FORMING A CORPORATION IN NORTH CAROLINA


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.

ASSET PURCHASE AGREEMENTS: Closing Considerations in North Carolina

Depending upon the type of Business Assets involved, the following are just a few of the documents that a potential Buyer and Seller may want to include in an Asset Purchase Agreement at Closing:

  • The Parties will need a Bill of Sale and Assignment of Property.
  • The Buyer should determine if it needs to form a new Business Entity with which to buy the Seller’s assets.
  • The Buyer should consider whether it wants or need a Noncompetion Agreement with the Seller and/or the Seller’s Shareholders/Members, and/or Key Employees.
  • If Intellectual Property is involved, the parties will need an Assignment of Trademarks, Patents, and/or Copyrights, as applicable.
  • If the Seller’s website domain, email addresses, and/or telephone numbers are involved, the parties will need an Assignment Agreement to cover these items.
  • The parties will need an Assignment of Contracts, Leases, and/or Liabilities as applicable.
  • If the Buyer wants the Seller’s owners and/or Key Employees to assist Buyer with Buyer’s new business for a period of time after Closing, the Buyer will need an Employment/Consulting Agreement with these parties.
  • If the Buyer is not paying cash at Closing, the Seller will at a minimum want a Promissory Note signed by the Buyer, and a Seller should consider whether additional security is needed in the form of a Personal Guarantee Agreement signed by the Buyer’s individual Owners, a Security Agreement on transferred personal property, or a Deed of Trust on transferred Real Property.
  • The Buyer will want appropriate Approvals by the Seller’s Stockholders/Members and Board or Directors/Members.
  • The Seller will want appropriate Approvals by the Buyer’s Stockholders/Members and Board of Directors/Members.

If you are planning to Purchase the Assets of an existing business, the foregoing documents are just a few that a potential Buyer and Seller may want to include in an Asset Purchase Agreement.  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:   Annual Meeting Minutes, Annual Reports, Assignments, Board of Director’s Meeting Minutes, Business Entity Startup and Formation, Buying or Selling a Business, and Business Dissolution and Liquidation, Bylaws, Contract Review and Drafting (including Non-Compete or Noncompetition Agreements, Confidentiality Agreements, and Nondisclosure Agreements), Due Diligence Research, Drafting Shareholder and Operating Agreements, Drafting Shareholders and Directors Meeting Minutes,  Leases, Licensing, Limited Liability Company Formation, LLCs, Meeting Minutes, Non-Profit Corporations, Non-Solicitation Agreements, Organizational Minutes, Partnership Formation, Professional Malpractice, Promissory Notes, Regulations,  Shareholder Agreements, Shareholder’s Meeting Minutes, and Starting and Operating a Franchisee Business.

ASSET PURCHASE AGREEMENTS: Pre-Closing Considerations in North Carolina

Depending upon the type of business assets that you want to purchase, the following are just a few of the things that a potential Buyer should consider:

  • Do you need a Nondisclosure Agreement with the Seller?
  • Is there an existing Broker/Finder Agreement that affects the transaction?
  • Have you determined all of the Related Parties on which due diligence should be performed (Seller, Stockholders/Members, Subsidiaries, or other Affiliated Entities)?
  • What is the Lien Status of the property to be conveyed?
  • Can the Seller produce a Certificate of Good Standing from the Secretary of State?
  • Are there any Third Party Consents required by Contracts with third parties that are to be assigned by Seller and assumed by Buyer?
  • Have you reviewed the Seller’s Financial Information?

If you are planning to Purchase the Assets of an existing business, these are just a few of the considerations that must be thought through and preferably verified prior to Closing on an Asset Purchase transaction in North Carolina. If you need help, call an experienced Business Attorney for advice and help. Call Wesley 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).

NORTH CAROLINA NONCOMPETITION AGREEMENTS

Business Law Contract

1. Buying a New Business:

  • If you are buying a new business, either by an Asset Purchase or Stock Purchase, you should consider whether you should require the Seller and its owners and affiliates to sign a Non-Compete Agreement.
  • When you buy an existing business, part of what you are buying is the established know-how and goodwill that the Seller has accumulated through the years that makes the business successful.
  • You will be making an enormous investment into this business so you probably want to make sure the Seller, to whom you just paid a lot of money, will not set up shop right across the street in competition with you.

