Find out how to qualify your LLC to conduct business in North Carolina.
If you own a company that was founded in a state other than North Carolina, you must qualify or register it in North Carolina in order to conduct business there. The regulations for qualifying your international (non-North Carolina) limited liability corporation (LLC) to conduct business in North Carolina are summarized below.
What exactly is a Foreign LLC?
If your LLC is founded in a different state, it is referred to as a foreign LLC in North Carolina. In other words, being foreign does not imply being from another nation. Instead, it signifies that your company was formed under the laws of another state. A domestic LLC, on the other hand, is one that is created in the state in which it operates. This is a prevalent phrase in the United States. An LLC founded in Wisconsin, for example, is a foreign LLC in Minnesota.
Doing Business in North Carolina
If you are “transacting business” in North Carolina, you must register your foreign company with the state, according to North Carolina’s LLC Act. What exactly does this mean? North Carolina’s LLC Act, like most others, does not define the word “transacting business” in respect to overseas registrations.
State regulations determining when foreign enterprises must collect state sales tax in their state, on the other hand, give some advice on the subject. To be obligated to collect state sales tax on sales to citizens of a state, a firm must have a physical presence in, or nexus with, that state. In general, physical presence and nexus are synonymous and refer to:
a storage facility in the state
A shop in the state, an office in the state, or a sales representative in the state are all examples of state-based businesses.
Certain exclusions may apply, and the regulations might become more convoluted in situations such as Internet sales. However, if you have an office, a shop, a warehouse, or workers in another state, you must register your LLC as a foreign corporation in that state.
Some Activities Are Exempt
North Carolina’s LLC Act, like other states’, outlines some actions that do not constitute doing business in the state. Among the objects mentioned are:
defending or settling a lawsuit dealing with internal business affairs such as holding member or manager meetings having a bank account in the state soliciting or obtaining orders where the orders require acceptance outside the state before they become contracts making or investing in loans with or without security securing or collecting debts investing in securities
In terms of issuing or investing in loans with or without collateral, the LLC Act incorporates essential new limitations governing what actions are permitted, such as foreclosure laws. Check Section 57D-7-01 of the North Carolina General Statutes for a complete legal explanation of each of the listed things.
If your LLC’s only operation in North Carolina is one or more of the activities mentioned above, you should not be required to register with the state.
Authority Certificate
You must submit an Application for Certificate of Authority for Limited Liability Company with the North Carolina Secretary of State to register your company in North Carolina (SOS). The application form may be downloaded on the SOS website.
To complete the form, you must supply the same information that you would need to incorporate an LLC in your home state. However, since each state is unique, there may be materials that North Carolina requires that you did not need to submit when you initially formed your LLC. More precisely, for a North Carolina registration application, you must provide:
If the original name of your LLC is not accessible in North Carolina, the name it will use in North Carolina (you may require a different name if your LLC’s original name is currently being used by another registered North Carolina corporation).
If your LLC has a primary office, the state where it was created, the street address and county of that office, the postal address and county (if different from the street address), and phone number if your LLC does not have a major office, an indication or declaration of that fact
the name of your North Carolina registered agent
a certificate of existence or equivalent document from the Secretary of State or equivalent official keeping the records of your LLC in North Carolina, including the county if different from the street address, the mailing address of your LLC’s registered agent in North Carolina, including the county the names, titles, and usual business addresses of the current officials (such as members or managers) of the LLC
You must attach a certificate of existence or comparable document that is less than six months old. A photocopy of the certificate will not suffice. The filing cost for an application is $250.
What Happens If You Do Not Sign Up?
If your LLC does business in North Carolina without a certificate of authority, it cannot sue in the state. It will also be subject to fines and penalties. Furthermore, the LLC will be responsible for fees, taxes, and penalties. This contains, among other things, a possible civil penalty of up to $10 per day for each day business is conducted without a certificate of authorization, up to a maximum of $1,000 per year. However, the lack of a certificate of authority does not render your LLC’s contracts null and void or preclude your LLC from defending a case in North Carolina.
Forming a Foreign Corporation
The regulations and standards for international qualifying in North Carolina are identical whether your company is structured as a corporation rather than an LLC. You will, however, need to utilize a new application form, Form B-09, Certificate of Authority Application. Forms and filing procedures are available on the North Carolina Secretary of State’s website.