Starting a Business in Stokes County

Starting and managing a business takes motivation, desire and talent. It also takes research and planning. Like a chess game, success in small business starts with decisive and correct opening moves. And, although initial mistakes are not fatal, it takes skill, discipline and hard work to regain the advantage. To increase your chance for success, take the time up front to explore and evaluate your business and personal goals. Then use this information to build a comprehensive and well ­thought ­out business plan that will help you reach these goals. What should you know BEFORE you try to raise capital?

The process of developing a business plan will help you think through some important issues that you may not have considered yet. Your plan will become a valuable tool as you set out to raise money for your business. It should also provide milestones to gauge your success.

Review the online courses at: 
www.myownbusiness.org
www.business.gov

Disclaimer
Any reference obtained from this server to a specific commercial product, process, or service does not constitute or imply an endorsement by Stokes County of the product, process, or service, or its producer or provider. The views and opinions expressed in any referenced document do not necessarily state or reflect those of Stokes County.

Stokes County nor any of its employees, makes any warranty, express or implied, including warranties of merchantability and fitness for a particular purpose, or assumes any legal liability for the accuracy, completeness, or usefulness of any information from this server or the links to servers on the HotList.

Frequently Asked Questions:

How do I get a business license?
North Carolina has no such thing as "a business license" that covers every business activity. North Carolina has over 700 business license requirements for certain types of businesses. There are also businesses for which there are no state license requirements. Call the Business License Information Office (BLIO) to determine your state license requirements, 919-807-2166 or 800-228-8443 toll-free within NC, or visit www.nccommerce.com/servicenter/blio/.

Operating a business in Stokes County requires no licensure other than what may be required by the State of North Carolina.  There may be planning and zoning issues regarding the location of the business.  Information relative to planning and zoning for Stokes County may be directed to the Stokes County Planning Department, 336-593-2438 (www.co.stokes.nc.us/plan/), and Health Department issues to 336-593-2400 (www.co.stokes.nc.us/health/).

How do I get a tax number?
There are several types of tax numbers. If a business is planning to have sales, a Sales & Use Tax number (AS/RP1 form) is required. Businesses having employees are required to obtain a Federal Employer Identification number (SS-4 form) (1.800.829.4933 or www.irs.gov) along with a N. C. withholding tax number. The Business License Information Office can provide application forms to businesses for these numbers.

You will need an EIN if you answer "Yes" to any of the following questions.
Additionally, if you provide health insurance for your employees, you may need a National Standard Employer Identifer (NSEI) for your electronic health transactions. To determine if you need an NSEI, refer to the Department of Health and Human Services' NSEI frequently asked questions.

• Do you have employees?
• Do you operate your business as a corporation or a partnership?
• Do you file any of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms?
• Do you withhold taxes on income, other than wages, paid to a non- resident alien?
• Do you have a Keogh plan?
• Are you involved with any of the following types of organizations?
  • Trusts, except certain grantor-owned revocable trusts, IRAs, Exempt Organization Business Income Tax Returns
  • Estates
  • Real estate mortgage investment conduits
  • Non-profit organizations
  • Farmers' cooperatives
  • Plan administrators

APPLY by Toll-Free Telephone Service
Taxpayers can obtain an EIN immediately by calling the Business & Specialty Tax Line (800-829-4933). The hours of operation are 7:00 a.m. - 10:00 p.m. local time, Monday through Friday. An assistor takes the information, assigns the EIN, and provides the number to an authorized individual over the telephone.

APPLY by FAX
Taxpayers can FAX the completed Form SS-4 application to their state FAX number (see Where to File - Business Forms and Filing Addresses), after ensuring that the Form SS-4 contains all of the required information. If it is determined that the entity needs a new EIN, one will be assigned using the appropriate procedures for the entity type. If the taxpayer's fax number is provided, a fax will be sent back with the EIN within four (4) business days.

APPLY by MAIL
The processing timeframe for an EIN application received by mail is four weeks. Ensure that the Form SS-4 contains all of the required information. If it is determined that the entity needs a new EIN, one will be assigned using the appropriate procedures for the entity type and mailed to the taxpayer.

APPLY by EIN ONLINE
This Internet EIN (I-EIN) application is another avenue for customers to apply for and obtain an employer identification number. Once all the necessary fields are completed on the online form, preliminary validation is performed and the taxpayer will be alerted to information IRS needs that may not have been included. An EIN will be issued after the successful submission of the completed Form SS-4 online. Please note that not all business entity types may use this method.

