How should you name your LLC? You might have your heart set on a name, but there are important things to consider first. You’ll want to ensure that it follows state rules and isn’t too close to an existing business’s name.
The rules for naming your company in Winston-Salem, NC are fairly simple according to North Carolina General Statutes section 55D-20.
Your North Carolina LLC name must end with one of the following:
Your LLC name must be unique and easily distinguishable from other North Carolina businesses. You want to avoid confusing the public with a name similar to that of another North Carolina business.
Let’s say you have your heart set on the name “Winston-Salem Air Conditioner Repair, LLC,” but after a search, you find another North Carolina corporation named “Winston-Salem Air Conditioner Repair, Inc.” The names are too similar even though “Inc.” is a different kind of company.
If you make a simple change to your name such as “Winston-Salem Air Conditioner Service, LLC,” you should be okay.
Whatever name you choose shouldn’t be misleading to the public. This includes using another company’s name or choosing a name that would cause people to confuse it with government entities.
If your business name implies that you carry any form of professional license, at least one of your members should have that valid license issued by an appropriate government agency.
For example, if your business is named “Winston-Salem Private Investigations, LLC,” you’ll need to hold a valid North Carolina Private Investigator License.
The North Carolina Secretary of State has compiled a thorough list of words that you cannot use in your company’s name. Some of these words, like “bank,” are commonly found in the laws of other states as well. Others, like “wholesale,” are less commonly restricted.
Once you have chosen a name, you can do some research using the Secretary of State’s website business entity search. This search allows you to search for an exact name or any combination.
After naming your company, it’s also legal in North Carolina to apply to do business under an assumed name or “DBA,” but more on that later in this article.
What is a registered agent? A registered agent is an individual or company that receives service of process, legal documents, and official notices on your business’s behalf.
Service of process is a legal term and refers to the legal papers you receive when someone files a lawsuit against you. Your registered agent is the gatekeeper between your business, the state, and the public.
North Carolina state law requires that you appoint a registered agent and provide their details at the time of filing your Articles of Organization. North Carolina’s rules for naming and changing registered agents are contained in North Carolina General Statutes section 57D-2-40.
Registered agents must meet the following requirements:
A registered agent must also respond quickly in the event of a lawsuit so that your business avoids missed deadlines, fines, or penalties for non-compliance.
Some business owners choose to designate themselves as registered agents because:
However, there are several downsides to this:
For these reasons, most experienced business owners hire companies to act as their registered agents. These services cost between $100 and $150 per year. If you choose to use a law firm, you could spend up to $500 per year.
If you choose to start your LLC by using a business formation company, they often include a registered agent service in their packages. Feel free to take a look at our registered agent recommendations article for more information.
What are Articles of Organization? These documents turn your business idea into an actual legal entity ready to sign contracts and do business. North Carolina law states that filing the Articles of Organization makes it official.
To file, you’ll need the following basic information as listed in North Carolina General Statutes section 57D-2-20:
The filing fee for your Articles of Organization is $125. You can file it with the state online using the Secretary of State Online Form.
The Secretary of State reports a processing time of five to seven business days for these filings. Because that can translate to over a week, you may want to speed things up a bit. In that case, expedited service options are available for an extra state fee:
For the fastest service, you should submit your documents online. Be aware that if you choose this option, there is an extra $3.00 electronic transaction fee.
To save time and avoid the hassle of LLC filings, all seasoned entrepreneurs use LLC formation services. For recommendations, check out our article on the best LLC services.
What is an operating agreement? An operating agreement is a contract between you and other members of your LLC. It outlines the rules by which your company does business, keeps you prepared for everyday situations, and protects against the unexpected.
Your operating agreement should list each member of the company and how they’re expected to contribute to the business. Your operating agreement can be as simple or detailed as you’d like to make it.
Although not required by North Carolina LLC law, we strongly urge you to consider one. Without an operating agreement, state law acts as a fallback. Remember that state laws don’t always align with your expectations and intentions for your business.
The benefits of having an operating agreement include:
When it comes to hiring, firing, and everything in between, an operating agreement allows you to customize the rules of the LLC according to your expectations. They should be signed by every member and kept somewhere safe.
The best LLC formation services provide operating agreement templates for as low as $50, and we highly recommend them.
What is an EIN? Employer Identification Numbers are tax identification numbers assigned to businesses by the Internal Revenue Service. They function much like social security numbers, but for businesses instead of individuals. They allow the IRS to keep track of companies and other business entities that pay taxes.
Here are the most common cases in which your business will need an EIN:
We highly recommend getting an EIN even if they’re not required. Most banks and online payment services require them in order to open a business bank account for your LLC.
Obtaining an EIN is easy and can be done in minutes on the IRS website. You can also file via mail or fax.
