Welcome to the topic “How to Incorporate a Business in North Carolina”
You’re at the perfect place if you’re searching to incorporate in North Carolina. You may use this guide to better understand the procedures needed to incorporate your firm in North Carolina. For more details, continue reading!
Select a Name
Your corporation’s name must include one of the words “Incorporated,” “Corporation,” “Company,” “Limited,” or its abbreviation.
The name of your corporation must be distinct from that of other corporate organizations whose names are already on record with the Secretary of State of North Carolina. The North Carolina Secretary of State’s business name database allows users to search for names and see if they are available.
Ensure that the name you wish to use for your business is available before choosing it. On the North Carolina Secretary of State website, you may perform a name search. This will inform you of the availability of your chosen name and whether or not it is not already in use by another company.
By submitting an Application to Reserve a Business Entity Name with the North Carolina Secretary of State, you can reserve a name for 120 days. The application can be submitted by mail or online. There is a $30 filing fee.
We advise finding out if your company name is accessible as a web domain (URL). Even if you don’t currently have any plans for a company website, you might still want to purchase the domain name to stop others from doing so. To search is free.
File Articles of incorporation
By submitting Articles of Incorporation to the Secretary of State of North Carolina, your corporation becomes legally constituted. The name and address of the corporation, the agent for service of process, the number of shares that the corporation is authorized to issue, the address of the principal office, if any, the names and addresses of each incorporator, and the date the articles became effective must all be included in the articles.
Registered agent
Each corporation registered in North Carolina is required to appoint an agent to receive legal process there. This is a person or business that consents to take court documents on the company’s behalf if it is sued.
A domestic or international commercial entity permitted to conduct business in North Carolina, as well as a person who resides in the state, may serve as a registered agent. The registered agent is required to have a North Carolina street address. Prior to designation, the agent must consent to receive service of process on your corporation’s behalf.
Corporate Bylaws
The fundamental guidelines for running your organization are outlined in the bylaws, which are internal corporate documents. They are not reported to the government. Corporate bylaws are not legally needed for your company, but you should nonetheless adopt them since they define how your company will operate and demonstrate to lenders, creditors, the IRS, and other parties that your company is genuine.
Sample bylaws are frequently included in corporate packages. In a corporate records book, save your bylaws, articles, stock certificates, minutes of shareholder and board meetings, and other vital documents. You can purchase a corporate records package from a source or utilize a three-ring binder.
Although corporate bylaws are not mandated by all states, it is nevertheless a good idea for any business to have them. The fundamental guidelines for running your organization are outlined in the bylaws, which are internal corporate documents. They describe the processes and policies of the board of directors and assist in demonstrating your corporation’s legitimacy to banks, creditors, the IRS, and other parties.
Choosing Directors
The original corporate directors are chosen by the incorporator—the person who signed the articles—and serve on the board until the first annual shareholder meeting, at which time the board members who will serve for the next term are chosen by the shareholders. An “Incorporator’s Statement” with the names and addresses of the initial directors should be completed and signed by the incorporator. Retain the statement in the company records book; it is not necessary to file it with the state.
The directors pick the corporation’s officers at the first board meeting, adopt the bylaws, choose the corporate bank, establish the fiscal year for the company, approve the issuing of shares of stock, and adopt the corporate seal. Small, privately held companies are typically free from federal and state securities rules when issuing shares.
Filing annual reports
Domestic and international North Carolina firms are required to submit an annual report to the Secretary of State of North Carolina. By the deadline for submitting your company’s income and franchise tax filings, the annual reports must be submitted.
The Secretary of State’s Online Annual Report site is where you may submit your annual report online. As an alternative, you can submit a paper copy together with your company’s tax return directly to the Department of Revenue. There is a $25 filing fee.
Employer Identification Number
Obtaining a federal employment identification number is required for your business. By submitting an online application on the IRS website, you may get an EIN. There isn’t a filing charge.
S Corporation
An incorporated business that is taxed as a pass-through entity is known as a S Corporation. S corporations are therefore exempt from paying federal taxes on their commercial revenue. Instead, the S corporation’s owners, often known as shareholders, “pass-through” the business’s profits to them. The stockholders then file their individual tax forms, pay income tax, and disclose their portion of the earnings in the form of salary.
Corporations must submit form 2553, Election by a Small Business Corporation, in order to choose the S corporation status for tax reasons. All shareholders must sign the document, which must be submitted within two months and fifteen days of the commencement of the first tax year.
Corporate Bank Account
There are two important justifications for opening a special business bank account. The first is that creating a wall between your personal and corporate assets gives an extra degree of defense in the event that your company is sued. The second is that managing your funds will be a lot simpler if you connect a single account with company accounting software.
License Requirements
Ensure you have all the necessary business permits before you start your firm. The kind of goods or services you want to sell and where you are located will determine what business licenses you require. According to your business, you may need a standard business license, a seller’s permission, a professional license, a food or alcohol license, or some other type of specialized permit or license.
You must abide by all rules issued by the federal, state, and local governments in order to manage your business. Every state has different requirements for company licenses and permits, so be sure to do your homework and prepare your plans accordingly. Learn how to get the licenses and permissions your company needs, or hire a business licensing agency to handle it for you.
Credit Scores
Creating your company’s fundability, being listed with the most significant business credit bureaus, and establishing credit lines while maintaining them in good standing to increase your score are just a few of the variables involved in building business credit.
A high corporate credit score can help you get larger credit lines, lower interest rates on loans, credit cards issued in your company’s name rather than based on your personal credit score, and other benefits. All of these elements work to safeguard your personal assets by transferring liability from you to your company rather than vice versa.
Insurance
The following step is to secure business insurance to safeguard your company. Your insurance needs and obligations may change depending on the sort of organization you’re running. Well what actually is business insurance? Business insurance shields your company’s assets from losses that may inevitably arise from conducting business, such property damage or legal actions.
Foreign Corporations
To conduct business in North Carolina, all corporations formed outside of North Carolina must register with the state’s secretary of state. For process serving purposes, foreign firms must choose a registered agent who is physically based in North Carolina. Fill out an Application for Certificate of Authority to register.
A copy of the Secretary of State’s or a comparable official’s original certificate attesting to the foreign corporation’s good standing or existence that is no older than six months must be submitted with the application. The form has to be mailed in. There is a $250 filing fee.
Check the North Carolina company name database to see if the corporation’s name is obtainable before filing. The foreign corporation must utilize a fake business name in North Carolina if the name is not already in use. A copy of the board of directors’ resolution adopting the fake name, certified by the board’s secretary, should be attached to the application.
Professional Corporations
Many states require that practitioners in specific professions (such as doctors, attorneys, and accountants) create a particular sort of organization known as a professional corporation or professional service corporation in order to incorporate their practice. To find out which professions are necessary to establish a professional company in your state, you must contact the corporate filing office of your state, often the Secretary of State or corporation commissioner.
Also read: How to Secure Capital for Startup Business
