What you need to know about incorporating your North Carolina business
Forming a corporation in North Carolina can be difficult without an attorney’s assistance.
It’s a sad fact that many new small businesses fail, so getting things started on the right foot is essential for your long-term financial success. A key way to do this is to select the right business entity from the beginning. In addition to setting you up for the proverbial long-haul economically, picking the best business entity will also determine the amount of personal and professional liability you may have in the event that the business goes bankrupt or there is a judgment against it.
One of the best ways to both protect your assets and shield yourself from potential personal liability is to form a corporation (but this must be determined based on the unique facts of your situation; having a conversation with a business law attorney will help you select the best business entity to meet your needs). Even though there are companies that promise you can incorporate in just a few minutes with only a minimal investment, the process is actually a much more complicated than that, and failing to do it properly can leave you and your business vulnerable.
If it is determined that a corporation is actually the most logical and appropriate approach, an original name must be chosen for the business (see Title 18, Chapter 4 of the North Carolina Administrative Code for more information), and something called an “Article of Incorporation” must be filed with the North Carolina Secretary of State’s office. This essentially puts the state on notice that you intend to form a corporation, and includes important information about your company’s name, address, stock options and who will be legally designated as the registered agent for the business; this can be changed in the future if circumstances warrant.
Once that is done, an important administrative issue needs to be taken care of, namely that employer tax identification numbers must be obtained from the federal Internal Revenue Service and the North Carolina Department of Revenue.
Moving on to the in-depth matters
After the business has been named, the Articles of Incorporation have been filed and tax identification numbers have been obtained, it is now time to handle the in-depth matters. For example, it is at this stage in the process that you will draft the by-laws for the corporation, create a mission statement if you so desire, get stock certificates, arrange capital to fund the business and designate a bank to handle the company’s accounts.
You will also need to determine how many and what type of directors and officers you will have in the company. North Carolina law requires at least one director in any corporation, but you have the option to have more as elected by the company’s shareholders pursuant to the by-laws.
Once the business is “off the ground,” your responsibilities don’t end. There are annual reporting requirements, the need to take minutes at any official meetings and other ongoing actions set forth in North Carolina law. Having an experienced business law attorney at your side – while your company is getting started and throughout the life of the corporation – can help ensure that you are in compliance with all state and federal laws while still protecting yourself and the business from liability. Contact the Fayetteville law offices of Britton Law for all your business-related legal needs; call them at 910-401-3356 or toll free at 888-811-9738 today.