COMMERCIAL CONSTRUCTION IN NORTH CAROLINA: Late Payments to Subcontractors – is it legal?

On Commercial Construction Projects, North Carolina law provides Protect Your Small Business with Legal Counselthat a General Contractor cannot withhold payment to its Subcontractors just because the General Contractor has not been paid by the Owner of the project. Specifically,  N.C.G.S. §22C-2. Performance by Subcontractor states:

“Performance by a subcontractor in accordance with the provisions of its contract shall entitle it to payment from the party with whom it contracts. Payment by the owner to a contractor is not a condition precedent for payment to a subcontractor and payment by a contractor to a subcontractor is not a condition precedent for payment to any other subcontractor, and an agreement to the contrary is unenforceable.”

As the statute says, even if the written Contract provides such a “pay when paid” clause, the provision is unenforceable by the General Contractor as a matter of North Carolina public policy.

Moreover, any payment due to a Subcontractor from a General Contractor, or from a Subcontractor to its subcontractor, must be paid withing seven (7) days of receipt of the subcontractor’s invoice for work performed. N.C.G.S. § 22C-3.  Time of Payment to Subcontractors states:

“When a subcontractor has performed in accordance with the provisions of his contract, the contractor shall pay to his subcontractor and each subcontractor shall pay to his subcontractor, within seven days of receipt by the contractor or subcontractor of each periodic or final payment, the full amount received for such subcontractor’s work and materials based on work completed or service provided under the subcontract.”

Additionally, any late payments bear interest at the rate of 1% per month or 12% per year.  N.C.G.S.  § 22C-5.  Late Payments to Bear Interest states:

“Should any periodic or final payment to a subcontractor be delayed by more than seven days after receipt of periodic or final payment by the contractor or subcontractor, the contractor or subcontractor shall pay his subcontractor interest, beginning on the eighth day, at the rate of one percent (1%) per month or a fraction thereof on such unpaid balance as may be due.”

However, these rules do not require a General Contractor or Subcontractor to pay its subcontractors, as set forth above, if the subcontractor’s work is deficient in any way.  N.C.G.S.  § 22C-4.  Conditions of Payment states:.

“Nothing in this Chapter shall prevent the contractor, at the time of application and certification to the owner, from withholding such application and certification to the owner for payment to the subcontractor for: unsatisfactory job progress; defective construction not remedied; disputed work; third party claims filed or reasonable evidence that claim will be filed; failure of subcontractor to make timely payments for labor, equipment, and materials; damage to contractor or another subcontractor; reasonable evidence that subcontract cannot be completed for the unpaid balance of the subcontract sum; or a reasonable amount for retainage not to exceed the initial percentage retained by the owner.”

Finally, be aware that these provisions apply to Commercial Construction Projects only; not to Residential Construction Projects.  N.C.G.S. § 22C-6.  Applicability of this Chapter states:

“The provisions of this Chapter shall not be applicable to residential contractors …, or to improvements to real property intended for residential purposes …., or to improvements to real property intended for residential purposes which consist of 12 or fewer residential units.”

If you are a Subcontractor working on a Commercial Construction Project in North Carolina, and you have trouble getting payment for work you performed on the project, call Wesley S. Jones now for a free phone consultation.

Wesley Jones is a Construction and Business Lawyer in Wilmington, North Carolina serving all of Southeastern North Carolina including New Hanover County (including Wilmington, Kure Beach, Wrightsville Beach, Carolina Beach and the areas of Ogden, Masonboro, Myrtle Grove, Landfall, and Mayfair), all of Pender County (including Burgaw, Surf City, Hampstead and Topsail Beach) and all of Brunswick County (including Bald Head Island, Bolivia, Calabash, Leland, Shallotte, Southport, Saint James, Ocean Isle, and Oak Island).


Stock Certificate
Forming a Corporation to start or operate a business in North Carolina can be beneficial to the business owners in two important ways:  1) it can help prevent the business owner from paying too much in federal and state income taxes and 2) it can help protect the business owners from incurring Personal Liability for acts carried out by the business.

So what are the main steps in forming a North Carolina Corporation?

  • You must select a Business Name and make sure that name is available for use in North Carolina.
  • You must file proper and complete Articles of Incorporation with the North Carolina Secretary of State.
  • Before filing the Articles of Incorporation, you must determine the number of shares the corporation will be authorized to issue (Issued Shares), the class of shares to be issued, who will serve as the Registered Agent, what will be the Registered Agent Address, and who will serve as the Incorporator.
  • After the Articles of Incorporation have been filed, must must hold an Organizational Meeting.
  • At the Organizational Meeting, you must elect Directors, appoint Officers, adopt a set of Bylaws, adopt a Corporate Seal, and issue Stock Certificates to the business owners (called Shareholders).
  • Before operating the business, you will want to apply for a Federal Identification Number (EIN Number) and State Identification Number for banking and tax purposes.
  • If you qualify and wish to be treated as an S-Corporation for tax purposes, you must complete and file IRS Form 2553.
  • Other Considerations:  Should you file an Assumed Name Certificate?  Do you need a Privilege License to operate your business?  Do the business owners need a Shareholders Agreement?  When should you file your first Annual Report with the North Carolina Secretary of State’s office?  What Corporate Formalities should I follow to keep my corporation valid as a legal entity?

