North Carolina is becoming one of the most popular states to live and work in. If you want to start your own company, registering a business in the state is relatively straightforward due to the state’s efficient and consistent support for new businesses and the business community as a whole.
There are many different support systems in place in North Carolina to help entrepreneurs and those with existing businesses grow and flourish in their community, throughout the state, nationally, and even internationally.
North Carolina’s support for small businesses is evident in its approach to encouraging new businesses to register in the state. With relatively low business licensing fees, minimal business taxes, low income tax rates, and affordable registration fees, it is no wonder why so many people register a business in North Carolina and start their entrepreneurial journey.
The state is business-friendly, to say the least, meaning that for a small capital outlay you can get your new business started and registered in North Carolina conveniently, and cost-efficiently. Not only is North Carolina business-friendly, but it also boasts some great weather, breathtaking landscapes, a low cost of living, and some of the most welcoming locals in the U.S.!
How to Register a Business Name in North Carolina – 7 Easy Steps
The North Carolina Secretary of State makes it relatively easy to register your business name. There are three ways you can do this:
- 1. Do it yourself directly on their website.
- 2. Pay a document filing company that can register everything online for you – there is a modest fee for this.
- 3. Hire an attorney or accountant to file and register your new company – there are higher fees associated with this.
Step 1 – Determine your registered name
Firstly, you must determine that your business name is unique and not being used by someone else. A business registration company can do this research on your behalf or alternatively, you can search directly on North Carolina’s Secretary of State website.
Once you have established your name is available you can register a business name in North Carolina directly on their website or use an online registration service to do this for you. Before doing this, you must decide on the right structure.
Step 2 – Choose the right entity
You need to choose the right type of business to register and the most common options are a limited liability company (LLC) or an incorporated company (Inc.). If you are keeping things really small and simple (one or two people), then you may consider a sole proprietorship or a general partnership.
Even if you plan to be a solopreneur, it still might be more beneficial for you to register an LLC to make sure, as the owner, you have limited liability under this structure, and so you can benefit from the pass-through tax advantages.
Here is a quick rundown of the various options and what they might mean to you:
- Limited Liability Company: This is often the best route for most entrepreneurs because the structure comes with personal asset protection, no double taxation, is fairly easy to maintain, and does not have high registration or annual renewal costs.
- Incorporated Company: Corporations offer personal asset protection and your company can own property, vehicles, incur liabilities, and is responsible for its own debts and can conduct business without the owners risking their personal assets such as their homes, cars, personal savings, retirement, etc. On the flip side, owners of sole proprietorships or partnerships face unlimited liability for both business and personal assets.
Step 3 – Make sure your name is not being used by another company
This may seem obvious, but if you check the North Carolina Secretary of State website and see that your chosen business name is available, that is all well and good, but that doesn’t mean someone else is not using that same or similar name, particularly in another state.
Many people register an “official name” and trade under a different name. This is called a dba, or “doing business as” name or assumed trading name, and needs a separate DBA certificate.
You will want to do a Google search for your official name and your desired trading name (if different) to make sure no one else is using this name. Most importantly, you will want to make sure you can get an easy-to-remember website domain name that is not being used by someone else.
Having an awesome name or trading name for your business can be crucial to your success, so making sure the domain name is available too is equally as important.
Finally, if you go to the North Carolina Secretary of State website and discover that someone else has registered the name you would like, you can search for variations of that name by adding a word before it or after it, or using some other variations until you find a name that is available and acceptable for you.
Step 4 – Request an Employer Identification Number (EIN)
Once you have registered your new business in North Carolina you will need to get an EIN for a number of reasons. These include paying taxes for your business, opening a bank account, obtaining credit cards or lines of credit, establishing terms with vendors and suppliers, hiring employees, and more.
There are only a few instances where you likely won’t need an EIN. More often than not, many business activities are just not possible without having an EIN.
An EIN is the business equivalent of a social security number and is used to track your business dealings. Even if you do not intend to hire employees, you will almost certainly still need an EIN for your North Carolina company.