I am opening a business and plan to have employees.  What license(s) do I need?
You must register for a N. C. Withholding Tax Identification Number and you may need other licenses depending on the nature of your business.  You can visit one of the Taxpayer Service Centers where you can get assistance with a new business start-up or call 1-877-252-3052 (toll free) to order a “New Business” packet with the voice mail system.  The “New Business” packet contains applications and information concerning the proper license(s) and application(s) you may need.

How do I register for a N. C. withholding tax identification number?

You must submit a completed business registration application, Form AS/RP1 to obtain a withholding tax identification number and mail it to: N. C. Department of Revenue, Post Office Box 25000, Raleigh, N. C. 27640.  After your application is processed, you will be mailed information concerning your N. C. withholding tax account number and pre-printed forms on which to report and submit your payment of the tax withheld.

There is no fee charged for the withholding identification number. Withholding tax numbers cannot be obtained over the telephone.

How do I register my business name?
The type of business structure determines where a business name (assumed name) should be registered. A Certificate of Assumed Name for sole proprietorships and partnerships must be filed with the Register of Deeds in the county or counties in which businesses plan to operate (Stokes County Register of Deeds, www.co.stokes.nc.us/deeds/, 336.593.2811).

Corporations must register their business names with the Secretary of State’s Corporations Division (www.secretary.state.nc.us/corporations, 919.807.2225)

What do I need to do to incorporate my business? Do I need an attorney?
You can incorporate your own business by filing a one-page form called the Articles of Incorporation with the Corporations Division (www.secretary.state.nc.us/corporations/) in the Department of the Secretary of State, along with a $125.00 filing fee.  However, there are additional steps involved in completing the corporation.  The booklet, "A Guide to Incorporating Your Business" is available at the Corporations Division website to assist you with the paperwork. You are not required to use an attorney, though you may find it helpful to have the services of an attorney since there are a number of legal issues involved in establishing new businesses and new corporations. The only time you would be required to use an attorney would be if you wanted to hire someone to incorporate your business for you.  When someone else incorporates your business for you, he or she is considered to be practicing law and it is against the law for anyone other than a licensed attorney to practice law in North Carolina.

What type of business organization is right for me?
When organizing a new business, one of the most important decisions to be made is choosing the structure of a business. Factors influencing your decision about your business organization include:

• Legal restrictions
• Liabilities assumed
• Type of business operation
• Earnings distribution
• Capital needs
• Number of employees
• Tax advantages or disadvantages
• Length of business operation

The advantages and disadvantages of sole proprietorship, partnership and corporation are listed below.

Sole Proprietorship
This is the easiest and least costly way of starting a business.  A sole proprietorship can be formed by finding a location and opening the door for business. There are likely to be fees to obtain business name registration, an assumed name certificate and other necessary licenses. Attorney's fees for starting the business will be less than the other business forms because less preparation of documents is required and the owner has absolute authority over all business decisions.

Partnership
There are several types of partnerships. The two most common types are general and limited partnerships. A general partnership can be formed simply by an oral agreement between two or more persons, but a legal partnership agreement drawn up by an attorney is highly recommended. Legal fees for drawing up a partnership agreement are higher than those for a sole proprietorship, but may be lower than incorporating. A partnership agreement could be helpful in solving any disputes. However, partners are responsible for the other partner's business actions, as well as their own.
A Partnership Agreement should include the following:

• Type of business.
• Amount of equity invested by each partner.
• Division of profit or loss.
• Partners compensation.
• Distribution of assets on dissolution.
• Duration of partnership.
• Provisions for changes or dissolving the partnership.
• Dispute settlement clause.
• Restrictions of authority and expenditures.
• Settlement in case of death or incapacitation.

Corporation
A business may incorporate without an attorney, but legal advice is highly recommended. The corporate structure is usually the most complex and more costly to organize than the other two business formations. Control depends on stock ownership. Persons with the largest stock ownership, not the total number of shareholders, control the corporation. With control of stock shares or 51 percent of stock, a person or group is able to make policy decisions. Control is exercised through regular board of directors' meetings and annual stockholders' meetings. Records must be kept to document decisions made by the board of directors. Small, closely held corporations can operate more informally, but record-keeping cannot be eliminated entirely. Officers of a corporation can be liable to stockholders for improper actions. Liability is generally limited to stock ownership, except where fraud is involved. You may want to incorporate as a "C" or "S" corporation.

