Home-Based Business in North Carolina

If you’re planning to start a home-based business in North Carolina then it’s important to understand the various facets of such an entity. A small business that can be operated over the internet or offline is considered to be working from home. You can start a home-based business from anywhere within your home or the residence of a friend like modern-day cloud kitchens or IT consultancy startups from a garage. Once you have the right home business licenses in North Carolina, your startup will be fully operational and you can provide services or goods locally, nationally, and even go global.

Why start a home-based business in North Carolina?

The business market has shifted focus in the last few years and home-based businesses seem to be the new trend. The greatest benefit or salient aspect of this type of business is that the administrative and managerial activity is confined to the personal residence of the owner. It is easy to start a home-based business in North Carolina because of the state’s pro-business climate. There are several advantages to running a company from home and some of them include:

• Low startup cost – How to start a home business in North Carolina and the cost associated with it are important topics. A report by the U.S. Small Business Administration reveals that the startup costs for home-based businesses can vary from $2,000 to $5,000. The overall cost of registering and operating a new business in North Carolina is lower than in several other states like New York, Minnesota, Wisconsin, Nebraska, and West Virginia, among others. Apart from this, operating from your residence will mitigate the cost of renting or leasing commercial space and the costs associated with overheads and utilities.
• Funding programs and state resources – One of the main drivers of success for home-based business ideas in NC is finances. More often than not, such companies can experience business failure because of a lack of funds, overestimation of revenue, and underestimation of operating costs. The state of North Carolina provides several resources for small companies operating from home. The most valuable state resources are grants and funding programs. Some of the top programs include Inception Micro-Angel Funds (IMAF), Carolina Small Business Development Fund, Business Loan and Growth Programs, Federal Community Development Block Grant (CDBG), and Local Grants Program for Minority and Women-owned Businesses among others.

Popular home-based business ideas in North Carolina

The Internet and technology have not only made business processes smoother and more efficient, but they are also responsible for creating alternate revenue streams for home-based businesses. Today, there is no dearth of home-based business ideas in NC and you can start one with ease. Some of the most popular kinds of home businesses are:

• Virtual Assistant (VA) – A Virtual Assistant or VA is an independent contractor who specializes in providing a variety of administrative services to an individual client or a firm.
• Recruitment Agency – It’s also known as a staffing agency and plays a key role in sourcing candidates according to company or industry requirements.
• Pet Daycare Services – This is one of the popular home-based business ideas in NC. A pet daycare service provider can also offer additional services like grooming, training, bathing, and similar services.
• Print-on-demand – This is a small part of a bigger advertising industry. You will need home business licenses in North Carolina to operate this type of firm. It involves the design and printing of T-shirts, new employee packets, mugs, and other apparel, as well as home goods.
• Meal Delivery Services – You can conduct this type of business using your home kitchen. This is a type of meal kit service where freshly prepared meals are delivered right to the customer’s doorsteps or offices.
• SEO Services – A Search engine optimization (SEO) service is one of the top home-based business ideas in NC. There are several aspects of SEO where you can offer your expertise like Google Adwords Services, Google Analytics Management, Google Analytics Support, Social Media Optimization, and Content Management among others.
• Online Classes – This is one of the new categories and will require home business licenses in North Carolina or occupational permits. You can provide online classes for a variety of subject areas from high school subjects, to professional skills and competencies through various online platforms.

Form your North Carolina home-based business Today!

Steps to Start Home Based Business in North Carolina

It’s time to take your business idea to the next level. However, it’s extremely important to be certain that you’ve identified all of your business related requirements. The following steps are tremendously important for launching and operating your home-based company successfully. Let’s look at some of the key areas to focus on.

1. Prepare your home-based business plan

If you’re interested in learning how to start a home business in North Carolina, then the first step would be to create a good business plan. A strategic plan can vary depending on the industry sector you are planning to focus on. The importance of a plan lies in the fact that it will create a path that your company can follow. Some of the key components to include in your business plan are:

• High-level overview or Executive summary of the company
• Company Description
• Industry sector
• Target audience
• Products or Services
• Existing competition
• Revenue generation model
• Marketing and Sales Strategy
• Startup Expenses
• Funding for the business

2. Check zoning laws and regulations for your home-based business

It is important to check zoning laws and regulations before you start a home-based business in North Carolina. Each city or county has its own zoning ordinances and these rules define how a residential or commercial property situated in a specific geographic zone, can be used. Accordingly, you will also have to apply for home business licenses in North Carolina. Zoning laws can have an impact on the location of your business as they have been designed to protect public health and safety. Let’s look at an example to understand how this works.

Example: If you are planning to start your home business in Raleigh then zoning is governed by the Planning and Development Department. Home businesses are allowed in Raleigh according to zoning ordinances but you will be required to apply and obtain a permit to operate such a business. You will need to define whether the said business falls under Home Occupation or Live-Work. Most home-based business ideas in NC fall under the Live-Work category for which you will need to apply for a Live-Work Permit Application pursuant to Unified Development Ordinance (UDO) Section 6.7.3.E. If you are planning construction to the residential dwelling for business purposes then you will need to apply for a Residential Permit Application.

3. Choose a business structure and register your business

If you are wondering how to start a home business in North Carolina, it involves many processes like the new business registration or incorporation process. Although, the most important step is to choose the right legal structure as this will determine the registration process, as well as several other facets such as management, tax rate, documentation requirements, liability protection, and fundraising capabilities. The registration process forms and fees vary depending on the chosen structure.

Register your home-based business in North Carolina!

4. Check if you need to obtain an EIN

If you plan to start a home-based business in North Carolina or choose self-employment while working from home then at some point, you may need to apply for an employer identification number (EIN). This is a unique 9-digit number also known as the Federal Employer Identification Number (FEIN), and is assigned to businesses by the Internal Revenue Service (IRS). The requirement for an EIN is determined by the legal structure and other factors like hiring employees or if you have a Keogh plan.

