Experienced Corporate Lawyers Help Businesses Form C Corporations in North Carolina
Skilled legal team counsels business owners throughout the state
A C corporation is a standard business entity recognized in almost every jurisdiction. Howard Stallings helps business owners incorporate as the specific entity that best suits their operations. A C corporation creates a fictitious body that can:
- Incur its own debts and liabilities, which are not normally imposed upon the shareholders
- Report profits and losses and pay taxes on its own income
Why form a C corporation?
Despite the increasing popularity of other entities (e.g., LLCs, LPs and S-Corps), a C corporation still provides specific advantages if you’re looking to start a business:
- The ability to transfer ownership freely — It is easier to sell part or all of an individual’s interest in a corporation than with an LLC.
- The ability to raise capital — C corporations can raise substantial capital by selling equity in the business. Shares in the corporation can be sold after it is formed to raise capital. If it is ever necessary to make a public offering, the corporate form would be necessary.
- Perpetual existence — Because a corporation does not need to qualify for partnership treatment with regard to federal taxation, a corporation has a perpetual existence.
Negative tax consequences for C corporations
Corporate shareholders pay taxes only if they receive a salary from the company or get a share of the profits (i.e., a dividend). It’s important to note that the corporation pays taxes on its profits first, and when those profits are paid out as dividends, the shareholders pay taxes on them again. Thus, corporate profits suffer double taxation. Some business owners avoid this double taxation by electing an S corporation status.
How do you form a corporation in North Carolina?
The basic corporate formation process in North Carolina is as follows:
Choose an appropriate name — Your chosen name must be distinguishable from other registered corporations. North Carolina law prohibits the use of specific words unless you are approved to engage in the business those words imply.
Draft and file articles of incorporation — These are your founding documents and must include:
- Company name
- Name of the incorporator (the person who signs the articles of incorporation)
- Registered agent of the company who receives official communications and service of process
- Registered address of the company
The incorporator executes the articles of incorporation and files with the North Carolina Secretary of State and pays the requisite fee (currently $125).
Draft bylaws — The bylaws set forth the rules by which the company operates, including the rights of the shareholders and how potential disputes are to be resolved.
Retain the services of highly competent corporate lawyers in Raleigh, New Bern and Morehead City
Howard Stallings provides high-quality legal counsel to individuals and businesses. We strive to help you meet the legal requirements to start a successful business. Call 919-821-7700 or contact us online to arrange a consultation with one of our experienced lawyers.