2. Starting a new Business or Operating an Existing Business:

  • Even if you are starting a new business or operating an existing business, you do not want Key Employees to steal your proprietary secrets and know-how that you have perfected over the years.
  • Way to often, employees will work for an employer for a number of years, acquire their customers lists, pricing guides, and other business operation methods, only to decide that they can do it better.
  • Why work for the owner when you can be the owner?  Most businesses can benefit from have Key Employees sign a Non-Compete Agreement.

The terms of a Noncompetition Agreement will vary based upon your particular situation.  However, all Noncompetition Agreements in North Carolina must be supported by adequate and New Consideration and they must be reasonable in scope as to Geographical and Time restrictions.

If you are Buying a New Business and want to protect yourself from the Seller competing directly against you and the new business OR if you have a New or Current Business where key employees have access to all of your proprietary business information, call an experienced lawyer to help you through the process.  Call Wesley Jones now at 910-256-5800 for a free telephone consultation.

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 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).

<div id=”Lcom”><a href=”http://www.lawyer.com/wesley-jones.html”><img alt=”Lawyer.com” src=”http://www.lawyer.com/seal/1733082i.png”></a></div><script type=”text/javascript” src=”http://www.lawyer.com/seal.js”></script>

Business Litigation Matters

Business Litigation MattersWhen Wilmington attorney Wesley Scott Jones takes on a case, his goal is to handle the matter swiftly and effectively.  As a business and lawyer and litigator, Wesley appreciates that his clients want to get back to business, not spend their valuable time in a courtroom. Over the years, attorney Jones has represented both plaintiffs and defendants from large and small businesses, including family-owned businesses, Corporations, Limited Liability Companies, Sole Proprietors, and Franchises, both big and small in District Court, Superior Court, Federal Court and in Mediation.  Learn more about Business Litigation Services from Wesley Jones.

Whether the business owner is a new or experienced professional, the wide variety of issues that can escalate into a legal dispute is truly amazing.  That is why it makes sense to retain the services of a skilled litigator, just in case.  In recent years, Attorney Jones has represented clients throughout the courtrooms of southeastern North Carolina, in matters such as:

  • Account Collection
  • Breach of Contract
  • Breach of Corporate Duty
  • Business Judgment Rule
  • Contract Disputes
  • Collection of Past Due Accounts
  • Deceptive Trade Practices
  • Deceptive Business Practices
  • Debt Collection
  • Delinquent Accounts
  • False Statements
  • Franchisor-Franchisee Disputes
  • Fraud
  • Interference with Contracts or Business Relations
  • Judgment Recovery
  • Misappropriation of Trade Secrets
  • Misrepresentation
  • Negligent Misrepresentation
  • Nonpayment
  • Ownership Disputes
  • Partnership Disputes
  • Payment Disputes
  • Piercing the Corporate Veil
  • Torts
  • Unfair and Deceptive Trade Practices
  • Unfinished Work
  • Undelivered Goods

Most everyone going into a business or construction deal is usually hopeful and excited about the anticipated end result.  Ensure smooth sailing for your business and gain piece of mind with a little help from the Law Office of Wesley Scott Jones.  To learn more about the services his firm provides, please call lawyer Wesley Jones today at 910-256-5800 for a free consultation.

Wesley Jones is a Litigation Lawyer 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).

TIPS FOR BUSINESS STARTUPS IN WILMINGTON, NC

An Attorney reviewing documents with clients.When taking the leap to start a business, it pays to have a few skilled professionals behind you. Although you may be a natural with managing finances and employees along with marketing and delivering the goods or services the firm will provide, there’s true piece of mind when all of the bases are truly covered. Local business attorney Wesley Scott Jones has helped hundreds of clients in the greater Wilmington area develop a blueprint for success.

As with most endeavors, creating a foolproof plan is key.  With that idea in mind, please consider these tips for streamlining a business startup.

  • Hire an attorney, such as Wes, who is well versed in all aspects of business and contract law.
  • Hire a local accountant who is also familiar with the territory.  As a business owner, you will discover that in the long run, having experts on your team in those two disciplines is priceless.

