Perhaps you are hoping to form an LLC in NC. People assume that starting an LLC is difficult and costly. However, it’s generally not difficult, and the cost would vary across states. We have all the info you need to know about the cost of forming an LLC, particularly the LLC cost in North Carolina.
On this page, you’ll learn about the following:
- North Carolina LLC Cost of Filing
- Taxes payable to North Carolina Department of Revenue
- Cost Comparison Between States
- Other Costs
North Carolina LLC Cost of Filing
Here are the costs involved in forming an LLC in North Carolina.
Cost of Filing Formation Certificates
The North Carolina Certificate of Formation is responsible for the majority of the cost, which could also vary depending on whether you’re forming a domestic LLC or a foreign LLC. Still, you can file both at the North Carolina Secretary of State.
North Carolina Domestic LLC
- Online Filing costs $125.
- Annual Report filing costs $200
- Name Reservation fee costs $30
- By Mail: Fill out the application form, and send it to NC Secretary of State Business Registration, P.O. Box 29622, Raleigh, North Carolina 27626-0622. Costs $125.
North Carolina Foreign LLC
- Online Filing costs $250.
- Annual Report filing costs $200
- Name Reservation fee costs $20
- By Mail: Fill out the application form, and send it to NC Secretary of State Business Registration, P.O. Box 29622, Raleigh, North Carolina 27626-0622. Costs $250.
Note that filing online is ideal, not only because you need to go to the Secretary of State office, but also it would be faster. You won’t have to wait in a queue in doing so.
North Carolina LLC Formation Service or Registered Agent Fee
You need a registered agent to form an LLC in North Carolina, hence, added costs for service fees. Here are three of the best LLC services on our list that will provide you with registered agents to ease your worries.
Business Permits and Licenses
The business licenses depend on your business’s activity and location and are renewed yearly. As such, the cost will vary. Check the North Carolina Department of Revenue for regulatory boards or agencies requiring licensing.
Taxes payable to North Carolina Department of Revenue
An LLC in North Carolina has to pay several State as well as Federal Taxes at the stage of formation & during its operation. Read this article to know more about these taxes. The North Carolina State Department of Revenue charges several taxes on an LLC. The two main State Taxes are:
State Income Tax
An LLC owner has to pay state tax on any amount he draws via his LLC. The earnings are taxed through the personal tax return. The standard income tax rate in North Carolina is 5.25%. One can apply for all the standard allowances and deductions.
State Sales & Use Tax
Every LLC which is a service provider or is a seller of tangible goods is bound to the sales & use tax in North Carolina. The LLC has to collect taxes & then pay those to the North Carolina Department of Revenue. The Sales & Use Tax is different in different regions, counties, & cities.
The current state sales & use tax rate on LLC in North Carolina is 4.75%
Federal Self-Employment Tax
As the name suggests, Federal Self-Employment Tax is paid by all the LLC Business members or managers. This kind of tax applies to all the earnings a member withdraws from the business.
The Federal self-employment tax rate in North Carolina is 15.3 percent.
Federal Income Tax
The Federal Income Tax is calculated on the basis of the earnings, the income tax bracket your LLC falls, the deductions, & the manner/ mode of filing.
Federal Income Tax is levied on all the profits your LLC makes minus the deductions & allowances such as Healthcare or Retirement Plans.
Employee & Employer Taxes
If you have several employees who draw monthly salaries, there will be some added Employee-Employer taxes. These tax implications vary, depending on various factors, e.g., the amount, number of employees, etc.
Cost Comparison Between States
North Carolina is surrounded by many states, namely Virginia, South Carolina, Georgia, Tennessee, etc. Each of these states has a different rate of taxes levied on LLCs. Let us take a look at this comparative chart.
|States||Filing Fee||Annual/Biennial Fee||Sales Tax|
Based on the kind of industry you LLC operated in, your LLC will be liable to some other taxes & duties. For Example, if your LLC is in the sector of import & export, you have to pay the import-export duty.
You should consult with a professional to verify the tax rates or business costs of registering an LLC in North Carolina.
- North Carolina Name Reservation: $10 for online fillings or by mail
- Doing Business As (DBA): $26 for online filling or if filing by mail
- Certified Document Copies: $10 per document.
- Certified of Good Standing: $15
- Business Domain Name and Website: depend on your preference, but domain name could be as low as $2.99/yr at NameCheap, and web hosting is at least $30/mo at Kinsta.
- Online workspace: at least $4.20/mo for GSuite.
- Business Insurance: would vary depending on insurance type–whether general liability insurance or professional liability insurance–and coverage.
- Dissolution of North Carolina LLC: $30
How Much Does It Cost to Maintain an LLC in North Carolina
To maintain an LLC in North Carolina you will need to pay an annual fee of $200 along with state sales & use tax at 4.75%, state income tax at 5.25% and federal taxes.
North Carolina businesses need to keep up with state and local licensing and regulations. Many small businesses find that maintaining an LLC in the state is affordable and easy to do. Whether you’re a new business or a veteran, you can thrive in North Carolina. However, you’ll want to be sure to do your research and stay abreast of the latest regulations and changes. If you don’t, you could end up paying more than you have to.
The cost of maintaining an LLC in North Carolina varies by type of business and municipality. For instance, a dry cleaning service in Raleigh would pay a license fee of $90 annually. You’ll also need to pay local fees if you plan on selling alcohol or giving massages.
In addition to licenses and permits, there are several other optional services that are often essential to get your company up and running. A lawyer or accountant can help you figure out what the costs of these other services are. But don’t overlook the cost of the operating agreement, too. This document not only sets the rules for how your LLC will operate, it can prevent disputes between owners.
Operating agreements are a great way to protect yourself from personal liability. They also give your company some added credibility. When written properly, these documents can cost several hundred dollars.
An annual report is another important requirement for LLCs in North Carolina. Annual reports are due each April and are a chance for you to update your information with the state. You can get yours online or by mail. It will cost you about $200 to file yours with the Secretary of State.
To file an article of organization, you’ll need a name for your business, a legal name for your LLC, and contact information for all signatories. The state has a free database you can search to find the best name for your company.
Other fees may include recurring costs and tax payments. If your business has employees, you’ll need to pay unemployment insurance tax. And while you’re at it, you’ll need to file a federal tax ID number. You’ll also need to keep accurate records of all of your financial transactions. These include invoices for purchases, as well as information on contractors and employees.
Lastly, you’ll need to find a registered agent. Your registered agent is the person you contact with the state when you need something, such as an annual report or a notice of filing. Having a good registered agent is key to a successful LLC. Fortunately, many companies offer registered agent services. Not only do these companies provide all the necessary services, they’ll also charge you a low rate.
One of the best ways to form an LLC is to use an online formation service. With these services, you’ll have a clear understanding of the process. Plus, you’ll have access to a database of forms and procedures. Some even offer a free year of registered agent services, which can save you some money.
It is possible to form an LLC without professional help, but forms still have associated costs, regardless of where your LLC is formed.
It is difficult to say whether forming an LLC is expensive. Nevertheless, the cost could be anywhere from $40 to $500. If you refuse to hire professionals, you’ll still have expenses like form fees to cover.
The need to separate personal money from business funds, thus necessitating the creation of a business bank account for your LLC.
The cost of North Carolina is much lower compared to other forms of business. Apart from the state filing fees and annual taxes, you might bear the cost of the registered agent. Compare the price of professional LLC services and choose the most affordable one.