The North Carolina limited liability company (LLC) operating agreement is a legal document that regulates the relationship between the company members and the company's operation.
The LLC operating agreement, or business operating agreement, includes information on each member’s initial contribution to the company and provides each member’s percentage in the company’s interests based on the contribution.
Is an Operating Agreement Required in North Carolina?
No, an operating agreement is not a required document when establishing an LLC in North Carolina. Regardless, the members who want to optimize their businesses and regulate their mutual relationships still decide to draft the operating agreement.
4 Main Types of Operating Agreements
This section presents the four most commonly used operating agreement types in North Carolina:
Types of Operating Agreements
Single-member LLC operating agreement: Used in situations where there is only one member to the LLC due to its simple form and lack of provisions that regulate the relationship between the members.
Multi-member LLC operating agreement: Used in LLCs with two or more members. It regulates how the company will be operated and the mutual relationship between the members.
Member-managed LLC operating agreement: This type of operating agreement is used when members decide to manage the LLC personally. It defines their managerial rights and duties.
Manager-managed LLC operating agreement: Here, the members delegate the management of the company to a professional manager, and the operating agreement outlines the rights and duties of the manager.
Laws and Legal Requirements for LLC Operating Agreements in North Carolina
Chapter 57D of the North Carolina Statutes, called the North Carolina Limited Liability Company Act, regulates the status of LLCs in North Carolina.
Moreover, there are a few sections of this chapter that regulate the status of operating agreements in North Carolina, in particular:
Laws and Legal Requirements
§ 57D-2-30: Regulates scope, function, and limitations of operating agreements.
§ 57D-2-31: Parties to, and other persons subject to or having rights under, the operating agreement.
§ 57D-2-32: Remedies for breach of the operating agreement or occurrence of identified events; reliance on the operating agreement.
How to Form a Limited Liability Company (LLC) in North Carolina
The easiest way to form a limited liability company in North Carolina is to follow the steps below:
How to Form a LLC in North Carolina
#1. Choose a Business Name For Your LLC
The first step in the process of forming an LLC is to choose a business name that is distinguishable from other business names registered in North Carolina. The best way to check if your business name is unique is to visit the Secretary of State’s website and do a business name search.
#2. Choose the Type of LLC
In North Carolina, there are two main types of LLCs, based on the place of establishment:
Domestic LLCs: Companies that are established and registered in North Carolina.
Foreign LLCs: Companies established elsewhere but registered in North Carolina due to their business expansion.
#3. Nominate an Agent
State law requires each LLC to appoint a registered agent. The agent will be in charge of receiving official notifications and documents on behalf of the LLC.
The agent can be an:
Individual with a registered address in North Carolina
Entity with the authority to operate in North Carolina
#4. File the Formation Documents
This step differs based on the type of LLC you are forming.
For foreign LLCs, you should submit the Certificate of Authority. You can submit it online or fill out Form L-09. Additionally, you should submit the Certificate of Existence issued by the state of the company's initial establishment that is not older than six months.
#5. Pay the Required Fee
The filing fee for domestic LLCs is $125, and for foreign LLCs, it is $250. If you are submitting your application via mail, you should write a check, attach it to your application, and send it to the following address:
Corporations Division, P.O. Box 29622, Raleigh, NC 27626-0622
#6. Create your LLC Operating Agreement
After registering your company, you should create an operating agreement and optimize all the business processes. The document doesn’t have to be registered with any state authority. However, you should keep it for your internal reference.
#7. Apply For an Employer Identification Number (EIN)
This number will enable you to open a company bank account, complete certain transactions, and hire employees.
You can get the EIN in two ways: