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Forming a C-Corporation in North Carolina

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How to Form a C-Corporation in North Carolina

North Carolina offers scenic views, a moderate climate, a rich history in culture and art, and offers both world-class sports and recreational opportunities. Together, North Carolina is an exceptional place to live and do business in.

When forming an C-Corporation in the state of North Carolina, you must complete the following requirements:

  • Select a business name according to requirements
  • File all necessary articles of organization and submit filing fees
  • Fulfill registered agent requirements
  • Register your federal tax ID number with the IRS
  • Complete annual reports
  • Establish initial corporate directors 
  • Prepare corporate bylaws
  • Set up a corporate records book
  • Hold a board of directors meeting
  • Issue stock

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Select Business Name According to State Requirements

File Articles of Organization and Submit Filing Fees

  • File all Articles of Incorporation in compliance with the North Carolina Business Corporation Act or similar statutes in other states, and by electing S-Corporation status under Subchapter S of the Internal Revenue Code. G.S. 55-2-01 to 55-2-07 and Chapter 55D.
  • Prepare corporate bylaws
    • The bylaws establish basic ground rules for operation. However, you do not need to file the bylaws with the state.
  • Filing Fees: The filing fee to form a C-Corporation in North Carolina is $125 and must be submitted by mail. It typically takes about 10 to 15 days to form.

Fulfill Registered Agent Service Requirements

  • A registered agent is responsible for receiving legal notices on behalf of your organization.
  • The appointed registered agent must be physically located in the state and maintain an office that is open during regular business hours.

Register Your Federal Tax ID Number with the IRS

  • An EIN is legally required for all C-Corporations to obtain.
  • You can register your business with the North Carolina Department of Revenue by completing and submitting Form NC-BR, or by registering online. When you register, you will be issued an account ID number for such tax purposes as income tax withholding, sales and use tax, and machinery and equipment tax.
  • Additional Tax Filing Regulations and Requirements:
    • On corporate tax returns, a C corporation must declare all profits and losses.
    • North Carolina C Corporation shareholders do not report any of the business income and expense on their individual tax return. The corporation files tax returns and pays its income taxes (at generally lower tax rates than would individuals) while the individual shareholders report and pay personal income taxes only on monies paid them by the corporation.
    • Shareholders are required to pay personal income taxes on income from dividends paid by a C Corporation even though income taxes have previously been paid by the corporation. This leads to what is commonly referred to as “double taxation.”

Complete Annual Reports

  • Annual reports are due on or before April 15th on an annual frequency. The annual report may either be filed electronically, or by downloading an online, pre-populated annual report and mailing it to the NC Secretary of State’s Office.
  • The annual report fee for a limited liability company is $200.

Establish Initial Corporate Directors 

  • The incorporator—the person who signed the articles—must appoint the initial corporate directors who will serve on the board until the first annual meeting of shareholders (when the board members who will serve for the next term are elected by the shareholders).
  • The incorporator must fill in an “Incorporator’s Statement” showing the names and addresses of the initial directors. They must sign the statement and place a copy in the corporate records book; however, the statement is not required to be filed with the state.

Set Up a Corporate Records Book

  • Set up a corporate records book in which you keep all your corporation’s important papers, including minutes of director and shareholder meetings, stock certificates, and stock certificate stubs.
    • Keep your corporate records book at the principal office of your corporation. You can use a three-ring binder as the corporate records book or order a special corporate records kit through a corporate kit supplier.

Prepare Corporate Bylaws

  • Drafted by the Board of Directors, the bylaws establish basic ground rules for operation. However, you do not need to file the bylaws with the state.
  • Your corporation is not legally required to have corporate bylaws, but you should adopt them because they (1) establish your corporation’s operating rules, and (2) help show banks, creditors, the IRS, and others that your corporation is legitimate.

Hold Your First Board of Directors Meeting 

  • At this meeting, directors appoint corporate officers, adopt bylaws, select a corporate bank, authorize issuance of shares of stock, set the corporation’s fiscal year, and adopt an official stock certificate form and corporate seal.
    • The directors’ actions must be recorded in corporate minutes prepared by the incorporator or any of the directors.

Issue Stock

  • Ownership in a C-Corporation is expressed through the issuance of shares. The management of the corporation is governed by a board of directors who are elected by the shareholders.
    • Enter each shareholder’s name and contact information in the corporation’s stock transfer ledger.
    • A share of stock in your corporation is classified as a security under state and federal securities laws that regulate the offer and sale of corporate stock.
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