submit with $250 filing fee; expedite options mirror domestic filings.
- Pay annual reports ($203) and NC income/franchise taxes on NC-sourced income.
Common mistakes: ignoring NC withholding on nonresident members, failing to allocate income for NC franchise tax once the LLC elects corporate tax status, and forgetting to update assumed names when entering new counties.
Corporate Transparency Act Overlay
The CTA treats most LLCs formed with the North Carolina Secretary of State as “reporting companies.” Unless you qualify for a narrow exemption (large operating company, regulated entity, etc.), file beneficial ownership information (BOI) with FinCEN.
- LLCs organized before Jan 1, 2024: file BOI by Jan 1, 2025 (FinCEN recently extended for certain backlog filers).
- LLCs organized during 2024: file within 90 days of formation; in 2025 the window shrinks to 30 days.
- Report each beneficial owner (25%+ or substantial control) and any company applicants (organizers) for entities formed on/after Jan 1, 2024.
- Court challenges do not suspend requirements for NC companies that are not plaintiffs.
Align CTA filings with your registered agent intake so beneficial owner IDs are collected early. I routinely bundle CTA prep with Articles and operating agreement drafting.
North Carolina vs Delaware or Wyoming
Founders often ask whether to form in Delaware and foreign-qualify into North Carolina. Consider:
Reasons to stay native
- Immediate North Carolina nexus (office, team, board meetings) makes foreign qualification inevitable, so duplicating filings adds cost.
- Chapter 57D honors broad operating agreement freedom while avoiding Delaware franchise tax.
- Professional boards prefer NC-domiciled PLLCs for malpractice and insurance coordination.
Reasons to form elsewhere
- VC-driven deals expecting Delaware law and Series Seed documentation.
- Holdco structures that own subsidiaries in multiple states, where managing in Delaware simplifies VC governance.
- Need for series LLCs (Delaware or Tennessee) with protected cells.
In either case, we can maintain a synchronized compliance calendar: Delaware franchise tax (March), North Carolina annual report (April 15), Delaware Registered Agent fees, and CTA update triggers.
How I Help
I work with founders, professionals, real estate sponsors, and out-of-state companies entering North Carolina. Typical engagements include:
- Entity choice consultations comparing NC LLCs, NC corporations, and Delaware entities.
- Drafting Articles of Organization, PLLC filings, conversions, and domestications.
- Custom operating agreements with waterfall, buy-sell, or investor rights built in.
- Annual report & franchise tax compliance reviews, reinstatements, and dissolution planning.
- CTA/BOI onboarding checklists and secure record-keeping systems.
- Foreign qualification packages for Delaware/Wyoming LLCs expanding into NC.
Ready to scope your project? Drop this link into your project tracker or schedule a consult and we’ll map the filings, timelines, and cash flow impact.