Frequently Asked Questions Corporations Division North Carolina
Q: What is a corporation?
A: A corporation is a legal entity created upon filing Articles of Incorporation with the Department of the Secretary of State. It has a legal status or existence that is separate both from the individual(s) who forms it and its owners.
Q: What are the advantages and disadvantages of making your business a corporation?
A: The Department cannot advise on matters such as this. Please contact an attorney or other adviser. However, one sure advantage of forming a corporation is that it can protect an individualís personal assets, and may also protect against others using your business name.
Q: What is the difference between a "limited partnership", a "limited liability partnership", and a "limited liability company?"
A: 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.
Q: What is the difference between an LLC and a business corporation?
A: 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.
Q: How many people are required to organize a non-profit corporation?
A: One or more.
Q: A Limited Partnership? A: Two or more (1 limited partner and 1 general partner.)
Q: A Limited Liability Company? A: One or more.
Q: A business corporation? A: One or more.
Q: How do I incorporate my business in North Carolina?
A: First, you must file the original and one copy of your companyís Articles of Incorporation with the Corporations Division. Make sure the following information is provided in your filing:
The name of your corporation -- Your companyís 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 companyís 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.
Q: Where do I file my companyís Articles of Incorporation?
A: 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.
Q: How much will it cost to file my companyís Articles of Incorporation?
A: The fee for business incorporations is $125.
Q: How will I know when Articles of Incorporation have been filed?
A: Once your Articles of Incorporation have been filed, you will receive a certified copy of them from the Department of the Secretary of State.
Q: Do I have to hire an attorney to incorporate?
A: 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.
Q: Can the Secretary of Stateís office answer questions regarding the legitimacy of a corporation? A: 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 Generalís Office, Consumer Protection Office, www.jus.state.nc/Justice/cpsmain.
Q: What do I do once my Articles of Incorporation have been filed with the Department of the Secretary of State?
A: There are several more steps youíll need to take before you can actually begin operating as a corporation. Youíll 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 corporationís tax identification numbers from the North Carolina Department of Revenue and the IRS Check with the Business ServiCenter, a division of the North Carolina Department of Commerce, to see if your corporation needs a state business license to operate. Its mission is to help new businesses like yours identify and complete any governmental permitting processes prior to starting up corporate operations. Call 919-715-2864 or toll free 1-800-228-8443 for business license information, employer reporting requirements and assistance in navigating through the start-up process. The Business ServiCenter's web address is: www.nccommerce.com/servicenter/blio/
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 companyís books on a regular basis. An accountant can also help prepare your companyís tax filings.
Q: What are a registered agent and a registered office?A: 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 corporationís places of business. Under North Carolina law, the registered agent and the registered office must be continuously maintained in North Carolina.
Q: How do I change my registered agent and registered office? A: 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.
Q: When are my corporationís annual reports due? A: 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 corporationís 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 companyís annual report on time. Failure to do so may result in dissolution of your corporation or revocation of your Certificate of Authority.
Q: In doing research on businesses through your website, I noticed ones that do not look like they filed all of the annual reports that they are required to file. What can be done about businesses that donít comply with the law?
A: We are aware that there are business entities that fail to file their annual reports, making them eligible for administrative dissolution. While we would like to perform all divisional duties equally promptly, due to limited resources it has been necessary to prioritize these duties. To that end, we utilize a priority system on our document processing duties as follows: (1) matters that the General Assembly has mandated we process within strict statutory turnaround times, (2) compliance with NCGS 147-77, the Daily Deposit Act, for the proper deliver of collected fees to the NC Treasury, (3) the creation of new business entities to facilitate economic development, (4) the expansion of existing business entities to keep businesses profitable, (5) supporting the NC Department of Revenueís delinquent tax collection activities, (6) maintaining the currency of the Registered Agent database for use in the NC court system, (7) identifying unregistered foreign businesses transacting business in NC and obtaining compliance through registration with our division, (8) processing voluntary dissolutions, and (9) those other activities remaining, such as involuntary administrative dissolutions.
This said, we encourage anyone finding a business entity that has failed to file its annual report(s) to report that to the Corporations Division by e-mailing the exact name of the entity as it appears on our database and/or their SOSID number to corpinfo@sosnc.com or calling us at 919-807-2225. Once we receive that information, we will look at the entity and, where needed, begin the administrative dissolution process which involves mailing a notice to the entity regarding their imminent administrative dissolution. If the entity does not resolve the deficits in their filings within sixty (60) days, then they will then be mailed a Certificate of Administrative Dissolution and become administratively dissolved.
