Making a new corporation is one of the most common reasons for using North Carolina corporation and partnership law. A small business may prefer to file the documentation needed to incorporate a business directly with the state. There are also many companies that provide business formation services for a fee.

The most important factor in performing an NC incorporation is choosing a specific business structure. North Carolina partnership law makes some important distinctions between a corporation and a partnership. A partnership generally does not pay a business tax although the partners are liable for business debts.

Corporate law defines the way in which the following entities interact:

1. Shareholders that collectively own NC corporations. Shareholders may hold special privileges such electing a board of directors, proposing resolutions and sharing in the company’s income.

2. Directors that oversee the company’s activities. The activities of the board of directors are typically determined by the company’s bylaws. The board of directors and the shareholders are typically the same group of people in a small business.

3. Employees that provide expertise and perform labor for the company. Employees are also shareholders in many cases.

Action Steps
The best contacts and resources to help you get it done

Select the best structure for your business according to North Carolina corporate law

Your choice of business types can include corporations, full partnerships and limited partnerships. There are many sites that summarize business laws in North Carolina and you may also need an attorney to explain these laws to you.

I recommend: MAX Filings provides specific information on incorporating in North Carolina and also has links to related resources. Speedy Incorporation and LLC offers incorporation services and also has information on filing business taxes in North Carolina.

Use a company to perform North Carolina corporation registration

There are many online services that can submit the required forms on your behalf in exchange for a fee. However, you will still need to comply with the disclosure, operating and reporting requirements.

I recommend: easynorthcarolinallc is specifically dedicated to forming companies in North Carolina and also provides print-friendly versions of the forms you will need. North Carolina Corporation Services allows you to form corporations and also displays the specific filing fees for North Carolina.

Create a new business by yourself under North Carolina corporation law

Each state has a department that is responsible for the formation of new businesses. You can complete these forms yourself and submit them directly to the correct government department.

I recommend: The Secretary of State for North Carolina has the required forms and fee schedules for incorporating yourself in North Carolina. The NC Small Business and Technology Development Center provides assistance for small businesses and has answers to specific questions on starting a business in North Carolina.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  You will need to select a name before you perform a North Carolina LLC registration. Many online services provide a name search function to determine if a particular name has been used before. The required forms will also provide spaces for more than one business name in many cases. This increases the chances that an unused name can be found.

To form a corporation in North Carolina, you must understand the basics of North Carolina corporation and partnership law. The structure of your North Carolina corporation will be instrumental in the success of your business; it will affect your tax treatment, filing requirements, funding potential and liability obligations.

The ownership plans for your business entity will help determine how to incorporate in North Carolina. A traditional corporation is useful to raise money with investors, or to allow ownership to employees in the form of shares. However, North Carolina corporate law requires complex ongoing paperwork, and will tax your business income both on the corporate and the shareholder level.

North Carolina LLC registration, on the other hand, is less complicated. Taxation occurs only on one level, which may be an important benefit to your company. The structure is more simple, and can require only two people to incorporate.

The options available under North Carolina corporation and partnership law are:

1. A business corporation, incorporated as either a C-Corp or S-Corp;

2. Limited liability corporation (LLC);

3. Limited liability partnership (LLP);

4. Non-profit corporation.

Action Steps
The best contacts and resources to help you get it done

Choose what works according to North Carolina corporation and partnership law

Corporation or partnership? The decision depends on your long term goals for the business. Ownership is easier to divide in a corporation, while partnerships are not designed for growth or sale and do not offer stocks. Taxation is different for both types of entities. And finally, North Carolina corporation registration requires varying filing paperwork and fees for each.

I recommend: FindLaw will guide you through picking the entity structure that works for you. If you need further advice, find corporation lawyers in North Carolina at the AttorneyPages website for advice.

Pursue North Carolina corporation registration

North Carolina corporation and partnership law requires filing certain forms, as well as submitting fees. The filing may include an Article of Incorporation, or for North Carolina LLC registration, Articles of Organization. Fees will vary depending on the structure. NC corporate law allows these filing to be done electronically, and forms can be downloaded online.

I recommend: Print the appropriate forms and find the correct filing fee from the North Carolina Secretary of State website.

Follow North Carolina corporate law closely

North Carolina incorporation requires specific information to be included in filings. The North Carolina Business Corporation Act also details requirements regarding shareholders, naming conventions, and ongoing administrative requirements under North Carolina corporate law.

I recommend: Review Chapter 55 of North Carolina corporation and partnership law, or for partnerships review Chapter 55B. Chapter 55D contains the regulations around filing fees and names.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  The North Carolina Secretary of the State's office will assess penalties and late fees for fees not paid in a timely manner, under NC corporate law. Be careful to get your fees paid no later than 30 days from the invoice date.
• •  NC incorporation requires unique business names, so be sure to search the Secretary of the State's database for your business name before committing to it.