What is the difference between a "limited partnership", a "limited liability partnership", and a "limited liability company?"
A limited partnership is a partnership with two kinds of partners: general partners and limited partners. The general partners manage the business and are subject to unlimited liability; that is, the general partners are personally liable for the debts and obligations of the partnership. Generally, limited partners are not permitted to participate in the management of the business and enjoy "limited liability;" that is, they are not personally liable for the debts and obligations of the company. Filing a certificate of limited partnership with the Secretary of State creates limited partnerships.  A limited liability partnership, also called a registered limited liability partnership (RLLP) , is a kind of general partnership. RLLPs are frequently businesses that provide professional services, such as law firms. An RLLP does not have "limited partners," but a general partner is nevertheless NOT subject to personal liability for the malpractice of another partner unless he or she participates with or is responsible for supervising the partner committing the malpractice. A general partnership becomes a RLLP by filing an application for registration with the Secretary of State.  A limited liability company has some of the characteristics of partnerships and some of  the characteristics of corporations. It is not subject to "double taxation." The owners of an  LLC are called members. LLCs are managed by the members or by managers who are not  members. Members enjoy "limited liability." Filing articles of organization with the Secretary   of State creates LLCs.

What is the difference between an LLC and a business corporation?
A business corporation has officers or directors and pays an annual report fee of $20.00.  An LLC has members or managers and pays an annual report fee of $200.00. An LLC is an unincorporated association that offers a combination of limited liability and special tax treatment. A business corporation is an artificial entity and offers limited liability that protects the personal property of its shareholders.

How many people are required to organize a non-profit corporation?
One or more.

A Limited Partnership?
Two or more (1 limited partner and 1 general partner.)

A Limited Liability Company?
One or more.

A business corporation?
One or more.

How do I incorporate my business in North Carolina?
First, you must file the original and one copy of your company’s Articles of Incorporation with the Corporations Division. Make sure the following information is provided in your filing: 
The name of your corporation -- Your company’s name must also include at least one of the following words or abbreviations: Company, Corporation, Incorporated, Limited, Co., Corp, Inc. or Ltd.

• The number of shares of stock your corporation is authorized to issue -- You should consult with your attorney to determine how many shares of stock your company is authorized to issue. Remember that authorized capital is the number of shares your corporation can issue, not necessarily the amount you have already issued or plan to issue in the future.
• The classes of stock issued by your corporation -- You should consult with your attorney to determine whether you should separate your corporate stock into different classes. Most corporations issue only one class of stock.
• The street address and county of your registered office and the name of your registered agent-- Your registered office must be located in North Carolina. If the mailing address of your registered office differs from its geographic address, please provide both in your filing.
• The names and addresses of your company’s incorporators -- State law requires that your filing list at least one incorporator. You may list more than one. Make sure that you submit the signature of at least one of the incorporators listed in your filing. You do not have to have those signatures notarized.

Where do I file my company’s Articles of Incorporation?
You can mail your filing to the Corporations Division, P.O. Box 29622, Raleigh, N.C. 27626-0622. If you want to deliver your Articles of Incorporation in person and need directions to our office, please call us at (919) 807-2225.

How much will it cost to file my company’s Articles of Incorporation?
The fee for business incorporations is $125.

How will I know when Articles of Incorporation have been filed?
Once your Articles of Incorporation have been filed, you will receive a certified copy of them from the Department of the Secretary of State.

Do I have to hire an attorney to incorporate?
No, but you should consult an attorney if you have any legal questions concerning your incorporation, such as taxation, liability of the owners and other issues not directly related to the incorporation. Please keep in mind that, while we will do everything we can to make the  incorporation process as easy as we can for you, the Corporations Division can only act in an administrative capacity. We cannot offer you legal advice or opinion on your particular filing.  We recommend that you consult with your own attorney and accountant during the incorporation process.

Can the Secretary of State’s office answer questions regarding the legitimacy of a corporation?
No. The Secretary of State can only tell a client how long a company has been incorporated and if it is in good standing with the agency. For questions on legitimacy, the client should contact the Attorney General’s Office, Consumer Protection Office, www.jus.state.nc/Justice/cpsmain.

What do I do once my Articles of Incorporation have been filed with the Department of the Secretary of State?
There are several more steps you’ll need to take before you can actually begin operating as a corporation. You’ll need to:

• Hold an organizational meeting -- If they have not already been specifically named in your Articles of Incorporation, you should elect directors for your corporation. You should then elect officers for your corporation and set their compensation. Next, you should adopt a set of corporate by-laws and issue shares of stock. Then, adopt banking resolutions for your corporation and fix dates for the start and end of each corporate fiscal year.
• Approve any other agreements or contracts deemed desirable for your corporation
• Obtain your corporation’s tax identification numbers from the North Carolina Department of Revenue and the IRS
• Check with the Business License Information Office (BLIO) to see if your corporation needs a license to operate -- BLIO is a division of the Department of the Secretary of State. Its mission is to help new businesses like yours identify and complete any governmental permitting processes prior to starting up corporate operations. Call 807-2166 or toll free 1-800-228-8443 for BLIO assistance. BLIO’s web address is: www.sosnc.com/blio/
• Purchase a company seal -- You can order one from most stationary and office supply stores in your area
• Contact county and local agencies to see what regulations and restrictions may apply to your business -- Your attorney will usually be able to guide you through this process. You are not, however, required by law to hire one.
• Set up an accurate bookkeeping system -- Most corporations hire an accountant to oversee this part of the incorporation process and check the company’s books on a regular basis. An accountant can also help prepare your company’s tax filings.