If you are planning to form a North Carolina Corporation, the foregoing topics are just a few that a business owner must successfully navigate through to begin operating a business.  If you need help or advice, call an experienced Business Attorney.  Call Wesley Scott Jones now at 910-256-5800 for a free telephone consultation.

Wesley Jones is a Business Lawyer serving in Wilmington, North Carolina serving all of Southeastern North Carolina including New Hanover County (e.g. Wilmington, Kure Beach, Wrightsville Beach, Carolina Beach and the areas of Ogden, Masonboro, Myrtle Grove, Landfall, and Mayfair), all of Pender County (e.g. Burgaw, Surf City, Hampstead and Topsail Beach) and all of Brunswick County (e.g. Bald Head Island, Bolivia, Calabash, Leland, Shallotte, Southport, Saint James, Ocean Isle, and Oak Island).

The following are just a few of the Business Services that Wesley Scott Jones provides to clients:  Forming new Corporations and Limited Liability Companies, drafting Articles of Incorporation, Articles of Organization, Shareholders Agreements, Organizational Minutes, Operating Agreements, Annual Meeting Minutes, Bylaws, Annual Reports, Assignments, Board of Director’s Meeting Minutes, Business Entity Startup and Formation, Representing clients who are Buying or Selling a Business, Business Dissolution and Liquidation, Contract Review and Drafting (including Non-Compete or Noncompetition Agreements, Confidentiality Agreements, and Nondisclosure Agreements), Due Diligence Research, Leases, Licensing, Non-Profit Corporations, Non-Solicitation Agreements, Professional Malpractice, Promissory Notes, and Regulatory Compliance.


Operating a Franchise Business in WilmingtonOperating a franchise business is a great way to operate a business provided you begin the process properly and stay compliant with all relevant laws.  A franchise business typically comes with a set framework for how the business will be conducted, products or services offered, pricing, and special promotions.  Franchisors also give franchisees very specific guidelines for everything from advertising to how services or products are offered to the public. For many, running a franchise business is ideal – they are provided with a business formula with a proven track record of success.

As an attorney for numerous business owners in and around the Wilmington area, Wesley Scott Jones knows that it can potentially be easier and less stressful to operate a franchise as opposed to a solo enterprise.  Another plus is the fact that around the country, franchises seem to have a higher survival rate compared to other similar ventures.  Having the financial backing and name recognition of an established business certainly doesn’t hurt.

However, starting and operating a franchise business can be daunting, complicated and unnerving.  One of the problems that can arise is the iron-clad nature of the contracts that large franchisors want franchisees to sign.  What should be the proper term for the contract – 5, 10, 20 years?  What kind of Security Agreements, if any, should you be willing to sign in favor of the franchisee?  Do you fully understand all of the terms and conditions of the Franchise Agreement and will you be able to comply with all them?  Should you operate the new business as a sole proprietorship or under a new Business Entity?  That’s why anyone considering a franchise business should discuss his or her plans with a business law professional, like Wesley Jones.

Wesley Jones also has experience with taking a business from private ownership to franchise, including consulting on and drawing up Contracts and all legal paperwork involved in the transaction.

To schedule an appointment with attorney Jones, please give his office a call at 910-256-5800.   Initial phone consultations are free.  Call now!

The office is located in Lumina Station, just before the Wrightsville Beach drawbridge. The address is 1904 Eastwood Road, Suite 301.  Parking is free parking! 

Wesley Jones is a Business Law Attorney serving all of Southeastern North Carolina including  New Hanover County (e.g. Wilmington, Kure Beach, Wrightsville Beach, Carolina Beach, Landfall and Mayfaire), all of Pender County (e.g. Burgaw and Topsail Beach) and all of Brunswick County (e.g. Bolivia, Southport, Ocean Isle, and Oak Island).

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Business Litigation Lawyer in Wilmington, NC

An Attorney reviewing documents with clients.Those that go into business for themselves usually do so for a few reasons:

  • They have found their passion
  • They feel that they can provide their clientele with needed goods or services
  • They are confident that they can make a living through their commercial or business venture

Of course astute owners will be conscientious to ensure that their business operates by the book and that their customers are absolutely satisfied. Unfortunately, even the best-laid plans can take a negative turn. Disputes can arise in cases of business against business or private individual vs. business. Thankfully, many such matters are often resolved through negotiations or arbitration proceedings. When matters cannot be resolved, Business Litigation is an effective means to do so.