The key to making the most of North Carolina corporation and partnership law is the decision to incorporate your business. A corporation affects your ability to gain capital, controls the amount of debt you assume and determines your tax obligations. However, these advantages must be balanced against the additional taxes your business will incur.

North Carolina partnership law makes a partnership subject only to personal income tax, unlike a corporation. On the other hand, business partners may be held responsible for business debts.

There are several options for forming a company under NC corporate law. These include:

1. North Carolina incorporation as a profit or non-profit corporation. An S corporation (S-corp) is taxed under Subchapter S of the Internal Revenue Code which generally does not include income taxes.

2. A North Carolina limited partnership. This type of partnership has limited partners in addition to general partners.

3. A North Carolina limited partnership. This type of partnership has limited partners in addition to general partners.

Action Steps
The best contacts and resources to help you get it done

Determine the type of corporation that best suits your business under North Carolina corporate law

The most important factors to consider are the personal liability obligations and tax implications. You should also familiarize yourself with the operating requirements and reporting regulations.

I recommend: The North Carolina Department of Commerce provides specific guidelines for starting a business in North Carolina. The Company Corporation provides a summary of the different business types and filing requirements that is specific to North Carolina.

Find an attorney that specializes in North Carolina corporation and partnership law

Incorporating in North Carolina must comply with the disclosure, operating and reporting requirements. North Carolina corporation law specifies these requirements in detail.

I recommend: Prevatte, Prevatte & Campbell in Southport provides expertise in multiple specialties of corporate law. Rayburn Cooper & Durham is in Charlotte and has specific experience in forming businesses for a variety of clients.

Find sites to help you perform North Carolina corporation registration

You must file the registration forms and pay the associated fees as required by North Carolina corporation law in order to perform North Carolina LLC registration. You may also need to file Articles of Incorporation, depending on the type of corporation you decide to register.

I recommend: Inc. Plan allows you to create a business in North Carolina and also provides an extensive list of other services. The Department of the Secretary of State provides the forms you will need for creating your own business and also offers a variety of resources for forming a business.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  North Carolina corporation law requires annual fees and filings to maintain your corporation. Corporations are automatically C-corps unless they specifically register as S-corps with the primary difference being the way they are taxed. One person may frequently hold more than one position in these corporations and many if not all shareholders are also directors in a small corporation.

When starting a new business, there are many details and decisions to make to get a business up and running. One of those decisions is which business structure you want to use for your company. North Carolina corporation and partnership law presents the requirements and functions of each business type. Legally, you'll need to weigh your options as each business structure has its own advantages regarding tax benefits and liability. Studying the following key terms may help you distinguish those differences.

Action Steps
The best contacts and resources to help you get it done

North Carolina C corporation

Incorporation of your business makes it a C corporation. The C corporation status is the most common, as most large companies choose this business structure. The C corporation structure differs from others in that the business' legal identity remains separate from that of its owners, usually the shareholders.

I recommend: Review these answers to frequently asked questions from the North Carolina Department of the Secretary of State.

North Carolina S corporation

A sole proprietorship, or S corporation, is the most common business structure choice among small businesses. This company formation is similar to a C corporation; however, those running an S corporation can claim some of the tax advantages of a partnership business structure.

I recommend: Check out this step-by-step guide on becoming a sole proprietorship in North Carolina from the Citizen Media Law Project.

North Carolina limited liability partnership

In a limited liability partnership, the partners have very different roles. One partner is more hands-on, performing the daily business activities. This partner can be held liable. The other partner's role is similar to that of a business investor, putting up the necessary capital. In North Carolina, the law details a limited shield which significantly reduces limited liability protection compared to other states.

I recommend: Review the actual limited liability partnership statutes from the General Assembly of North Carolina.

North Carolina limited liability company

Filing as a limited liability company (LLC) provides some of the benefits of both a corporation and partnership. An LLC also gains tax benefits and is allowed management flexibility.

I recommend: LegalZoom.com offers specific information about how to form a limited liability company in North Carolina.

North Carolina professional corporation

For those businesses that deliver one type of service, consider forming a professional corporation. These types of corporations are usually regulated by professional associations and can choose the tax obligations of either an S or a C corporation. Law firms and accounting offices are examples of businesses that regularly file as professional corporations.

I recommend: Check out this BizFilings overview of what constitutes filing as a professional corporation.

North Carolina non-profit corporation

Businesses such as community health care centers, domestic violence shelters or child care facilities, may want to consider registering as a non-profit corporation. Choosing this business form, which places restrictions on profits, provides access to federal and state grants, as well as tax exemptions.

I recommend: The Company Corporation provides an overview of the benefits of a non-profit corporation.