Next, your attorney and accountant will be able to advise and guide you on aspects such as:

  • Structuring your business entity
  • Registering with the local, state, and federal tax offices
  • Protecting yourself from deadbeat clients (See: Collection of Past Due Accounts)
  • Preparing for employee issues, such as Noncompetition Agreements, Independent Contractor Agreements, Employment Agreements, and defining your responsibilities to those individuals
  • Contract drafting
  • Draft and implement company policies, including terms of service, disclosure, and privacy matters
  • Financial aspects such as payroll, income tax forms, profit and loss statements

Please note that the above tips are merely suggestions and each company will have its own list of areas to address. Because every business is unique and laws and financial guidelines vary state by state and even county by county, having skilled professionals at your disposal is just the responsible thing to do.

Attorney Wesley Scott Jones would be happy to discuss more about the essential steps you’ll need to consider for your specific company.  To schedule an appointment for a free consultation please give his office a call at now 910-256-5800.

Wesley Jones is a Business Lawyer 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).

Avoiding Disputes Over Past Due Accounts

Avoiding Disputes over Past Due AccountsAs a Wilmington attorney for a variety of business owners and operators throughout southeastern N.C., Wesley Scott Jones has handled numerous disputes over past due notices.

For over-burdened business owners, handling past-due accounts can be a thankless, time-consuming task. That’s why so many firms choose to take action only when receivables are 90 days or more past due. This tactic may result in limiting your cash flow and profits.

In an effort to assist the parties involved before it becomes a legal issue, Wes has a few suggestions:

  • Stay on top of unpaid receivables and create a safety net in the form of a tighter credit policy.
  • Set up an accounts receivable aging report so you’ll be able to recognize non-payment patterns before thy get out of control.
  • AllBusiness.com reports that, “Studies reveal that the likelihood of collecting receivables drops drastically as time goes on-from more than 90 percent after 30 days to 74 percent after 90 days and just 50 percent after six months.” With that in mind, establish a policy that any customer 35 days past due, will receive a friendly phone call as a reminder.
  • Since missed payments can and do happen, consider working out a specific deal with a customer who’s honestly had a cash flow issue. Establish a realistic payment schedule and identify a pay-off goal day. Have it legally drafted and both parties must sign in front of witnesses. Only do this for very special cases.
  • Follow up courtesy calls by mailing past-due notices and letters by regular mail – not e-mail! Sometimes a little humor can go a long way, such as a postcard with an appropriate graphic and a message like, “Please pay your bill so I can pay mine.”  Always include a phone number in case the customer needs to explain his or her situation.

If 90 days or more have passed and you still have not received payment, it’s time to contact the office of Wesley Scott Jones: 910-256-5800. Let Wes help you recoup past due accounts in a legal manner that will deliver results.

Related Post:

Collection of Past Due Accounts

Adding a DBA to an S-Corporation or LLC

Adding A DBA to an SCorp or LLCAs a business grows and evolves, it may become apparent that operating under a different name, or re-branding, may be beneficial. In that case, choosing a DBA may be the way to go.

To review, DBA stands for “doing business as.” In some states, this may be referred to as operating under a “trade name” or “assumed name.” Many business, and especially franchises, are set up this way.

S-corporations are taxed like partnerships and share the benefits of incorporation. The IRS limits the number of shareholders in this type of company to 100 or less. Next, consider Limited Liability Companies or LLCs. When set up under the proper guidelines, an LLC can be taxed like a partnership, which is an advantage.

If a business owner decides to add a DBA to an S-Corp or LLC, there are definite legal guidelines. Please note they vary slightly from state to state. That’s why it’s important to choose a qualified, licensed and experienced business attorney, such as Wesley Scott Jones, for such matters. Here’s a look at the steps involved:

  • A meeting with all of the shareholders and board of directors must be held. In order for the inclusion of the DBA to be approved, a majority must support the action. It is essential that the proceedings of this meeting are recorded in the minutes of the company’s official log.
  • Make sure that the selected DBA name does not conflict with another registered corporate name in your state or a federally registered name or trademark. This query involves checking with the U.S. Patent and Trademark Office and your secretary of state. Check their individual websites, for instructions on how to conduct these searches free of charge.
  • Because each state has different laws in the way DBAs are added, it is necessary to contact the Secretary of State where your company is registered. Either the Secretary of State’s office or the State Corporations Division office can guide you through the steps and required paperwork that must be completed before a DBA can be added to an S-Corp or LLC.
  • Next, new bank accounts must be established to avoid any confusion. The new accounts will need to include information about the full name of the S-Corp or LLC, plus details on the DBA name.
  • Finally, the name change must be filed with the IRS. Please note:
    • ***On the Form 1120-S income tax return, check the “Name Change” box in Section 1, Line H-this is where you will write the new full name of the business. The original DBA name will be listed on the form’s “Name” line.