Q: Is there any way I can reserve a certain name for my corporation before I file for incorporation?
A: 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 corporationís 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.
Q: 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?
A: No. A name may be reserved so as to save it for later use, but if youíre ready to form the corporation now, and the name is available for use, there is no need to reserve it.
Q: 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?
A: Select a new name that is available, change the articles, and send them back to the Secretary.
Q: 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?
A: 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.
Q: I want my corporation to have a new name. How do I go about changing its name?
A: 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 directors) can do this. If shares have been issued, the directors must recommend the amendment to the shareholders and the shareholders must approve the change. G.S. 55-10-01.
Q: 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?
A: Youíll 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 companyís 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 companyís registered agent.
The names, titles and business addresses of your companyís 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.
Q: How much will it cost me to file my Application for Certificate of Authority?
A: The filing fee for an Application for Certificate of Authority is $250.
Q: Can I change my Articles of Incorporation after theyíve been filed?
A: Yes, you can. You should file Articles of Amendment in duplicate. The Articles of Amendment must be signed by the chair of your companyís board of directors or by any one of your companyís 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.
Q: Where do you file an assumed name certificate?
A: At the office of the register of deeds in any county where you do business. G. S. 66-68.
Q: Do I need to file my companyís articles of incorporation with the local register of deeds?
A: No. The only time local recording is required is when a corporation owns real property and the companyís name is changed due to an amendment of the articles of incorporation or the companyís 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.
Q: Iíd like to get a "certificate of good standing" regarding a particular corporation. Does the Secretary issue such certificates?
A: 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 companyís name, about its incorporation, (or authorization to conduct business in North Carolina if it is a foreign entity), about whether the companyís 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.
Q: I need a Certificate of Existence in a hurry. May I have it right away if I come to pick it up in person?
A: 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.
Q: The form Iím filling out says I must file the original and a "conformed copy." What is that?
A: A conformed copy is an exact copy including a photostat or other photographic copy of the original document. G.S. 59-102(2).
Q: Where can I get a copy of the Corporation Laws of North Carolina?
A: 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 Stateís home page (www.sosnc.com) and clicking on "NCGA" or "NORTH CAROLINA GENERAL STATUTES".
Q: If writing a check for the fees due, to whom do I make the check payable?
A: Please make your check payable to N.C. Secretary of State.
Q: What are the acceptable forms of payment?
A: 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.
Q: If a business entity has been sued in civil court, or has been charged with or convicted of a criminal offense, does North Carolina law authorize the Department to administratively dissolve that business entity?
A: No. North Carolina law states specific grounds for administrative dissolution of business entities, found in G.S. 55-14-20 for corporations, G.S. 55A-14-20 for nonprofit corporations, and G.S. 57C-6-03 for limited liability companies. Neither involvement in a civil lawsuit nor criminal activities committed by the business entity are statutory grounds for administrative dissolution under North Carolina law. Consequently, the Department does not have authority to administratively dissolve a business entity for either of those reasons.
Q: If an incorporator, registered agent, officer, or director of a business entity has been charged with or convicted of a criminal offense, does North Carolina law authorize the Department to administratively dissolve the business entity for which that person has acted as an incorporator, registered agent, officer, or director?
A: No. North Carolina law states specific grounds for administrative dissolution of business entities, found in G.S. 55-14-20 for corporations, G.S. 55A-14-20 for nonprofit corporations, and G.S. 57C-6-03 for limited liability companies. Criminal conduct by an officer, director, incorporator, or registered agent is not a statutory ground for administrative dissolution under North Carolina law, and the Department does not have authority to administratively dissolve a business entity for that reason.
Q: Can the name of a corporation, nonprofit corporation, or limited liability company contain language implying that the entity is engaging in unlawful activities?
A: No. Every business entity created under Chapter 55, 55A, 55B, 57C or 59 has the purpose of engaging in any lawful activity unless a more limited purpose is set forth in its Articles. Under North Carolina law, the name of a business entity shall not contain language stating or implying that the entity is organized for a purpose other than that permitted by G.S. 55-3-01, G.S. 55A-3-01, or G.S. 57C-2-01.Under those statutes unlawful activity is not a permitted purpose; thus the name of a business entity shall not contain language stating or implying that the entity is organized for an unlawful purpose. G.S. 55D-20(c).
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