It’s free of charge and shouldn’t be paid for unless part of a larger LLC formation package.
Read More: How to get an Employer Identification Number in North Carolina
Certain types of businesses require professional licensing, such as doctors, lawyers, and private investigators, just to name a few.
Check the Business Link North Carolina website if you have questions about any licensing requirements for your business.
In North Carolina, your Certificate of Formation serves as the license or permit at the state level. No other documentation is required.
The City of Winston-Salem requires permitting or licensing for a small portion of businesses. To apply for one of these permits or learn more, visit the City of Winston-Salem Business Page and their Business Licensing page.
Remember that your business may need specific licenses or permits. Contact the City of Winston-Salem if you have any questions.
As part of a major metropolitan area, Winston-Salem offers plenty of support for your small business. Here are just a few local Winston-Salem organizations that can help:
Now that you’ve made it official and formed your Winston-Salem, NC LLC, there are a few more easy steps to follow to complete the setup and protect your new business.
There are several good reasons for buying a matching domain name for your LLC, even if you don’t plan on building a website just yet.
Competitors can easily buy your domain and its variations to keep you from using them.
There are also people who intentionally search public records to find newly registered LLCs to buy and resell them at a higher price.
A domain name from a provider like GoDaddy.com will cost you around $20 to $50 per year. These hosts offer regular specials and discounts that help you save money even if a website isn’t in your immediate future.
North Carolina allows you to do business under an assumed business name (also known as a DBA). This means you can operate under a name different from the business’s legal name. It can also help distinguish your company from other similarly named businesses.
North Carolina’s Assumed Business Name Act (PDF) details the very common process by which you can get this done. Section 66-71.4 states that you have to file an assumed name certificate in the register of deeds office in the county where your LLC does business.
If your LLC does business in more than one county, you don’t have to file a certificate in every county. Just filing in one will satisfy the law.
For example, your LLC’s legal name is “John’s Air Conditioner Service, LLC” but you want customers to know you as “Winston-Salem AC Service,” “Winston-Salem 24/7 Air Conditioner Repair,” or anything other than “John’s Air Conditioner Service.”
The certificate should contain:
To file your assumed name certificate in Forsyth County visit their Register of Deeds online portal.
Keeping your business compliant is vital to avoid fines, penalties, or state sanctions. You’ve come too far to let compliance issues shut you down.
North Carolina Chapter 57D-2-24 requires your LLC to file a report every year. It must have this information:
There is a $200 fee for filing your LLC’s annual report. You can file them online here.
Most importantly, having an LLC will ensure your personal assets are protected if your business cannot pay its debts. Running your business through an LLC can also provide you with better tax treatment. In addition, LLCs have fewer and less complicated reporting requirements compared to other types of businesses, making them particularly suitable for smaller businesses.
It is not strictly necessary to form an LLC in order to start a business. You can engage in business as a sole proprietorship instead. However, in that case, your personal assets may be at risk if your business takes on too much debt or loses a lawsuit in court.
It doesn’t cost much to set up an LLC for your business. In most states, you will need to pay less than $150 to register your new LLC with the local state authorities. In some states, you may need to pay some additional costs later on, for example, when filing an annual report or filing for a DBA.
The time it takes to have your LLC approved can vary wildly depending on the state, the filing method you used and if you opted for expedited filing. In some states, you can have your LLC approved in as little as one day, while in others, it may take weeks or even months.
If you want the fastest possible turnaround time, you should consider using online filing and pay for expedited service, if available.
The IRS and most state tax authorities treat LLCs as “pass-through” entities. This means that your LLC does not pay taxes directly (as corporations do). Instead, the tax burden is passed through to the members of your LLC. The members will then include profits and losses from the LLC’s business on their personal income tax returns.
It is generally best to form your LLC in your home state, where you will actually carry out your business. Some people believe that it is advantageous to form your LLC in Delaware or Nevada. In reality, you would then have to register with the authorities in your home state as a foreign LLC and pay additional fees – without much benefit in return.
You are not generally required to file for a DBA (“Doing-Business-As”). However, most business owners choose to do so anyway. Getting a DBA will allow you to omit the letters LLC from your customer-facing business name. You can also have multiple names for your LLC if you want to run more than one business through your LLC.
Yes, you can form an LLC for your business in any US state. There is no requirement for you to be a US citizen in order to form an LLC, nor do you need the right to reside in the US. If your business is going to own physical property in a given state, you may want to form your LLC in that state.
No, you don’t need to hire an attorney to form an LLC for you. It is generally much cheaper and straightforward to file the necessary paperwork yourself or to hire an affordable LLC formation service to handle the work on your behalf. However, you may want to consider hiring an attorney if your business is very complex.