5. Register for taxes

If you are planning to operate your business from home or your residence then you may be required to register for taxes. The type of taxes you have to file will depend on certain factors like:

• The type of business structure you chose to register such as a corporation, LLC, or partnership.
• Home occupation or business activity like selling of products or services.

6. Get insured

Now more than ever, entrepreneurs are running their businesses from their residences due to easier accessibility to the Internet and technology. So, if you want to start a home-based business in North Carolina, you will need to maintain insurance for your business. The standard homeowners’ insurance that most people may have will not include protection that is specific to your business property such as technology, equipment, and software among others. Hence, choosing the right home-based business insurance will help with safeguarding your interests.

• You can add an endorsement to your existing homeowner’s insurance policy like doubling the standard policy limits.
• You can also add an endorsement that is specific to your business needs.
• You can opt for a standalone business insurance policy with better coverage limits.
• You can choose a policy that provides business liability coverage, property coverage, electronic data processing equipment coverage, and loss of income coverage among others.

7. Obtain necessary licenses and permits

Once you’ve registered your home-based business ideas in NC, the next step is to submit your application to obtain the appropriate business licenses. A business license or permit allows you to operate your home-based startup in the state without any hiccups. Home business licenses in North Carolina can be categorized under the following:

• Sales Tax License – This type of license is mandatory for a home business that sells products directly or indirectly to its consumers. A few great examples would include an e-commerce website or software developer and seller.
• Occupational or Professional License – If you’ve started a home business that focuses on a specific occupation or profession then you will have to apply for these types of home business licenses in North Carolina. A few examples of such occupations would include an architect, attorney, boarding kennel operator, and Certified Public Accountant (CPA) among others.
• County Licenses – Licenses and permits will be issued by the city or the county when you start a home-based business in North Carolina. You will need to check with the county where your company is located for the appropriate municipal licenses.

8. Market your business

Marketing is integral to the growth of any business including home-based business ideas in NC. Marketing your home-based business doesn’t have to be an expensive affair. The internet along with smart marketing strategies will provide just the right amount of exposure and help save money. Here are some methods, tools, and strategies that can be quite useful:

• Email weekly newsletters.
• Use word of mouth.
• Start a company website.
• Start a company blog.
• Use banners and posters on social media platforms.
• Use digital advertising like PPC (Pay-Per-Click).
• Create listings in major online directories like Yelp.
• Partner with another company to promote your business.
• Offer complementary products or services.

Ready to Start Your Home-Based Business in North Carolina?

When learning how to start a home business in North Carolina, it is important to understand that this type of entity will be different from other commercial enterprises. Choosing a structure is important because it will determine the advantages and liabilities of your company. If you want to operate your home-based company successfully and need a little bit of assistance, our experts can guide you through the registration process.

Introduction – Why North Carolina?

If your business is ready for expansion and growth, or you are planning to launch a new business, then choosing a location is very important. Selecting the right location depends on several factors including taxes, customer segment, infrastructural support, logistics, competition, import and export, cost-effectiveness, and state small business incentives. North Carolina offers support programs that are attractive to domestic and foreign entities, as well as for relocating a business to North Carolina. Today, NC is home to several top companies including Bank of America, Honeywell, Lowe’s, Truist Financial, and Duke Energy among others. There are many ways to move your company to this state including entity domestication in North Carolina, but first let us identify the numerous benefits this state has to offer.

Favorable business climate

One of the biggest reasons for moving your business to North Carolina is the favorable business climate. North Carolina is ranked #1 on the list of top states for business, as well as states with the best business climate. Some of the reasons for this top ranking are:

• The state has one of the lowest corporate income tax rates
• It has one of the lowest overall business costs
• The construction costs in the metro areas of the state are 15 percent lower than in other states
• The legal climate and regulatory environment is also considered to be extremely favorable
• The state offers an unparalleled quality of life
• North Carolina is centrally located in the East-Coast region of the USA

Excellent infrastructure

The overall business climate in North Carolina is driven by several other smaller factors including infrastructure. The state’s public and commercial infrastructure have been growing at a steady pace making it favorable for relocating an LLC or moving a corporation to North Carolina. The state is home to 4 major international airports and 2 seaports that enable trade. It’s also home to the largest consolidated rail system and the Second-largest state-owned highway system in the USA, thus providing transportation advantages to businesses and their workforce.

Quality workforce and education

A good education is one of the main driving factors of growth and expansion for any company because it creates competent employees and a strong workforce. Today, North Carolina is considered to be a high-skill, knowledge-based economy driven by innovation and technology. This type of economy also demands a workforce that is adaptable and skill oriented. Hence, they emphasize quite a bit on science, technology, engineering and math (STEM) education. Relocating a business to North Carolina means that your company will have access to a strong, skilled, and professional workforce. This is due to several of the top local educational institutions like The University of North Carolina, Wake Forest University, and Winston-Salem State University among others. The state also has a workforce infrastructure for promoting training and education continuation programs to help employees learn on the job.

Business incentives and assistance

North Carolina has several kinds of assistance and support programs established for small businesses and medium-sized enterprises. Amongst them are the performance-based incentive programs that have been created to help entrepreneurs with relocating a corporation or moving an LLC to North Carolina. These programs also help lighten the overall tax burden and lower the initial costs for the entity. Some of the top business incentive and assistance programs in the state are:

• Job Development Investment Grant (JDIG)
• One North Carolina Fund (OneNC)
• Rural Division, Building Reuse Program
• Community Development Block Grant, Economic Development Program
• Public Infrastructure Funds
• Historic Preservation Tax Credit
• Sales and Use Tax Exemptions and Refunds
• Utility Account Grants
• Customized Training Program
• City & County Grants
• New Market Tax Credit program

Steps to Move a Corporation to North Carolina

If you are thinking of moving your business to North Carolina then there are many benefits that the state has to offer from infrastructure to business development programs. When moving your business, you may have several questions such as, “Does North Carolina allow domestication, and what is the applicable process for relocating a business or corporation?” There are primarily two options for moving your corporation to this state, so let us look at these options in detail.