Local Wilmington attorney, Wesley Scott Jones, is well-versed in the realm of Business Litigation. Because of its wide scope, when dealing with matters of Business Litigation, it is extremely beneficial to retain the services of an experienced professional. Attorney Wesley Scott Jones has a high degree of expertise in managing disagreements that can result in the various stages of business startup and ownership. He has handled a number of cases involving conflicts between business partners, customers, employees and third party contractors. Jones can also work with clients who are caught in disputes involved in the process of starting up, operating, or dissolving a business.

From banks to builders, small business owners to sub contractors, each different industry comes with a specific set of potential problems. Wesley Scott Jones has gone to bat for his clients on issues representing the full spectrum of possibilities unique to businesses, including general disputes, fraud, bill collection, breach of contract and unfinished work. Choosing a lawyer who is knowledgeable on the multi-faceted world of business law can be invaluable in protecting your rights and your company’s business interests.

To learn more about the various industries Jones has represented and case topics he deals with, please visit this website to learn more:

To contact the office of Wesley Scott Jones directly, simply call 919-256-5800.


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Starting a Business in Wilmington NC

Woman sitting with arms crossed.So, you have developed an innovative business plan, secured financial backing, found the ideal location, thought up a great name, designed a logo, and composed a help wanted ad for your future staff. As any business owner knows, it’s going to take much more to get your operation off the ground. At the law firm of Wesley Scott Jones, we can guide you through the legal processes involved with setting up a business, non-profit, limited liability company, or corporation.

Some of the most important considerations that Wilmington business owners must first decide on are how their operation will be set up in terms type and structure. There are several different strategies and we will be able to guide you to one that is the most advantageous for meeting your business objectives. As an  experienced business attorney, Wes is very familiar with the legal aspects of what it takes for a successful sole proprietorship, partnership, LLC, non-profit, or full corporation. The type of structure you choose is often the key to which type of business entity you should select.

We can also discuss issues such as insurance, operating agreements, shareholder issues, non-compete clauses, and many other details today’s business owners must be aware of. Another aspect to be addressed, is the way a business is registered for tax purposes. We are very familiar with the N.C. state laws and local requirements for business registration and can discuss

The process of establishing a business also involves an operating license. Wes is knowledgeable as to what is necessary in the state of N.C. and in the Greater Wilmington area for the specific licensing regulations, based on the business structure. Since there are definite guidelines that govern how and where various businesses can operate, retaining the counsel of an attorney skilled in these matters is vital for any owner wishing to avoid fines, red tape, or any legal difficulties.

To learn more about topics such as these and many more that you should be aware of as a business owner or operator, please visit the Business Law section on the website of Wesley Scott Jones.

To contact the office of Wesley Scott Jones directly, please call 919-256-5800.


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Contract Disputes – Business or Construction

Contracts are an essential part of doing business. From setting up your company, forming partnerships, corporations, LLCs, establishing shareholders, hiring employees, and working with customers, contracts are a necessary component for protecting you, your business, and your assets.

Unfortunately, even contracts written with the utmost attention to detail can still come under dispute.  Working with an experienced attorney to handle the matters addressed in any contract dispute will be to your advantage.  Business and contract disputes can lead to different possible outcomes: trial litigation, arbitration, or mediation.  An experienced business lawyer will be able to analyze the circumstances and navigate your options to arrive at the best possible outcome for you.

The Law Office of Wesley Scott Jones in Wilmington, NC offers business and construction law services to handle business disputes on behalf of clients.  If you are currently involved in a contract dispute in the greater Wilmington NC area or want to make sure you’re protected in future possible disputes, contact Wes Jones to schedule a meeting and consultation: 910-256-5800

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Business Law Services
Business Litigation
Construction Law
Construction Law Litigation

New Website for

Thank you for visiting!  We are thrilled to present our new website with great information about our practice as well as helpful resources for people seeking guidance in the areas of Business and/or Construction Law.

Let me start by telling you a little about myself.  I am an attorney here in Wilmington, North Carolina with an emphasis on Business and Construction Law as well as Commercial and Contract Disputes.  I offer a wide range of services in those fields including litigation and non-litigation services.

Wilmington is a community with a growing number of businesses, many of those in the Construction sector.  My clients range in size from large to small businesses and my services include business formation and dissolution, drafting operating agreements, and shareholders and directors’ minutes as well as contract review and drafting.

I also offer Business Law Litigation Services to handle matters including ownership disputes, contract disputes, payment disputes, and more.

I invite you to visit my Practice Areas and Services page to learn more about my range of services for businesses in and around Wilmington, NC.

We appreciate your interest in our practice and ask that you please contact us directly with your business law, construction law, or commercial dispute inquiries: 910-256-5800.