Steps to start a business in North Carolina
The state of North Carolina has one of the best legal & regulatory climates apart from a top-tier workforce and extensive infrastructure. A top North Carolina registered agent like IncParadise can help you form a new business in the state but there are several other areas that you need to focus on prior to launching your company. Let’s take a look at some of the key areas that will ensure that you are able to achieve business objectives.
1. Prepare a North Carolina Business Plan
Every business is different and hence their business plan should focus on the specific activities of the said entity. Normally, a business plan is prepared before you register a business in North Carolina. The plan should ideally be extremely detailed and take into account everything from business objectives to company milestones, financial objectives, marketing plans, and other key areas of management and operations. A good plan will also reveal how sustainable your idea truly is from a short-term and long-term point of view.
There are many advantages to preparing a business plan. It helps you to create the best pricing strategies and prepare for upcoming challenges. A small business in NC may also require funding and hence an informative and research-oriented plan would attract new investors. Let’s look at the important components of a general business plan.
- Executive summary
- Company description
- Analysis of the Industry
- Competitor analysis
- Description of Product and services
- Management structure
- Operating Plan
- Company Milestones
- Sales and Marketing Plan
- Financial plan and projection
2. Attend Entrepreneurial Training or Development Programs in North Carolina
Systematic entrepreneurship training along with development programs facilitate active as well as passive learning. If you are a first-time entrepreneur planning to start a business in North Carolina then this type of training will help you to identify avenues of economic growth and development and also leverage such avenues. Entrepreneurship training in the state aims at equipping participants or small business owners with the required skills and relevant knowledge.
3. Choose a Business Structure for Your North Carolina Business
There are several important decisions to be made before you register a business in North Carolina. One such decision is that of choosing the right entity structure. The structure plays a key role as the chosen structure will affect the legal liability of a company, its taxation, its ability to get funds, as well as the management, and the overall operations. Whether you choose to incorporate in North Carolina or form an LLC or a sole proprietorship, each structure has a different tax treatment and comes with its own limitations and benefits. The registration or new business formation processes would also be different. The type of business entities you can choose in North Carolina are:
4. Naming Your North Carolina Business
The name of a business is the identity of that very entity. Hence, it is considered one of the most important elements of branding or marketing strategies. The name of a company is connected to everything associated with the entity from its products and services to its credibility and customer services. The single most necessary requirement to start a business in North Carolina is naming your business. You will not be able to register NC business online or offline without a name. Different states have different criteria when it comes to choosing a company name. Similarly, North Carolina has its own naming guidelines and process. Let’s take a look at how to name your entity in NC.
- The first step is to follow the naming guidelines as specified by the state of North Carolina. The naming guidelines will vary according to the entity structure.
Example: If you choose to incorporate in North Carolina then the name should contain words like “corporation”, “incorporated”, “limited”, or abbreviations like “corp.”, “inc.”, or “ltd.”
- The North Carolina General Statutes also state that a business name should be unique and distinguishable. You can check with the Register of Deeds office in the county where you are planning to form your entity. You can also conduct a business name availability check.
- If your chosen name is available then you will need to reserve the name. You can do this using the form known as the Application to Reserve a Business Entity Name. The form needs to be duly filled and submitted to the Department of the Secretary of State along with a fee of $30. The name can be reserved for 120 days.
5. Choose Your Location for North Carolina Business
One of the details of a new company that is the key to business operations is the location of your business. You need to identify the right location before you register a business in North Carolina. While choosing a location, you need to consider several factors such as proximity to trade routes, logistics infrastructure, customer base or targeted audience, accessibility, market conditions, competition, and the availability of a skilled workforce. Different cities or counties in the state are home to specific industries or industrial sectors and that may prove advantageous.
For example: If you start a small business in NC and if the primary business activity is e-commerce or an online store then the city to choose is Raleigh. The city is currently ranked No. 1 for online businesses due to access to high-speed internet service as well as an environment influenced by technology and research.
Similarly, several other cities in the state are considered good choices for a variety of business activities. The top cities where you can form a new business are:
- Catawba County
You can also choose a destination based on state incentives programs like the North Carolina Opportunity Zones and Foreign trade zones (FTZ). These zones are spread across the state and provide numerous benefits like tax exemptions. It is also important to check local zoning ordinances as they provide rules and regulations pertaining to city or county licensing, commercial spaces, building codes, local permits, and land use.
6. Register Your North Carolina Business
If you want to start a business in North Carolina then there are certain state-governed processes that must be followed. You have to meet all state requirements and those governed by the 2020 North Carolina General Statutes for businesses. Once you have chosen a structure and reserved a business name, the next step is to apply for registration with the North Carolina Secretary of State.
It is important to note that the business registration process, forms, and fees will vary according to the structure of the business. Let’s look at an example to understand this.