Your “employer id numbers,” or EIN will not change, because you are not forming a new business, just being added to an existing one.

If you have further questions or would like to discuss the pros and cons of adding your DBA company to an S-Corp or LLC, contact Wes Jones. To contact our directly, call 910-256-5800.

Learn more about our practice and the other types of cases we handle by visiting our wsjlaw.com.

The office is located in Lumina Station, just before the Wrightsville Beach drawbridge. The address is 1904 Eastwood Avenue, Suite 30.

Expert Legal Counsel Can Help Protect Your Small Business

Protect Your Small Business with Legal CounselIf you ask a successful business owner which two outside professionals are indispensable to the operation, the likely answer will be “my accountant and my attorney.”  Why an accountant is beneficial to a small business is pretty straightforward. They can handle the ongoing financial aspects of doing business such as deciphering complicated tax forms, reviewing sales figures, managing expenses, and charting accounts.

When it comes to legal counsel, many small business owners hesitate to retain an attorney after the initial work is complete for the business start up. They typically feel that it is just not necessary to keep in touch with an attorney until there’s a problem. The hole in that approach is that retaining legal counsel can prevent problems from cropping up. Consider it this way: consulting an experienced local business attorney like Wes Jones is equal to the proverbial “ounce of prevention that’s worth a pound of cure.”

Here’s an example of how having legal counsel available comes in handy before problems arise. Attorney Jones can look over your standard contracts or new employee interview questionnaire and bring light to potential situations that could arise. For instance, you may not be aware of certain laws pertaining to anti-discrimination and innocently ask the wrong questions that could justify a lawsuit and big headaches!

Situations like that are why having a consultation arrangement with an attorney, such as Wes Jones is so vital for providing legal review and guidance. Other times when having an attorney on your team is a plus includes:

  • Forming a corporation – Although it is quite possible to file articles of incorporation without lawyers, the administrative side of managing the complex tax and legal requirements often requires the services of a corporate attorney. Also keep in mind that it may be simple enough to form a legal business entity such as an LLC or business partnership without legal help, however, forming a corporation with shareholders and a board is a more complex process.
  • Litigation – This can include dealing with lawsuits by current or former employees or customers, breach of contract matters, debt collection, discrimination or harassment lawsuits, environmental lawsuits, government investigations for legal violations, and a variety of other types of disputes.
  • Buying or Selling a Business – Attorney Jones has years of experience with negotiating sales agreements, lease agreements, and more.

To learn more about how Wes Jones can assist in your business operations, please schedule a consultation by calling 910-256-5800.

Business Law Clients We Serve in Wilmington NC

Our focus at the Law Office of Wesley Scott Jones in Wilmington, NC is Business Law.  We help clients looking to start a business, grow a business, settle a business dispute, or dissolve a business.  We provide advice to clients on their options regarding any of the above and which option might be best for them considering all their unique circumstances.

Clients that best fit our Business Law Services include:

  • Banks
  • Builders
  • Creditors
  • Corporations
  • Financial Institutions
  • Franchisees
  • Franchisors
  • LLCs
  • Non Profits
  • Small Business Owners
  • Sole Proprietors
  • Subcontractors

We represent these business clients in both litigation and non-litigation matters.  Litigation matters may include Ownership Disputes, Contract Disputes, Payment Disputes, Collection of Past Due Accounts, and Franchisor-Franchisee Disputes.  Non litigation matters may include Business Entity Startup and Formation, Drafting Agreements, Contract Review and Drafting, Starting and Operating a Franchisee Business, Buying or Selling a Business, and Business Dissloution and Liquidation.

We welcome business owners, partners, or shareholders in the greater Wilmington area of North Carolina to contact our office to learn more about the business clients we serve and the services we offer: 910-256-5800