This is the first in a two-part series. Read part 2 here.
Do you ever go into autopilot when you work? If you had to stop and walk through the business formation process with a client, could you? Taking time to write down processes and procedures can be beneficial and time saving, especially for tasks you only do occasionally. Fortunately, Mollie Schwam, NCCP, and her attorneys at Matheson & Associates PLLC have done the work for you. Take time to refresh your memory and efficiently help your clients by reading these simple steps on setting up a Limited Liability Company (“LLC”) business.
First: Know whether or not the client already has an established LLC in another state and wants to conduct business in NC or if the client has not formed a LLC and wants to conduct business in NC.
If the client already has an established LLC and is conducting business in another state, then they are a foreign limited liability company. You will have to prepare and submit an Application of Certificate of Authority with the N.C. Secretary of State’s office.
Second: If your client needs to establish a LLC, then the client needs to decide on a name for the company. Remind the client that the LLC name must follow a few N.C. Secretary of State guidelines:
- The name must be distinguishable and different from any other business entity’s name found on the NC Secretary of State’s website. For example, you cannot have two businesses registered in the NC Secretary of State’s database with the name “John’s Barbershop.”
- The name must contain the words “limited liability company,” or the abbreviation “LLC,” “L.L.C.,” “ltd. Liability Co.,” or “ltd. Liability ”
- John’s Barbershop, LLC
- John’s Barbershop, L.C.
- John’s Barbershop, Limited Liability Company
- John’s Barbershop, ltd. Liability
- John’s Barbershop, ltd. Liability Company
Once the client has decided on a name, you will have to prepare a Certificate of Formation and file with the NC Secretary of State to become a limited liability company in North Carolina.
Third: Discuss the different components of the Articles of Organization with the client:
- Company name-must be the EXACT name you want to appear in all of the company’s legal documents; also, the name must include the appropriate ending (LLC, limited liability company, etc.)
- Organizers/Members-the organizer/member must submit the Articles with their name, title, and their business
- Principal Office address-if the LLC has one, then it must be included in the Articles.
- Registered Agent-the purpose of a registered agent is to forward any notices, processes, or demands that is served on the company.
- If the registered agent is an individual, then the individual must reside in NC and the business address is identical to the registered office;
- A domestic business corporation or limited liability company whose business address is identical to the registered office; or
- A foreign business corporation or limited liability company authorized to transact business in this state and whose business address is identical to the registered
Fourth: Submit the Articles of Organization to the N.C. Secretary of State on behalf of the client.
Also, ask the client if he/she wants to file a DBA “Doing Business As” form (also referred to as an assumed name). The company’s DBA is filed with the Register of Deeds in the county where the business will operate. The DBA is a business name that the LLC or corporation will operate under rather than using the name on the Articles. If the company is or will be engaged in business in multiple counties, filing a DBA is required in only one of the counties.
As always, speak with your attorney or contact the N.C. Secretary of State if you have any questions.
N.C. Secretary of State’s Contact Information
Mailing Address: North Carolina Secretary of State, P.O. Box 29622, Raleigh, NC 27626-0622
Physical Address: North Carolina Secretary of State, 2 South Salisbury St., Raleigh, NC 27601
Stay tuned for the next blog for drafting an operating agreement for an LLC.
Information in the post is taken from the North Carolina Secretary of State’s website and can be viewed here. This post appeared originall on Matheson & Associates PLLC/Beer Law Center www.beerlawcenter.com
Mollie Schwam is a North Carolina Certified Paralegal with Matheson & Associates PLLC in Raleigh. Mollie graduated from Smith College in Northampton, MA with a bachelor’s degree in English and a minor in psychology. During college Mollie interned at the U.S. District Court for the Eastern District of North Carolina in Raleigh. Observing the dynamics in the courtroom between lawyers, judges and witnesses was an exciting and truly eye-opening experience. After college Mollie worked at the Raleigh Police Department as a volunteer and participated in ride-alongs with other volunteers. Both of these experiences commenced her passion for the field of law. Mollie obtained her paralegal certificate from Meredith College.
To take a break from law Mollie enjoys reading books, preferably historical fiction by Philippa Gregory, and hiking along North Carolina trails with her small, yet feisty, dog.