Register as a foreign corporation

The first option for relocating a business to North Carolina is registering it as a foreign company. This is an option for owners who want to operate their corporation in their home state (state of incorporation) as well as in other states like North Carolina. The process for moving a corporation to North Carolina is through a foreign qualification. The process is governed by the 2020 North Carolina General Statutes, Chapter 55, Article 15. The process for foreign qualification is as follows:

• Designate a registered agent in North Carolina for handling service of process, pursuant to NC Gen Stat § 55D-30 (2020)
• If your existing name is not available through the name availability search, then you will be required to register a fictitious name pursuant to NC Gen Stat § 55D-22 (2020)
• File the Applications for a Certificate of Authority pursuant to NC Gen Stat § 55-15-03 (2020)
• You will also need to submit a Certificate of Existence (Certificate of Good Standing) issued by the home state or state of incorporation

Do you want to start a foreign corporation in North Carolina?

Dissolve a home Corporation and establish a new Corporation in North Carolina

The second option for moving a corporation to North Carolina is through dissolution. This involves dissolving your company in your home state, then going through the process of domestic incorporation in North Carolina. Moving your business to North Carolina will require you to follow the laws and process of dissolution of the home state. The process of dissolution will also vary according to the state and may involve voluntary, judicial, and administrative dissolution. Some general procedures are applicable in all states including:

• Approval of dissolution of a corporation by incorporators, directors, or shareholders
• Filing Articles of dissolution in the home state
• File any federal, state, and local taxes and claims outstanding
• Publication of notice of dissolution if applicable
• Wind up all affairs in the home state such as canceling business licenses and permits

• Appoint a registered agent in North Carolina for service of process
• Identify and reserve a business name using the Application to Reserve a Business Entity Name
• File Articles of Incorporation pursuant to NC Gen Stat § 55-2-02 (2020) along with the appropriate fee
• Prepare bylaws for the North Carolina Corporation
• Apply for business licenses and permits

Incorporate in North Carolina with ease!

Steps to Move an LLC to North Carolina

If you’re thinking of relocating a business to North Carolina then you can benefit from state support programs including small business incentives and grant programs to lower taxes and gain access to the availability of a skilled workforce. You may have certain questions regarding relocation like, “Does North Carolina allow domestication, and what is the process for moving an LLC?” There are two options available and each option has its own process, laws, and requirements. Let us look at each of the options in detail.

Register as a foreign LLC

The first option for moving an LLC to North Carolina is to register an existing entity as a foreign LLC. This process is also known as foreign qualification and it works best for business owners who are thinking of expanding their business to this state while remaining operational in their home state. Relocating a business to North Carolina through foreign qualification will require several steps. This type of entity relocation is governed by 2020 North Carolina General Statutes, Chapter 57D – North Carolina Limited Liability Company Act, Article 7 – Foreign LLCs.

• Hire and maintain a registered agent in North Carolina for handling service of process pursuant to NC Gen Stat § 57D-7-06 (2020)
• You can keep the existing name of your foreign LLC only if it is available. If the said name is unavailable then you can choose a DBA by filing for an assumed name certificate.
• File the Certificate of Authority to transfer an LLC to NC through foreign qualification pursuant to NC Gen Stat § 57D-7-03 (2020)
• Submit a Certificate of Existence also known as a Certificate of Good Standing issued by the home state

Apply for LLC foreign qualification in North Carolina

Dissolve a home LLC and form a new LLC in North Carolina

The second option for moving an LLC to North Carolina involves dissolving the home state LLC and registering the domestic limited liability company in this state. The rules for dissolution are governed by the LLC Act., of the state where it was initially formed. Some finer points of dissolution will remain the same in all states like the approval of a dissolution and the filing of certificates or articles of dissolution. It’s important to note that an LLC can be dissolved either voluntarily or involuntarily. The process for moving your business to North Carolina through a dissolution will involve the following steps:

• Approval of dissolution of an LLC through unanimous member consent
• Filing Articles of dissolution in the home state
• File any outstanding claims as well as federal, state, and local taxes
• Publish a notice of dissolution if applicable
• Cancel business licenses and permits

• Appoint a registered agent in North Carolina to handle service of process
• Conduct an LLC name availability search and reserve a business name pursuant to NC Gen Stat §55D-23 (2020)
• File Articles of Organization pursuant to NC Gen Stat § 57D-2-21 (2020) along with the appropriate fee
• Prepare the North Carolina LLC operating agreement
• Apply for the appropriate business licenses and permits

Register your LLC in North Carolina Today!

Move Your Business to North Carolina with IncParadise

IncParadise is one of the top registered agent service providers in North Carolina. We provide a variety of services to fulfill different business requirements. We can help you with the process of relocating an LLC or moving a corporation to North Carolina by facilitating the paperwork for dissolution in your home state, foreign qualification, and new business registration in NC.

North Carolina Registered Agent

A registered agent in North Carolina is a company or an individual who is recognized by the state as the official point of contact for a limited liability company or a corporation operating in the state. A registered agent is also known as a resident agent in many states. The registered agent services in North Carolina can vary from one agent to another but their primary role is to receive service of process, as well as other legal and official documents and communications on behalf of the said entity.

What is a North Carolina registered agent?

A registered agent in North Carolina is also known as an agent for service of process, and even a statutory agent. A registered agent (RA) has to be hired in compliance with state laws to receive service of process (SOP) on behalf of specific entities or forms of businesses. Every state in the USA has business laws relevant to maintaining an agent in that state. The 2020 North Carolina General Statutes governs registered agent services and other business and RA requirements. The North Carolina registered agent requirements and laws also determine the change of a registered office or registered agent and the resignation of a registered agent in the state.

What are the roles and responsibilities of a registered agent in NC?

