Corporations

A corporation is a creature of statute. That means there are certain things that must be done to be, and stay, a corporation. It is formed by filing Articles of Incorporation with the North Carolina Secretary of State. There are fees for filing, set by the statute, which are amended from time to time. Mailing your Articles of Incorporation does not make you a corporation at that time. Unless and until it is filed with the Secretary of State, the corporation has no authority to act. It is not officially formed until filed with the Secretary of State. Accordingly, you should not do any business as a corporation until your articles are filed with the Secretary of State. The Secretary of State can take as long as two to four weeks to file your corporation. You can pay an additional fee to expedite the filing, which is set forth by the Secretary of State.

The corporate name must also be sufficiently different from other corporate names as to properly identify the corporation. The availability of a corporate name can be checked on the North Carolina Secretary of State’s website. A corporate name must end with “company”, “corporation”, “incorporated”, “limited”, “co.”, “corp.”, “inc.”, or “ltd.” All corporations in North Carolina must have a registered office and a registered agent. The registered office must be located within this state and the registered agent must be a resident of this state. At least one person must sign the articles as the incorporator. The incorporator can be, but does not need to be, the same as the registered agent.

By-laws should be adopted by the corporation after incorporation. These by-laws govern how the corporation is to be operated.

Corporations can elect to file as a regular C-corporation or, if you meet the requirements, as a Subchapter S “Small Business” corporation. An election must be made within a certain period of time after the articles are filed to claim Subchapter S status. This must be filed with the Internal Revenue Service. Each election has different consequences as to how the corporation or shareholders are taxed

Once you are formed as a corporation, you must file an annual report with the Secretary of State and pay a fee for the annual report. Additionally, as a corporation you must keep annual minutes with your corporate books in order to maintain your corporate status. Corporations and limited liability companies, as well as limited partnerships, are effective ways to limit liability.