starting a business

January 20, 2014 By Wesley Jones

FORMING A CORPORATION IN NORTH CAROLINA

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.

December 15, 2013 By Wesley Jones

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.

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.

December 7, 2013 By Wesley Jones

NORTH CAROLINA NONCOMPETITION AGREEMENTS

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).

November 13, 2013 By Wesley Jones

TIPS FOR BUSINESS STARTUPS IN WILMINGTON, NC

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).

June 5, 2013 By Wesley Jones

Four Major Business Formation Types

Anyone who has ever contemplated setting up a business was likely overwhelmed by the vast number of decisions such a venture demands. Perhaps more than or equal to considerations such as a business plan, identification of measurable objectives, location, and name, how the business is structured is of utmost importance.

When establishing a “business entity”, there are four different ways to do it. Depending on the circumstances and nature of the proposed business, each choice presents advantages and disadvantages. Rather than take the advice of friends or family members, it is always best to discuss your options with a qualified and experienced business law attorney. Doing so will give you the piece of mind that comes with covering all the bases, for both your own legal protection and possible tax benefits as well!

The four ways in which a business may be set up are: Sole Proprietorship, Partnership, Corporation, and Limited Liability Company or LLC.

1. Sole Proprietorship – This is the most simple business entity there is. As the name implies, the establishment has just one owner. That owner may choose to use his or her own name or “d/b/a”, which means, “doing business as”. The requirements are minimal – just a social security number and the necessary permits and licenses.

These are often a top choice for small businesses because they are so economical to start up. Benefits include the fact that income is taxed once, instead of twice as a company and then personal source of revenue. Sole proprietorships are not subjected to as much government involvement and taxation as some other business types. Since only one person is involved, conflicts with partners, their associates or family members are nonexistent. Also, it is very easy to dissolve.

A major point to be aware of is that under the law, there is no distinction between the individual and the business. That can sometimes jeopardize the owner’s personal assets should the business go through financial problems. The same is true in the reverse, should the business owner experience hardships, such as divorce, illness, or some other personal difficulty, the business may be negatively affected.

It takes an astute individual to successfully operate this type of business. They are 100 percent responsible for all of the decisions and raising capital. There are also certain employee benefits that can not be fully deducted from the firm’s income. Owners should realize that some costs could only be partially deducted later as an adjustment.

2. Partnership – This formation type takes place when two or more individuals form a written agreement to operate a business together. Partnerships can also be established between other businesses and among one or more businesses and one or more individuals. This choice is also fairly simple and inexpensive to establish. However, partnerships have their own unique set of tax and liability issues.

Of course, this type of business allows for shared responsibilities when it comes to raising capital, making important decisions, and managing operations. On the flip side, when conflicts arise, no matter how large or small, unresolved issues can endanger the business. Those considering a partnership need to proceed with caution, because if one partner makes a financial or legal misstep, it can spell disaster for the company as a whole.

3. Corporation – Going through the process known as “incorporation” sets up the most flexible type of company. Corporations are state-chartered and have a number of legal rights. Its owners have limited liability because the corporation has separate legal standing. The owners are thereby protected from personal legal action, should the business be sued. However, corporations undergo a great deal of scrutiny and are held accountable for their actions at a higher level.

For example, the government oversees the operations of a corporation and requires them to appoint a board of directors, hold regular meetings, record and publish meeting minutes. Income is also subject to taxation as both personal and business revenue. Another point to keep in mind is that ownership can be transferred through the sale of stock or transfer of a controlling interest within the corporation.

4. Limited Liability Company-LLC – These types of businesses have many of the same built-in advantages as corporations. Along with their limited liability, LLCs can be owned by a variety of entities, including individuals, trusts, other LLCs, and corporations. When it is set up under the proper guidelines, an LLC can be taxed like a partnership, which is an advantage. However, there is quite a bit of paperwork required to form and operate an LLC to ensure that it will not be taxed as a corporation.

Although all four of theses common business entities are fairly straight forward, there are slight differences that govern their creation and operation, which can vary from state to state. That’s why it is always a very good idea to retain the services of an experienced business lawyer. Wilmington attorney Wes Jones is well-versed in these matters. Please make an appointment with Wes so he may assist you in exploring options and deciding which approach is best for your next business venture. Read more about his practice and the other types of cases he handles.

The office is located in Lumina Station, just before the Wrightsville Beach drawbridge at 1904 Eastwood Avenue, Suite 30. To make an appointment or get more information on the services Attorney Wes Jones provides, please call 910-256-5600.