Federal and state business laws have defined the roles and responsibilities of a registered agent and they are more or less the same for all states in the nation. It is important to note that registered agent services in North Carolina are necessary for both new and existing businesses. The responsibilities of a NC registered agent include the following:

• Service of Process – The primary business objective that a registered agent in North Carolina fulfills is service of process. Service of process refers to the action of informing a company, firm, or individual regarding a pending lawsuit against them or the entity. When you appoint RA in North Carolina then they will also have to receive any legal notices as a part of the service of process. They will also receive any summons or writs forwarded by any person representing the office of the Secretary of State.
• Business Related Documents – If you form a new business in North Carolina then the state will send you important documents concerning your company. Whether your company is a domestic or foreign entity, all business-related mail is important as it may include information related to compliance with state annual requirements. When you appoint RA in North Carolina, it becomes the responsibility of the said agent to receive all business documents on behalf of the company.

Who can be a registered agent for your NC business?

The laws for a registered agent vary from one state to another. It’s also important to note that each state including North Carolina has its own rules regarding the qualification criteria for a registered agent. The North Carolina registered agent requirements state that a firm or an individual can act as your resident agent or statutory agent if they qualify.

What are the requirements of an NC registered agent?

The state of North Carolina has outlined the requirements for a registered agent. The statutory agent can be a registered business or an individual resident of the state. It is always recommended to conduct a North Carolina registered agent search based on the state requirements to ensure that you or your company can benefit from the best possible services. Some of the requirements pursuant to Article 4 of the 2020 North Carolina General Statutes are:

• The foremost North Carolina registered agent requirement is to accept service of process and official notifications on behalf of their clients pursuant to NC Gen Stat § 55D-33 (2020)
• An NC agent should have a registered office or should maintain a physical address pursuant to NC Gen Stat § 55D-30 (2020)

Are you looking for top Registered Agent Services in North Carolina?

Can I be my own registered agent in North Carolina?

Yes, you can be your own registered agent in North Carolina. It’s important to make sure that you meet all state requirements as prescribed by law. When applying as an individual, there are specific requirements to qualify and they include:

• To be a North Carolina registered agent, you should be over 18 years of age
• You need to have a physical street address, and a PO Box address is not allowed
• You should be available during office hours throughout the week

How to choose a registered agent in North Carolina?

A registered agent becomes necessary when you start a new business in North Carolina or during the planning stages before registering with the state. This is because the 2020 North Carolina General Statutes, NC Gen Stat § 55D-30 (2020) states that each domestic, foreign, and nonprofit entity must appoint a registered agent in North Carolina and continuously maintain a registered agent in the state. Finding the right agent may seem difficult, especially with hundreds of qualified agents readily available for service. This is where the North Carolina registered agent search becomes important. Statutory agent services can vary from one agent to another and so do their pros and cons. However, there are some tips that you may want to consider:

• Look for a professional registered agent who will ensure all types of filings are taken care of.
• When conducting a North Carolina registered agent search, consider your options for customizable electronic notification services.
• Price should not be the focal point of consideration, quality and value should be
• A reputable agent will provide additional compliance tools to help you fulfill and maintain annual state requirements.
• If you appoint a registered agent in North Carolina then he/she or the company should keep regular business hours.
• A nationwide registered agent service like IncParadise can offer long-term benefits such as assistance with foreign qualification or moving your business to other states.
• Choose an agent who specializes in handling sensitive documents and offers a forwarding service too.
• They should provide reliable software like the Entity Management Software by IncParadise.

Why choose a professional registered agent service in NC?

The primary reason for conducting a North Carolina registered agent search is to find a highly professional service. Hiring a registered agent in this state is a legal requirement, but finding a service that is consistently available every business day during business hours can be difficult sometimes. If your chosen company takes a holiday and misses the opportunity to receive a document on your behalf, or doesn’t offer automated services that provide notifications about your upcoming or overdue annual report, then it can cost your company greatly. Hiring a professional registered agent services in North Carolina like IncParadise will allow you to enjoy many benefits including:

• A professional registered agent service will maintain regular business hours so that will allow them to receive all legal notices and important state or official documents.
• An NC resident agent will not only receive official documents but should also forward them to the owner of the said company.
• A professional registered agent will have a physical address that is compliant with state requirements.
• A registered agent in North Carolina will help you handle and organize all of your business-related documents.
• Some registered agent services provide offsite storage facilities for legal and sensitive documents.
• One significantly important service offered is sending timely automated reminders like those sent for filing your NC annual reports.
• When you appoint a registered agent in North Carolina, your private information will remain protected.

Want to hire us as your North Carolina registered agent?

How to change a registered agent in NC?

There are many scenarios and reasons why any business would want to change their registered agent in North Carolina. Some of the most common reasons include:

• You want a professional service provider in the state
• Your existing RA doesn’t provide service in North Carolina
• Your current registered agent doesn’t meet NC state requirements
• Your designated resident agent has moved out of this state
• You have been the registered agent for your company but want to appoint a registered agent in North Carolina because your business has expanded

File and submit Statement of Change of Registered Office and/or Registered Agent

If you are considering changing your registered agent in North Carolina then the first step is to file and submit the Statement of Change of Registered Office and/or Registered Agent (form BE-06). The form must be submitted to the North Carolina Secretary of State (SOS), Business Registration Division. You can submit it online or through postal mail.

• The complete street address and county of the new registered office.
• New registered agent’s name, signature, and title.
• The old registered agent information including their name and street address.

Want to change your North Carolina registered agent?

Choose IncParadise as Your North Carolina registered agent!

If you’re planning to register or incorporate a new business in North Carolina then it’s mandatory to maintain a registered agent in the state. It’s important to conduct a North Carolina registered agent search to find a professional and reputable service. IncParadise is one of the reputed and professional registered agents in this state who adheres to the North Carolina registered agent requirements established by the office of the Secretary of State.

Doing Business in North Carolina

North Carolina is one of the top states that supports business ideas by providing resources that are necessary for the growth of every type of entity. The state has a strong economy and several industries that have gradually become drivers of this growing economy. With a robust startup ecosystem of accelerators and incubators, along with the North Carolina small business incentives; the state has become a haven for tech entrepreneurs. Some of the top companies doing business in North Carolina include Lowe’s, Bank of America, Honeywell, Compass Group, Family Dollar, Food Lion, HanesBrands Inc., VF Corporation, and Truist Financial among others.

