What’s Your Name?
When naming a corporation in North Carolina a few rules apply. They are as follows:
- The name must be recognizably different from any other entity on file with the Secretary of State. Name availability may be checked online with the Secretary of States Name Database.
- The chosen name of corporation must end with one of the following words or their abbreviations: Incorporated (Inc.), Corporation (Corp.), Company (Co), or Limited (Ltd.)
- A name may be reserved by filing an Application to Reserve a Business Entity Name with the Secretary of State. This form will reserve the name for 120 days.
What Paperwork is Involved?
Each corporation must file an Articles of Incorporation Form with the Secretary of State. This form allows the corporation to be legally recognized as such. It will state the corporate name and address, the name and address of each incorporator, the name and address of the agent for service of process (accepts legal paperwork on your corporations behalf if you are involved in a lawsuit), the number of shares the corporation is authorized to use, and the effective date of the articles.
The Secretary of State requires that each corporation file an annual report. The report is due at the same time as your corporate tax returns and may be filed wither online or through the mail.
What Tax Forms Need to be Submitted?
The IRS requires any corporation operating as an S-corp to elect that status on Form 2552: Election by a Small Business Corporation to be signed by all shareholders. The election form must be filed within 75 days of the corporations first tax year.
An Employer Identification Number (EIN) must also be obtained from the IRS by filling out form SS-4. This form is free and can be filed on their website.
For information on state and local taxes that may apply to your corporation, please refer to the North Carolina Department of Revenue.
What Other Steps Do I Need to Complete?
Once your S-corp is set up, remember to get a business license in the city you are operating. Most cities pull data from newly-registered businesses in the state so they can track down who in their city should have a license. While you can wait for your city to come knocking if you are on a tight budget (and many will simply give you a deadline to get a license), some municipalities may not be so friendly about it. To determine what kind of license you may need for your business in North Carolina, refer to Business Link North Carolina.