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Advantages of Incorporating a Business in North Carolina

What makes North Carolina a good business destination? A state that recorded a total gross state product of $540,497 billion in 2017 is considered to be the 9th wealthiest state in terms of gross domestic product. A startup company North Carolina can be set up under a variety of industries including top industries like agriculture, financial services, and manufacturing. One of the best cities in the state to set up a business is Charlotte as Charlotte metro area is home to almost 8 Fortune 500 companies. The city of Raleigh is not far behind and is home to the SAS Institute (one of the largest privately held software companies in the world) and CaptiveAire Systems (the largest privately held kitchen ventilation Systems Company in the nation).

Business Growth Incentive for New Businesses

North Carolina is home to some of the top companies and brands in the world including Bank of America, Lowe’s Companies, Hanesbrands, Quintiles Transnational Corp, Compass Group, Total, Duke Energy, PRA Health Sciences, Duke University, BB&T and Carlisle Companies among others. Whether you are planning to register a new company in North Carolina as an LLC or a Corporation, there are distinctive advantages that your business can benefit from. Let’s take a look at some of them.

Advantage#1: The benefits of Incorporation or LLC formation

Corporation

  • Tax Credit Programs: If you register a new company in North Carolina as a C or S Corporation then you can benefit from the state’s Article 3J Tax Credit Program. The program offers eligible businesses credits on franchise tax or corporate tax, tax exemptions on business property and real property and other tax credits depending on the industry including technology development.
  • Pass through taxation: If you register a new company in North Carolina as an S corporation then the corporation or firm will not pay any income tax. Instead, the income or loss of the corporation will be passed on to the stockholders.
  • Independent Life: One of the salient advantages of an S Corporation in North Carolina is that it enjoys an independent life. This simply means that the business entity will continue operations undisturbed even if it faced the death or incapacitation of one or more of its stockholders.

LLC

  • Infrastructure financing programs: If you register a new business in North Carolina as an LLC, you can benefit from this program. There are a range of financing programs to take advantage of including grants and loans program, funds to construct access roads, funds for business expansion, Job Development Investment Grants, Microenterprise Loan Program, and Job Maintenance and Capital Development Fund Grants.
  • Limited Liability: As an owner of a North Carolina LLC, you will be able to enjoy limited liability protection quite similar to what a corporation enjoys.
  • Flexible Profit Distribution: A North Carolina LLC has the benefit of being able to select different ways of distribution of profits unlike in a partnership where the distribution is 50-50.

Advantage#2: Incentive Programs for North Carolina Businesses

Once you register a new business in North Carolina, you will be able to qualify for different types of business incentive programs introduced by Federal, state, and other local agencies. Let’s take a quick look at some of the top programs that your business will benefit from:

  • North Carolina Opportunity Zones: Your business can enjoy benefits through this program only when you register a new company in North Carolina. As a part of the Opportunity Zone (OZ) program, your business needs to be situated in any one of the 252 census tracts or low-income tracts. The salient benefits are:
    – Temporary tax deferral for your business on capital gains reinvested in an Opportunity Fund
    – Permanent exclusion from taxable income earned on long-term capital gains
    – Step-up in basis for capital gains reinvested in the Opportunity Fund
  • Sales and Use Tax Exemptions, Refunds and Discounts: The state offers sales and use tax exemptions, refunds and discounts to eligible businesses. A start-up company in North Carolina can benefit from the exemption on sales and use tax related to sales of machinery and equipment, mill machinery parts or accessories, electricity sold to a manufacturer for use in their facility, with special exemptions in use of piped natural gas. Know More

Apart from these, there are several other business incentive programs like One North Carolina Small Business Program, Green Business Fund, Community Development Block Grant, Industrial Development Fund, Economic Infrastructure Program, North Carolina Rural Economic Development Center Building Reuse and Restoration Grant, and Rail Access Program among others. You can qualify for these programs only after you register a new company in North Carolina.

Are there any Disadvantages of Incorporating in North Carolina?

If you are wondering if there are any disadvantages if you register a new company in North Carolina then it is important to know that the disadvantages are few as compared to the advantages or benefits. The disadvantages are specific to the type of business entity you form. For example, a limited liability company has “Limited Life” while the process of incorporation takes more time than other forms of organization. The bottom line is that North Carolina is one of the best locations to start your business and help it achieve growth.

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