Why do companies prefer to do business in North Carolina?

Entrepreneurs and first-time business owners prefer North Carolina due to its geographical, industrial, and infrastructural advantages. One of these top advantages is the availability of resources such as the North Carolina small business grants and exemption programs. There are several factors that can make doing business in North Carolina easier and they include:

• Low taxes and Exemption programs – One of the reasons that small business owners prefer to start a company in North Carolina is because of the low taxes. This state has one of the lowest Corporate Tax Rates in the nation at 2.5 percent. Exemption programs further enable businesses to reduce their overall business tax burden, as well as other related costs. These exemptions are a part of the North Carolina small business incentives program and are available according to the industry a company is categorized in.

  Example: If you start a company in manufacturing then you can take advantage of Sales and Use Tax Exemption on machinery. If you are doing business in North Carolina and are based in a foreign trade zone (FTZ) then your merchandise will be exempt from payment of duty.

• Pro-Business and Startup Environment – North Carolina boasts of a pro-business environment as well as a strong start-up ecosystem. This pro-business environment is driven by several elements such as:
  • Low cost of living and high quality of life
  • Infrastructure and logistical support to facilitate import and export
  • Availability of skilled workers
  • Labor costs are lower than the national average
  • Availability of North Carolina small business funding
  • Accelerator and incubator programs for startups
• Advanced Technology Hubs – The state of North Carolina is quickly becoming one of the leading advanced information technology hubs in the nation. Charlotte and Raleigh–Durham have also become the top tech talent markets in the country. There are several salient aspects to these tech hubs like the availability of North Carolina small business grants, co-working spaces, state-of-the-art amenities for startups, shared equipment, and overall low startup costs.

Small Business Incentive Programs and Grants in North Carolina

Every business in its early stages has certain initial expenses. For this reason, a strong financial strategy is always recommended. Business expenses can be dynamic in nature, and can even exceed the predefined budget. In such a scenario, the North Carolina small business funding programs can be quite helpful. The most common is the traditional financing option, which consists of loans which may increase the overall debt of the company. It is hence important to identify alternative financing sources like North Carolina small business grants and incentive programs.

Small Business Grants in NC

North Carolina small business grants are programs that offer small amounts of funding also known as seed money to startups. A grant is awarded to private businesses and government entities, and unlike a loan, you are not required to repay a grant. The objective of a grant is to help entrepreneurs with doing business in North Carolina and is normally offered by nonprofits, government agencies, and other businesses as well. If you’re looking for grants then it is essential to conduct an in-depth search and apply for one that fits your business requirements. Let us take a look at some of the top business grant programs in the state of North Carolina.

Job Development Investment Grant (JDIG)

The Job Development Investment Grant (JDIG) is one of the top performance-based North Carolina small business grants. The program provides cash grants directly to entities that create jobs and invest in the state. The JDIG grant plays a key role in significantly offsetting the cost of expanding or locating a facility within North Carolina. Several factors considered when awarding the grant and they include:

• The location of your project
• County tier designation
• Number of net new jobs created in the state
• Wages of jobs created compared to the average wage of the said county
• Level of investment made by your company in the state
• The industry sector

One North Carolina Fund (OneNC)

The One North Carolina Fund (OneNC) is a popular North Carolina small business funding program. It is a type of discretionary cash-grant program with the help of which the Governor can quickly respond to any competitive projects that enable job creation in the state. The OneNC grant program utilizes North Carolina’s economic development tier system in its operations. This grant program is administered by the Department of Commerce. The factors considered when awarding the grant are:

• The total number of jobs created in the state
• The level of investment made by a company
• The location of their project
• The economic impact of their project
• The importance of their project to North Carolina and the region

One NC Small Business Program

The One NC small business program is comprised of two separate programs, which are:

• The SBIR/STTR Phase I Incentive Funds Program – This is a North Carolina small business incentives funds program that aims to provide reimbursement to qualified businesses in the state for the costs incurred during the preparation and submission of the Phase I of SBIR or STTR proposals to federal agencies.
• The SBIR/STTR Phase I Matching Funds Program – This is a North Carolina small business funding program that provides matching funds to those businesses in the state who have received a federal STTR or SBIR award.

Workforce Grants

A major requirement of every new business is a skilled workforce and North Carolina has an abundance of skilled individuals. The more skilled a workforce is, the more they will enable the economy to grow. Hence, workforce development is an important area of focus and North Carolina supports it through a variety of grant programs. The North Carolina small business grants programs provide salient benefits to employers, workers, and communities. The grants focus on several key areas like customized training, on-the-job training, workforce assistance, and Work Opportunity Tax Credit (WOTC). Your company can receive anywhere from $1,200 to $9,600 for each eligible employee as a part of WOTC.

Downtown Development Funds

In the state of North Carolina, downtowns are considered to be the economic and cultural centers of the various communities. The Main Street Solutions Fund is one of several important downtown development funds. The primary objective of this North Carolina small business funding program is to provide maximum financial support to small businesses in designated micropolitan areas situated within Tier 2 and Tier 3 counties, or within specific main street communities.

Form Your Startup in North Carolina Today!

Tax Exemption in NC

Different tax exemption programs are the main contributors to the ease of doing business in North Carolina. These tax exemption programs play a key role in offsetting the tax levied on entities in the state. Let’s look at some of the top programs in NC.

