How to Start a Business in North Carolina

Step 1: Choose Your Business Structure

How you start depends on your structure. A sole proprietorship operating under the owner's own legal name requires no state formation filing; you can generally begin once you've handled licensing and tax registration below. An LLC files Articles of Organization (Form L-01) with the North Carolina Secretary of State for $125, naming a registered agent with a North Carolina street address in the county listed in the articles. A corporation files its own Articles of Incorporation with a separate fee. Weigh the $125 filing fee and the $200 annual report an LLC owes against the personal liability protection it provides compared to a sole proprietorship.

Step 2: Choose and Check Your Business Name

If forming an LLC, your name must include "limited liability company" or an abbreviation like "LLC" or "L.L.C." and must be distinguishable from other business names on file with the Secretary of State; search the Secretary of State's online business registration database before filing. If you'll operate under a different name, whether as a sole proprietor or under your entity's name, North Carolina calls this an Assumed Business Name, filed with the Register of Deeds in the county or counties where you'll do business, not with the Secretary of State, with the fee set by each county.

Step 3: Appoint a Registered Agent, If You Form an LLC or Corporation

An LLC or corporation must maintain a registered agent whose registered office is a physical street address in North Carolina, in the same county named in the Articles of Organization; a P.O. box isn't accepted. A member or manager who resides in North Carolina can serve as the LLC's own registered agent if their business office is that address. A sole proprietorship has no registered agent requirement.

Step 4: Get an EIN From the IRS

Once any required state filing is approved, or immediately for a sole proprietor, apply for a free Employer Identification Number from the IRS. Most banks require one to open a business account, and you'll need it for your state tax registrations.

Step 5: Register for North Carolina Taxes

By default, North Carolina taxes an LLC's profit the way the IRS does, passing income through to the members' personal returns at the state's flat individual income tax rate; an LLC that elects corporate tax treatment instead pays North Carolina's corporate income tax and becomes subject to the state's corporate franchise tax, which doesn't apply to a default pass-through LLC. If you'll sell taxable goods or services, register for a Certificate of Registration with the North Carolina Department of Revenue before your first sale. If you'll hire employees, register separately with the Division of Employment Security for unemployment insurance and with the Department of Revenue for income tax withholding.

Step 6: Check Industry and Local Licensing

North Carolina doesn't issue a single general business license covering every business. Instead, specific professions and trades, like contractors, cosmetologists, and healthcare providers, are licensed through their own state boards, and cities or counties may require separate local permits depending on where you operate. Check with your specific industry's licensing board and your city or county government rather than assuming one state filing covers licensing.

Step 7: Plan for the Annual Report, If You Form an LLC

An LLC must file an annual report with the Secretary of State every year by April 15 after the year it was formed, for $200 on paper or $202 to $203 online due to the state's electronic filing surcharge. A sole proprietorship has no equivalent state filing, though its assumed name registration and any local permits still need maintaining. See our guide to forming an LLC in North Carolina for the complete LLC-specific filing steps if you choose that structure.

Weigh the Sole Proprietorship Tradeoff Carefully

A sole proprietorship is the simplest way to start in North Carolina, but it gives the owner no separation from the business's debts or legal liabilities. Compare the $125 LLC filing fee and $200 annual report against the liability protection an LLC provides before assuming the simpler path is the better one overall.

Assumed Business Names Are a County-Level Process

Because an Assumed Business Name is filed with each county's Register of Deeds rather than the Secretary of State, confirm the process and fee directly with the Register of Deeds in every county where you'll operate under that name, since requirements and costs can differ county to county.

Operating in More Than One County or State Multiplies Requirements

If your business operates in multiple North Carolina counties, confirm assumed name and local permit requirements in each one. If you also operate outside North Carolina, that state generally has its own separate registration and licensing requirements.

This Is General Information, Not Legal or Tax Advice

Which structure, licenses, and tax registrations apply to your specific business depend on your industry and locations, and fees can change. Talk to a tax professional about how your business's tax classification affects your specific situation, and confirm current fees directly with the Secretary of State and Department of Revenue.

Keep Your Registered Agent and Filings Current

If you form an LLC, North Carolina requires maintaining a registered agent continuously and filing the annual report every year, not just at formation. Missing the April 15 deadline by more than 60 days gives the Secretary of State grounds for administrative dissolution after notice.