What are a registered agent and a registered office?
A registered agent can be one of three things:

• An individual who lives in North Carolina and whose business office is identical with the registered office.
• A domestic corporation or non-profit domestic corporation whose business office is identical with the registered office.
• A foreign corporation or non-profit foreign corporation authorized to transact business in North Carolina and whose business office is identical with the registered office.
• The registered agent need not be the incorporator of the corporation. The only duty of the registered agent is to forward any notice, process or demand that is served on the registered agent, often by a deputy sheriff, to your corporation at its last known address. The registered office may -- but need not -- have the same address as any of the corporation’s places of business. Under North Carolina law, the registered agent and the registered office must be continuously maintained in North Carolina.

How do I change my registered agent and registered office?
Simply file a Statement of Change of Registered Office And/Or Registered Agent with the Corporations Division. When you file the statement, you should also file a copy of it and pay the $5 fee. You can also change registered agents and registered offices by indicating the change in your annual report.

When are my corporation’s annual reports due?
Beginning Jan. 1, 1998, annual reports for business corporations must be delivered with a $20.00 fee to the N.C. Department of Revenue, ( www.dor.state.nc.us/DOR/), each year by the due date for filing your corporation’s income and franchise tax returns. (Corporations are required to deliver their annual report to the Department of Revenue by the 15th day of the third month following the close of their fiscal year. Thus, for corporations with fiscal years ending December 31st , annual reports are due March 15th .)  You will still be required to file your company’s annual report on time. Failure to do so may result in dissolution of your corporation or revocation of your Certificate of Authority.

Is there any way I can reserve a certain name for my corporation before I file for incorporation?
Yes, there is. You can reserve a corporate name for 120 days by filing an Application to Reserve a Corporate Name with the Corporations Division of the Department of the Secretary of State. You must pay a $30 fee at the time you file to reserve your corporation’s name. The name you choose for your corporation must be clearly distinguishable from the names of all other corporations, limited liability companies and limited partnerships already on file with the Corporations Division. We encourage you to check the corporate name you have chosen by calling us at (919) 807-2225. Please understand that any clearance you receive from us by phone for a corporate name is preliminary. We cannot guarantee that the name you have chosen will still be available when you file your Articles of Incorporation unless you file an Application to Reserve a Corporate Name. Because of this, we strongly recommend that you not have stationary, business signs, cards or other material printed until you have received your final papers from the N.C. Department of the Secretary of State.

I want to start a new corporation as soon as possible. Do I need to file a form to reserve the corporate name I want?
No. A name may be reserved so as to save it for later use, but if you’re ready to form the corporation now, and the name is available for use, there is no need to reserve it.

I filed articles of incorporation with the Secretary of State, but it was sent back unfiled because the name was not available. What do I do now?
Select a new name that is available, change the articles, and send them back to the Secretary.

The company name I want to use is currently in use by a company that has been dissolved. How long must I wait to use the name?
In most cases, the name is available 120 days after the effective date of the dissolution. If the dissolution was an administrative dissolution or registration revocation of a limited liability partnership, then you must wait for the expiration of five years after the effective date of the administrative dissolution or revocation. See G.S. 55D-21(d) for more information.

I want my corporation to have a new name. How do I go about changing its name?
Changing the name of a company requires amending its articles of incorporation. If shares have not yet been issued, the directors or incorporators (incorporators may do this only if there are no

to the shareholders and the shareholders must approve the change. G.S. 55-10-01.