Manufacturing tax exemptions

North Carolina has one of the lowest tax burdens for business entities and to top it, they also offer several tax exemption programs. The most commonly applied exemption programs are those that are offered to the manufacturing industry. There are several North Carolina small business incentives programs for manufacturers such as:

• Sales and Use Tax Exemption on machinery and equipment
• Sales and Use Tax Exemption on raw materials
• Property Tax Exclusion on inventories
• Sales and Use Tax Exemption on electricity, fuel, and piped natural gas

Data center sales and use tax exemptions

Data centers are integral to the growth of the technology industry and IT companies. A single data center consists of a large group of computer servers networked together for the processing, storage, and distribution of a large amount of data. Business entities planning to open data centers can benefit from the sales and use tax exemptions targeted to this sector. The North Carolina small business incentives program for data centers provides sales and use tax exemptions on certain items like:

• Computer software sold to a data center
• The purchase of support equipment for a data center
• The purchase of electricity to be used at a qualifying internet data center

Large fulfillment facilities

There are several different types of sales and use tax exemption programs that your company can take advantage of. One such program caters to large fulfillment facilities. If you’re planning on doing business in North Carolina and want to open a large fulfillment facility in the state, then you can apply for this exemption. The exemption is applicable for the sales of equipment, attachments, accessories, or even repair parts purchased by the facility. The sales and use tax exemption is also valid for equipment and accessories used at the said facility for the distribution process.

R&D and Software publishing sales tax exemptions

The R&D and software publishing sales tax exemption is one of the most popular North Carolina small business incentives programs. The R&D sales tax exemption is applicable primarily for Research and Development activities conducted by companies focused on engineering, physical, and life sciences, or any company within the industry group with NAICS code 54171. The software publishing sales tax exemption is applicable for the sales of equipment or any repair part of an equipment for a company engaged primarily in software publishing activity.

Pollution abatement equipment and recycling

When it comes to pollution abatement equipment and recycling in North Carolina, there are two types of tax exemptions applicable. They are:

• Sales and use tax exemption – pollution abatement equipment used for manufacturing is exempted from sales and use tax in the state. Your company can be eligible for this North Carolina small business incentives program if you are using equipment, parts, and accessories used for eliminating, preventing, or reducing air and water pollutants that are emitted due to your manufacturing processes.
• Property tax exemption – You can utilize this exemption if your real and personal property is being used exclusively for waste disposal, air cleaning, or to reduce air and water pollution.

Historic preservation tax credit

You can apply for this tax credit program if you are doing business in North Carolina that focuses on the rehabilitation of an owner-occupied historic residence, as well as any income-earning historic properties. This program is meant only for certified historic structures. There is a 15% state tax credit for the rehabilitation of income-generating certified NC historic structures.

Foreign trade zone (FTZ)

North Carolina has four foreign trade zones (FTZ), also known as free trade zones. The FTZ is a geographically designated secured area, considered to be outside of the U.S. Customs territory for legal purposes. This is basically a duty-free zone for companies. The FTZ program allows a North Carolina-based company to reduce, defer, or eliminate customs duty on products being admitted into this zone. The FTZ programs are one of the important North Carolina small business incentives programs for import and export businesses.

Export Support

Exports play a key role in North Carolina’s economy. Therefore, the state has introduced several support programs for businesses. One of the salient highlights is the State Trade Expansion Program (STEP), which is a North Carolina small business grants program. This program is an important component of the National Export Initiative (NEI), and the grant amount is based on parameters like total value of exports, and number of global markets being exported to.

Ready to Start a Business in North Carolina!

Each new and existing business requires financial assistance for both the initial setup and operational stages. You may require North Carolina small business funding options to handle various requirements for your company. If you are in the planning stage of starting a new business in this state, then you will need to register your company in order to apply for the North Carolina small business grants.

North Carolina Business Tax

There are several types of taxes that businesses are required to file in America. Federal taxes are applicable across all 50 states, followed by state business taxes, which vary from one state to another. Whether you start a domestic entity or a foreign company, taxes are considered to be mandatory annual requirements. Similarly, the North Carolina business taxes are applicable to entities formed and operating within the state. The tax rates in NC will be different from that of other states and you may need a North Carolina business tax calculator to enable tax planning, accounting, and bookkeeping.

What taxes do businesses pay in North Carolina?

North Carolina has been attracting entrepreneurs and investors due to its pro-business environment. The North Carolina business tax climate is also considered to be favorable and has one of the lowest corporate income taxes in the nation. The state has a lower corporate income tax compared to Colorado (4.6%), South Carolina (5%), Florida (5.5%), and New York (7.3%), among others. You can form different types of domestic and foreign entities in North Carolina including a limited liability Company, a sole proprietorship, a C-Corporation, a partnership, and an S-Corporation. Each entity type will have a different tax status in this state. Your company may be required to file a single type of state taxes or multiple business taxes and you may need a North Carolina business tax calculator to determine the amount of taxes due. Let’s try to understand the different types of taxes applicable to new and existing businesses in this state.

North Carolina income tax

There are different categories for North Carolina business taxes and one of them is income tax. There are two types of income taxes that may be applicable to businesses which include:

• Individual income tax – This type of tax has to be filed by individual taxpayers. Some entity structures require an individual income tax return to be filed like a sole proprietorship or a limited liability company. You can use the individual income tax estimator provided by the North Carolina Department of Revenue to calculate your annual tax return.
• Corporate income tax – The corporate income tax is levied on the net taxable income of all North Carolina corporations – both domestic and foreign. The tax rate is flat 2.50 percent for all entities. You can use a North Carolina business tax Calculator to determine your corporation’s payable taxes. It is important to note that certain corporations that have been organized under Chapter 55A will be exempt from corporate income taxes.

Employer taxes

One of the North Carolina business tax classifications is employer taxes. This tax can be applied to businesses that have employed a skilled, semi-skilled, or unskilled workforce. The tax rate for all employers is determined using an experience rating formula. This formula is based on economic conditions and hence the tax rate can vary from 0.060% to 5.760%. The base rate for employer taxes in a given year is determined by the solvency of the Unemployment Insurance Trust Fund. The employer taxes can be applicable as North Carolina LLC taxes as well as any other entity based in the state.