For more information on how to get an EIN number in North Carolina use our guide where you will find downloadable forms and links to the online process.
An EIN is free to obtain from the IRS and you can apply online but if you are not comfortable filling in forms you can use a third-party document filing service to do this for you for a small fee. This ensures you are 100% compliant with the law and they handle everything with the IRS.
Step 5 – Obtain the Required Business Licenses and Permits
To operate your business in North Carolina you must comply with federal, state, and local government regulations. North Carolina does not require businesses to have a “general” license to operate.
You will, however, need specific permits for specific businesses. For example, if you open a restaurant or similar food-related business you will most likely need a health permit, sales tax permit, facilities permit, and others. If you plan to sell alcohol, you will need a liquor license, essentially it all depends on the type of products and services your business is going to offer.
You must find out how to obtain the necessary North Carolina business licenses and permits for your business and fill out the appropriate forms. Alternatively, you could hire a professional document filing company to do this for you. It eliminates a lot of time and hassle and ensures you are correctly complying with the law. After all, North Carolina has no single generic business license that will ensure compliance with all requirements.
Step 6 – Determine Your Business Employer Requirements
There are several things you need to check regarding your responsibilities as an employer in North Carolina because there are requirements you must meet at the federal and state level. These could include various workforce commissions, safety, and tax obligations, as well as labor law requirements including the minimum wage in North Carolina and employee rights and remedies under the North Carolina minimum wage act.
To learn more about North Carolina employer resources take a look at the North Carolina Department of Labor website.
Step 7 – Open a Business Bank Account for your North Carolina Company
As a new business owner, you should seriously consider separating your personal and business bank accounts to make it easier to track and account for your income and expenses. For certain business types, such as an LLC or a Corporation, it is essential that you open a separate business bank account to maintain your liability protection.
Once you have your EIN and your company registration documents, coupled with your driver’s license, you are ready to go to the bank and open your business checking account.
Don’t worry, this won’t be expensive or leave you burdened with hefty monthly fees to pay – there are many free business bank accounts out there for you to choose from. Each has its different features and benefits, so you can decide what bank and checking account best suits your needs.
Summarizing Registering a Business in North Carolina
North Carolina offers one of the top business ecosystems in the nation. The barriers to entry for those looking to start a business in North Carolina are comparatively low and the resources at your disposal are high – creating a win-win for entrepreneurs.
Small Businesses thrive in North Carolina because of its relatively low tax burden, reasonable cost of living, a predictable regulatory environment that won’t slow down your progress and expansion, a highly-skilled workforce, and overall, a business-friendly climate!
The Tar Heel State is committed to your success and has many resources at your disposal that you can take advantage of.
Resources for Small Businesses in North Carolina
Whether you decided to register as an LLC, Corporation, or simply as a Sole Proprietor in North Carolina you are going to need to tap into the resources available to you to drive your small business forward.
North Carolina has many small business and technology development centers that are dedicated to supporting the development and retention of small businesses. The support they provide to entrepreneurs covers everything from crafting business plans to navigating the state’s tax codes. Visit the North Carolina Small Business and Technology Development Center website to find out more.
Not only are there small business development centers tailored around working with small businesses and startups for growth and development, but SCORE volunteer business professionals and expert mentors are readily available and are free to use for those looking to begin their entrepreneurial journey.
These services are very useful and cost-efficient, and it makes perfect sense to arm yourself with all the help and information you can get.
Here are some additional small business resources in North Carolina:
- SCORE North Carolina: Not only are there small business development centers tailored around working with small businesses and startups for growth and development, but SCORE volunteer business professionals and expert mentors are readily available and are free to use for those looking to begin their entrepreneurial journey.
- North Carolina SBA: The U.S. Small Business Administration (SBA) helps small business owners and entrepreneurs pursue the American dream. The SBA is dedicated to small businesses and provides counseling, capital, and contracting expertise as the nation’s only go-to resource and voice for small businesses.