If my company is already incorporated in another state or nation, what do I have to do in order to conduct business in North Carolina?
You’ll need to file an Application for Certificate of Authority with the Corporations Division of the Department of the Secretary of State. You should include the following information in your application:

• The name of your corporation -- You should provide the name of your corporation exactly as it appears on file in the state or country where your company was originally incorporated. If that name is not available in North Carolina, you should also include the corporate name under which your company will conduct business in this state. If your corporation chooses to use a fictitious name, you will need to file a copy of the resolution adopting the name passed by your company’s board of directors. You will also have to have that resolution certified by the Secretary of your corporation.
• The name of the state or country in which your company was originally incorporated.
• The date of incorporation and the period of duration for your corporation.
• The street address of your principal office -- This must be an actual geographic location. We will not accept a Post Office Box number.
• The mailing address of your principal office if it is different from the street address.
• The street address and county of your registered office -- Your registered office must be located somewhere in the state of North Carolina. The address provided must be the actual physical location of your registered office.
• The mailing address of your registered office if it is different from the street address -- This must be a North Carolina address.
• The name of your company’s registered agent.
• The names, titles and business addresses of your company’s current corporate officers.
• A Certificate of Existence or similar document -- This document will have to be authenticated by the Department of the Secretary of State or by the official who has custody of the corporate records in the state or country in which your company was originally incorporated. In either event, the certification date must be no more than six months old. The Certificate of Existence must also be an original. We will not accept photocopies or fax copies.

How much will it cost me to file my Application for Certificate of Authority?
The filing fee for an Application for Certificate of Authority is $250.

Can I change my Articles of Incorporation after they’ve been filed?
Yes, you can. You should file Articles of Amendment in duplicate. The Articles of Amendment must be signed by the chair of your company’s board of directors or by any one of your company’s corporate officers. Only one signature is required and we do not require a corporate seal or notarization on Articles of Amendment. We do charge a $50 fee at the time you file Articles of Amendment.

Where do you file an assumed name certificate?
At the office of the register of deeds in any county where you do business. G. S. 66-68.

Do I need to file my company’s articles of incorporation with the local register of deeds?
No. The only time local recording is required is when a corporation owns real property and the company’s name is changed due to an amendment of the articles of incorporation or the company’s property is transferred by merger with another company. In that case, a certificate reciting such name change must be filed with the register of deeds of any county where the property lies. The Secretary furnishes certificates for this purpose. G. S. SS-4-05.

I’d like to get a "certificate of good standing" regarding a particular corporation. Does the Secretary issue such certificates?
The Secretary issues "Certificates of Existence" pursuant to G.S. 55-1-28, 55A-1-28, and 57C-1-28. The certificate gives information about the company’s name, about its incorporation, (or authorization to conduct business in North Carolina if it is a foreign entity), about whether the company’s articles or certificate of authority has been suspended, if its annual report is current, and if articles of dissolution have been filed. The Secretary will certify other facts of record as requested.  The Certificate of Existence may be relied upon as conclusive evidence that the company is in existence or is authorized to transact business in North Carolina.

I need a Certificate of Existence in a hurry. May I have it right away if I come to pick it up in person?
No. You may order it by mail, by phone, fax, email, or in person. However, a certificate of any kind cannot be picked up immediately after ordering. It presently takes approximately 3-4 days to process these requests.

The form I’m filling out says I must file the original and a "conformed copy." What is that?
A conformed copy is an exact copy including a photostat or other photographic copy of the original document. G.S. 59-102(2).

Where can I get a copy of the Corporation Laws of North Carolina?
For paper copies, contact Lexis Law Publishing Company, P.O. Box 7587, Charlottesville, Va. 22906. You may also phone Lexis Law Publishing at (804) 295-6171 or toll-free at (800) 562-1197. Most public libraries in North Carolina have copies of the N.C.  General Statutes available for public research. You may also access the North Carolina General  Statutes through the Secretary of State’s home page (www.sosonc.com) and clicking on  "NCGA" or "NORTH CAROLINA GENERAL STATUTES".

If writing a check for the fees due, to whom do I make the check payable?
Please make your check payable to N.C. Secretary of State.

What are the acceptable forms of payment?
Acceptable forms of payment include: Certified Checks, Money Orders, and Business or personal checks with address and telephone number made payable to the North Carolina Secretary of State.  Starter or Counter checks are not acceptable forms of payment.

How do I check to see if a name I want to use as my corporate name is available?
Name availability can be determined by contacting the Corporations Division at 919-807-2225. The Division can be reached by fax at 919-807-2039.  On-line searches can be completed on the Corporations Division page.

How do I apply for a Federal ID Number?
A federal employer identification number can be applied for by mail. The Business License Information Office can provide the SS-4 form for filing. For more information regarding how to file by fax or phone, call 1-800-829-1040.

Who can help me write a business plan?
North Carolina has 58 Small Business Centers located within Community Colleges across the State. These Centers provide a variety of services to small businesses, including assistance with the development of business plans. For more information, contact your local community college or the SBTDC (www.sbtdc.org/) in your area. In addition, the SBA is an excellent resource for assisting with business plans for new and existing businesses, and can be reached at 1-800-827-5722.