Franchise or Privilege tax

The franchise tax is also known as a privilege tax. This tax is placed on various entities for the privilege of conducting business in North Carolina. The North Carolina franchise tax typically applies to C-Corporations and S-Corporations. The tax rate varies depending on the entity type. For example, the rate for a C-Corporation is $1.50 (one dollar and fifty cents) per $1,000 (one thousand dollars). The minimum franchise tax can also vary according to tax year, and will also be different for Holding Companies. You will need to use a North Carolina business tax Calculator to derive the amount of taxes payable.

North Carolina sales and use tax

One of the important taxes apart from the North Carolina franchise tax is the sales and use tax. 2020 North Carolina General Statutes, Chapter 105 – Taxation, Article 5 governs this tax in the state. This form of North Carolina Corporation taxes is applicable for any entity that sells tangible personal property, pursuant to NC Gen Stat § 105-164.4 (2020). This type of property is defined as any personal property that can be weighed, seen, felt, measured, or can be perceptible to the senses.

Excise tax

Excise tax, unlike North Carolina franchise tax, is applicable only for selling or using specific products, services, or property. This type of North Carolina LLC tax includes several types of taxes like the Alcoholic Beverages Tax, Piped Natural Gas Tax, and Tobacco Products Tax among others. Let’s look at an example to understand this.

Example: If you are planning to sell alcoholic beverages in North Carolina then excise tax will be applicable. This type of North Carolina business tax is levied on all alcoholic beverages including wine, which is sold in the state as well as those shipped into this state. The excise tax rate will vary according to the nature of business like the tax rate on liquor will be different from that of a brewery or winery.

Are you thinking of forming a new business in North Carolina?

How North Carolina Businesses are Taxed

Once you form a new business in North Carolina, you will need to maintain compliance with all annual state requirements. Flint taxes one of the major annual requirements. The type of North Carolina business tax that your company is required to file will depend on the company’s type of entity structure. Your business may be required to file more than one form of state or local business taxes. Let us look at the different types of entities and their tax obligations in this state.

Taxes for an LLC

If you are planning to register a limited liability company in North Carolina then for tax purposes, it will be considered a pass-through entity. This simply means that instead of filing North Carolina business tax or corporate tax, you will be required to file a personal income tax at a rate of 4.75 percent. This is because, for a pass-through entity, the business income passes through to the owners and other members. There are several other North Carolina LLC taxes that you may be required to file depending on the business activity and other aspects of the business.

Taxes for a C Corporation

If you plan to incorporate in North Carolina then you will be required to file corporate taxes and the North Carolina franchise tax. The good news is that the current tax rate for corporate taxes is one of the lowest in the nation at 2.5 percent. The franchise tax has a variable rate with a minimum franchise tax of $200 for those C Corporations whose tax years started on or after January 1, 2017. The current tax rate is $1.50 per $1,000.

• Withholding Tax – If your company has employees then you must file this tax return.
• Employment Security tax – This is also known as payroll tax and the tax rate would be 1.20 percent in the first 2 years. This tax has to be paid quarterly.
• Privilege tax on machinery – If you are in the manufacturing industry or any industry that requires the use of specific machinery then this tax would be applicable. This tax rate is 1% of the sales price.
• Sales and Use tax – These important North Carolina Corporation taxes are applicable if you fulfill certain criteria such as selling tangible personal property through retail, facilitating accommodation rental, and selling taxable service contracts among others.

Taxes for S Corporation

If you’ve started an LLC or a C-Corporation and have chosen to elect S-Corporation tax status, then as a benefit, you will not be subjected to corporate income taxes. An S-Corporation is a pass-through entity like an LLC. Therefore, instead of filing North Carolina Corporation taxes, each member or owner would be required to file personal income taxes.

Taxes for a Sole Proprietorship

If you form a sole proprietorship in North Carolina then you will need to report your profits by filing individual income tax returns. You can file this electronically (eServices) or by mail. You will be required to file the return if the Federal gross income exceeds $12,750. Apart from this, depending on the type of activity, you may be required to file North Carolina business tax in the form of withholding tax, sales and use tax, and property tax among others.

Taxes for Partnerships

If you form a partnership company in North Carolina then the applicable taxes would be similar to that of taxes for sole proprietorships or North Carolina LLC taxes. Partners will be required to file individual tax returns based on the income they have earned through the business. If you are selling specific products or services then you will be required to file sales and use tax. You may also be required to file property tax, withholding tax, and occupational license tax among others.

Ready to Incorporate your North Carolina Company?

North Carolina provides just the right business environment for entrepreneurs and first-time business owners. You can choose to form different types of entities right from partnership firm to a limited liability company, sole proprietorship, C-Corporation, and S-Corporation. Whatever the entity type, you will need to ensure that the company is compliant with all annual requirements including the North Carolina business tax. IncParadise can provide meaningful assistance where taxes and annual requirements are concerned.

North Carolina Foreign Qualification

The state of North Carolina has a stable economy with manufacturing, trade, transportation, food services, and IT witnessing a growth of more than 3 percent annually. The state also has a strong transportation infrastructure that connects it to the rest of the United States, as well as globally. This along with a pro-business climate, the availability of loans and grants, access to business incentive programs, and a skilled workforce are the state’s economic highlights. The state is also the 14th largest exporter in the nation. These factors play a key role in attracting investors as well as entrepreneurs to move their business through a foreign qualification in North Carolina.

What is a North Carolina foreign qualification?

If you are already operating an LLC or corporation in any state in the USA and want to expand your operations to North Carolina, then one of the best options is a foreign qualification. This process is also known as North Carolina foreign business registration and will ensure you can operate the same company in both states without having to register a new business or domestic entity in North Carolina. When you apply for a foreign qualification in North Carolina, you will be able to operate your company in your home state (incorporation or registration state), as well as the new state (North Carolina).

Example: You have formed a domestic corporation in Indiana by filing Articles of Incorporation. Indiana will be considered as your home state or jurisdiction for the purpose of foreign qualification. You need to move your business or expand to North Carolina. One option will be to close your Indiana Corporation and start a new corporation in North Carolina. If you don’t want to close your existing business then you can apply for NC foreign corporation registration. This process will provide you with the authority to transact business in this state.

