North Carolina offers a reasonably good business environment with a low State income tax of 3%, averge sales tax rates, a supportive government, and one of the better public school systems.
DIY North Carolina Startup Guide
A business registration is more than just creating an official name for your business. Your business registration serves to identify the type of business formation, that is, the form of legal entity that was created.
When you incorporate, form a partnership, or create a cooperative organization, you are establishing a separate legal body that will be taxed as an independent entity. Often, new business owners do incorporate, but it's not essential for all businesses to do so.
Many small businesses can operate for years without ever needing to establish an indedpendent tax identification. North Carolina uses the terms "Assumed Name" or "DBA" in reference to IRS "disregarded entity type" businesses. Registering an Assumed Name in North Carolina is handled by the local county or city. Costs and processing may vary.
Federal Employer Identification Number (EIN)
As a sole proprietor operating an Assumed Name business, there is no legal requirement for your business to obtain a Federal EIN. However, there is also nothing to prevent you from doing so. Many small business owners obtain an EIN so they can maintain a separate bank account for their business.
Whether required or voluntary, the EIN application process is the same. The IRS provides applicants with several application methods, including online, by phone, fax or mail. Online and phone applications are completed and approved immediately if no additional information is required. Fax and mailed EIN applications are processed on a first come-first serve basis and can take up to four weeks to process.
Business and Trade Licensing
If your business will be providing any of a broad range of professional or trades services, you may also need to register through the Economic Development Partnership of North Carolina.
County and Local Licensing
There are over 700 regulatory, state-issued and occupational licenses and permits. In addition, a local license may be required for your business. Contact authorities within your local community for more information.
Creating a Business Plan
Before you do anything else, be sure to to create a business plan. For a small business, keep the plan simple. Most new business owners only need a list of the startup costs and monthly expenses balanced against anticipated income.
For a small business, the point of a business plan is to be sure you have enough money to survive the startup period because, while it will typically take a while for your income to rise as high as it was before you started the business, your personal bills will remain the same.
The question your business plan is supposed to answer is, whether your business income will grow fast enough to cover your bills before you run out of money. Don't be realistic, be pessimistic. It's better to plan for a worst case scenario and do better than expected, than having the opposite happen.
Financial & Legal Guidance
North Carolina offers several types of business formation. Each type provides benefits and detriments. The idea is to align your needs to the type of legal business entity that is best. To accomplish that, it's important to seek professional assistance.
Your choice of business formation is a serious legal matter that demands professional guidance. It is always advisable to consult both a lawyer and a certified public accountant before making your decision.
In many cases, your lawyer will register your business entity for you. However, if you are starting your business using an Assumed Name registration you can easily obtain the necessary documents and assistance from your local community.