To move your limited liability company (LLC) to North Carolina, you can either convert your LLC from one registered in your original state into a North Carolina LLC, file as a foreign LLC, or start a new North Carolina LLC from scratch. Here’s what you need to know:
What is a North Carolina Foreign LLC?
A North Carolina foreign LLC is an LLC that’s registered in another state, but does business in North Carolina. “Foreign,” in this sense, can mean out-of-state companies, and not solely international businesses.
What is domestication?
Domestication is the process of moving a business’ formation documents from one state to another (in this case: North Carolina), and effectively making the new state the new official “domicile” of the business.
Domestication is often the easiest and most affordable way for a business to relocate to another state, and many states—but not all—have laws facilitating the transfer. In North Carolina, this process is referred to as “conversion” in the state statutes.
How do I convert a foreign LLC to NC?
First, a plan of conversion detailing the transfer process must be drawn up and approved by your LLC’s members prior to filing conversion documents.
The North Carolina Secretary of State allows businesses to file Form L-01A for Articles of Organization Including Articles of Conversion, for a $125 fee. Applicants must list the following information:
- The original LLC’s name and the name it will use in North Carolina.
- The original business type of the converting entity.
- The mailing address of the company prior to conversion, and the new mailing address to be used for the LLC afterwards.
- The names and addresses of the persons the articles of organization, their positions as members or organizers of the company, and their signatures.
- The name of the company’s registered agent and the mailing and street addresses of their registered office in North Carolina.
- The phone number and addresses (including county) of the principal office of the transferring business, if the business has one.
- Any additional provisions the LLC elects to include.
- A business email address (optional).
- Date the articles will go into effect (optional, otherwise effective immediately).
Form L-01A can only be filed by mail.
Does a North Carolina conversion process have other uses?
North Carolina’s conversion process isn’t limited to transferring foreign LLCs. Under NCGS § 57D–9-20, most types of foreign and domestic business entities can be converted to a North Carolina LLC, and the same applies to corporations under NCGS § 55-11A.
Why register as a foreign LLC in NC?
Registering as a foreign LLC in North Carolina is another option for moving your existing business there. Foreign registration allows you to maintain your business operations in both states,. That said, when you form an LLC in one state and do business in another, you’ll have to pay taxes in both states, and fees for business fillings tend to be higher for foreign companies. If your business will only operate in North Carolina, conversion might be your best bet.
Should I dissolve my LLC and re-form in NC?
If you don’t mind starting from scratch, you can also dissolve your LLC in its home state and form a new LLC in North Carolina. This is a difficult move compared to the relative ease of conversion, however.
To dissolve your LLC, you’ll need to file dissolution documents in your home state and pay relevant fees, notify creditors, and the IRS of the dissolution, liquidate remaining assets, and make final payments to employees and distributions to members. All that, plus the fact that, as you’re starting a whole new business, you will need also to obtain a new EIN and draft a new LLC operating agreement.
With all these complications, conversion or foreign registration make for a much smoother transfer of your LLC to North Carolina than dissolution and reformation will.