Doing business in North Carolina

When a limited liability company, Business Corporation, or any other form of entity is planning to operate in any state other than their home state, they are required to apply for foreign qualification. The word operation here is very important and it stands for “doing business” in North Carolina. Each state in the USA has a list of activities that are considered to be “doing business” in their state. You will need to apply for a NC foreign corporation registration or LLC registration if you engage in specific activities within the state. According to the office of the NC Secretary of State, the activities that do not constitute as doing business in North Carolina are:

• Maintaining, engaging, or defending any lawsuit, legal action, or administrative proceeding in the state
• Holding any meetings of the company officials, members, partners, directors, or shareholders
• Maintaining a business bank account or borrowing funds in North Carolina
• Maintaining an agency or office to facilitate exchanges, transfers, and the registration of its securities
• Appointing and maintaining trustees towards its securities
• Procuring or soliciting orders through employees, mail, or agents
• Acquiring or creating debt like investing in loans with or without any security

NC Foreign Qualification Process

If you already own a corporation or LLC in another state and want to expand your operations to North Carolina then you will require the proper authority to transact business in this state. The NC foreign corporation registration and registration for a foreign LLC are governed by the 2020 North Carolina General Statutes. The process for a North Carolina foreign business registration and operating a foreign LLC or corporation in the state encompasses three important requirements which include the company name, a registered agent, and the authority to transact business in the state.

North Carolina Foreign Corporation Registration

Every corporation that’s been formed in any other state but wants to operate in North Carolina will have to undergo the process for a foreign qualification. The process of a NC foreign corporation registration will help you to operate your company in the state without having to incorporate or form a new entity. The process for obtaining this authority is as follows:

• Business or Fictitious Name – The first step towards a NC foreign corporation registration is to register a business name. The name of a foreign corporation should include words and abbreviations like “corporation,” “incorporated,” “inc.,” or “corp.,” and must be exactly as it appears on file in the state of incorporation (home state). If the name is not available for use in North Carolina as it is similar to another name in the business database, then such an entity will be required to use a fictitious name pursuant to NC Gen Stat § 55D-22 (2020). Fictitious names are also known as assumed names and have to be registered with the County Register of Deeds. You will have to file the North Carolina Assumed Name Certificate along with a fee of $26. To register the fictitious name, you need to conduct a North Carolina foreign entity search also known as DBA name search.
• Registered Agent – Several state-based requirements need to be fulfilled for a NC foreign corporation registration. One of the most important requirements is hiring a registered agent in the state. According to the 2020 North Carolina General Statutes, NC Gen Stat § 55-15-07 (2020), a foreign corporation will not be authorized to transact business in this state if they don’t maintain a registered agent. We at IncParadise are one of the top North Carolina registered agents and have helped several domestic and foreign entities to incorporate in this state.
• Certificate of Authority – The most important step towards a North Carolina foreign business registration is to file the Application for the Certificate of Authority (Form B-09) pursuant to NC Gen Stat § 55-15-03 (2020). This application has to be filed with the Office of the Secretary of State along with a filing fee of $250. The process of NC foreign corporation registration will also require you to submit a Certificate of Existence (or document of similar import) that has been authenticated by the Secretary of State from the state of incorporation. The Certificate of Existence, also known as a certificate of good standing, must be the original document when submitted, and should not be more than six months old.

Do you want to register a foreign Corporation in North Carolina?

North Carolina Foreign LLC registration

If you’ve already formed an LLC in another state and want to expand your business to North Carolina, then you will need to apply for a NC LLC foreign registration. This is also known as the foreign qualification process and will help you to conduct business in the state. When you undergo the process for a foreign qualification, you will not have to go through the domestic entity formation or new business registration for a limited-liability company. The North Carolina foreign business registration for an LLC is governed by the 2020 North Carolina General Statutes, Chapter 57D – North Carolina Limited Liability Company Act, Article 7 – Foreign LLCs. The process to register a NC foreign LLC is as follows:

• Business Name – One of the foremost requirements for NC LLC foreign registration is a business name. There are two methods for a business name registration in the state. One is to register the existing name of the LLC including words and abbreviations like “limited liability company”, “L.L.C.” or “LLC”. This method is applicable only if the existing name is available in North Carolina when you conduct a North Carolina foreign entity search. If the name is unavailable, then the second option is to choose an assumed or fictitious name. You will need to conduct a fictitious name search as well, and if the name is available then you can register the name with the County Register of Deeds. You will have to file the North Carolina Assumed Name Certificate along with a fee of $26.
• Registered Agent – One of the important aspects of any North Carolina foreign business registration or new business formation is the service of process. This is executed by a registered agent in the said state. According to NC Gen Stat § 57D-7-06 (2020), a foreign limited liability company has to continuously maintain a registered agent in the state. A reliable registered agent service like IncParadise, will not only fulfill the service of process requirements in North Carolina but will also assist with the NC LLC foreign registration and other business compliances like filing annual reports.
• Certificate of Authority – The final step in the NC LLC foreign registration process is to file the paperwork for authority to transact business in this state. You will be required to file the application for a certificate of authority for a limited liability company (Form L-09) pursuant to NC Gen Stat § 57D-7-03 (2020). It has to be submitted to the Department of the Secretary of State, Business Registration Division along with a fee of $250. As a part of the North Carolina foreign business registration process, you will be required to submit a Certificate of Existence also known as a Certificate of Good Standing acquired from the state of formation or home jurisdiction. The certificate has to be submitted in original and should be less than six months old.

Want to form a foreign LLC in North Carolina?

Need Any Assistance in Applying for North Carolina Foreign Qualification?

North Carolina is one of the top states when it comes to business climate, diverse industries, and a skilled workforce. The state offers several opportunities and incentives for startups and domestic and foreign entities. You can expand your business to this state using the process of foreign qualification in North Carolina. As one of the leading registered agents in NC, IncParadise can assist you with the process of a foreign qualification.