Example: If you want to incorporate in North Carolina then you will have to submit the Articles of Incorporation pursuant to NC Gen Stat § 55-2-02 (2020). There will be a filing fee of $125 and it has to be submitted with the Business Registration Division, North Carolina SOS. Similarly, if you want to form an LLC then you will be required to file a Articles of Organization pursuant to NC Gen Stat § 57D-2-21 (2020). The filing fee will be the same as that of a business corporation.
The most important part of the filing process is the preparation of the Articles of Organization or the Articles of Incorporation. The process to register a business in North Carolina may seem complex as you are required to provide a wide variety of information. This is where a reputable North Carolina registered agent service like IncParadise can assist you. Whether you want to incorporate or form an LLC we can help you to register your company with the state.
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7. Get Your EIN
Every state in the USA has some form of business tax that every new and existing company has to file. Although North Carolina has a tax-friendly environment, there are some taxes applicable in the state. In order to file taxes, an entity will need a tax ID known as the Employer Identification Number (EIN). The EIN is a unique tax ID number that is issued by the Internal Revenue Service (IRS).
8. Open a Business Bank Account for your North Carolina Business
Operating a company, irrespective of the structure and the business activity, is always a challenging task. When it comes to maintaining a financial record of all transactions, it becomes an even more difficult task. This is why it is always recommended to open a business bank account. This account is different from personal banking in many ways as it provides several features associated with operating a company. Some of the features include digital invoicing, automated bookkeeping, 24/7 online or mobile banking, integration of payment gateways, higher card security, and lines of credit among others.
You can open a business bank account before or after you start a business in North Carolina. Some of the benefits of a business checking account are:
- Your bank account will help you to track business income as well as expenses
- It will enable client or vendor payments with ease
- Enable streamlining of all financial records and tax information of your company
- A business account creates a professional image and increases credibility
- Helps in providing clear financial records for auditing purposes
One of the top technology-enabled modern-day banking solutions that you can opt for is Cheqly. You can open a business account online in the USA with Cheqly from just about anywhere in the world. There are many benefits of this digital banking account as it will provide you with physical and virtual debit cards, digital wallets, allow ACH payments, and enable domestic and international wire transfers.
9. Obtain License and Permits
The importance of a business license lies in the fact that it allows your company to operate in a specific location within a city or county. The need to apply for licenses or permits arises after you register a business in North Carolina. Different states in the USA have different business license requirements, regulations, and structures. In North Carolina, there are no generic business licenses and some businesses may require a single license while others may need multiple permits or licenses. Let’s take a look at the business licensing requirements in the state after you register NC business online.
- North Carolina Certificate of Registration – This is also known as the Sales Tax License. If you start a business in North Carolina where selling products directly or indirectly to consumers is the primary activity, then you will need to register with the Department of Revenue. This license will be applicable even if you are selling online or have an e-commerce store.
- Regulatory and Occupational License – The second most important form of licensing is the state-issued, regulatory and occupational licenses or permits. There are 950 categories of licenses and encompasses various occupations right from accredited reinsurers to wine shops, transporters, recreational therapists, Business Enterprises Program Operators, CPA firms, and food establishments among others. The issuing authority will vary according to the license being applied for. If you start a small business in NC like a food establishment then the licenses and permits will be issued by the NC Department of Health & Human Services.
- Municipal or County License – This is a type of local license that will be determined by the city or county your company is based in. If you register a business in North Carolina and the company is operating out of Raleigh then you will need to apply for necessary permits from the City Council. You will also need to obtain the required approval from the Zoning staff.
The type of license or permits required by your business will vary according to the primary business activity and the location of the company. The licensing regulations and requirements can be quite an exhaustive process. This is where our “Business License Research Report” service can provide necessary assistance. This is a detailed report-sharing service offered by IncParadise, a top North Carolina registered agent. The report contains a list of filing instructions, supporting document requirements, and the fees for all business licenses and permits in this state.
10. Register for Taxes
Each state in the USA has its own taxation laws governing all businesses. If you start a business in North Carolina then the taxes applicable will vary according to entity structure and business activity. The different forms of taxes that your company may have to file are corporate income tax, privilege license tax, sales & use tax, franchise tax, and state withholding taxes.
11. Obtain Business Insurance
Business insurance is an important component of running any company successfully. The right form of insurance will help you in covering any costs associated with liability claims and property damage. There are different types of insurance available for businesses such as:
- Business owner’s policy (BOP) for small businesses
- Commercial property insurance
- Professional liability insurance policy
- General Liability Insurance (GLI)
- Business Income Insurance
- Workers’ Compensation Insurance
12. Annual and Ongoing Requirements
Once you start a business in North Carolina or begin operating in the state, it is important to ensure the said company fulfills all state compliances. This is also known as annual maintenance and helps with keeping the company active and current in the records of the North Carolina Secretary of State. Some of the important annual requirements include:
- The filing of an annual report is pursuant to the North Carolina General Statutes. There is a specific due date for each form of entity and this report has to be filed within the specified date
- Filing of tax returns like corporate tax or sales & use tax
- Paying off any payments, penalties, or fees due within sixty days