The U.S. Bureau of Labor Statistics (BLS) report captured over 4.9 million employments in North Carolina as of March 2023. According to NC Pandemic Recovery Office, about 4,884,600 jobs were available in North Carolina in February 2023. The labor force in the state consists of 5,169,011 individuals, and the unemployment rate is 3.6%. The number of businesses per sector in North Carolina as of February 2023 are:
- Retail Trade – 520,200
- Construction – 253,500
- Information – 84,400
- Local Government – 447,900
- Wholesale Trade – 208,500
- Federal Government – 77,100
- State Government – 198,300
- Mining & Logging – 5,300
- Finance & Insurance – 227,800
- Educational Services – 106,800
- Accommodation & Food Services – 452,100
- Health Care & Social Services – 563,500
- Management of Companies – 83,400
- Manufacturing Durable Goods – 256,900
- Manufacturing Nondurable Goods – 221,300
- Real Estate & Rental Leasing – 69,400
- Arts, Entertainment, & Recreation – 74,900
- Transportation, Warehousing, & Utilities – 195,200
- Professional, Scientific, & Technical Services – 329,700
- Administrative & Waste Management – 334,400
As of 2022, about 994,576 (99.6) of the establishments in North Carolina were small businesses. These small businesses employed about 1.7 million employees. The real gross domestic product (GDP) of North Carolina increased at an annual rate of 3.2% in 2022. That same year personal income increased at an annual rate of 3.6%.
Starting a business in North Carolina involves planning, making key decisions, and completing several legal steps. Individuals interested in starting a business in North Carolina can follow the steps below:
- Step 1: Performing Market Research
- Step 2: Drawing up a Business Plan
- Step 3: Acquiring a Business License or Permit
- Step 4: Securing Funding
- Step 5: Choosing a Business structure
- Step 6: Choosing a Business Location
- Step 7: Registering the Business
Business owners are also required to:
- Obtain Necessary Licenses & Permits: although North Carolina does not have a single statewide business license for all businesses, some businesses may be required to obtain licenses and permits. Individuals who provide certain professional services may have to apply for a North Carolina State Privilege License. Complete the B-202A Form to do so.
- Apply for sales & use tax number: Every individual, business, or facilitator engaged in the following business in North Carolina must register for sales and use tax with the North Carolina Department of Revenue:
- Selling tangible personal property at retail
- Selling and providing taxable services
- Selling a specific digital property
- Operating a dry cleaner, laundry, or other similar business
- Providing rentals of accommodations
- Selling taxable service contracts
- Charging admission to an entertainment activity
- Making marketplace-facilitated sales
- Renting or leasing taxable tangible personal property in North Carolina
- Selling tangible personal property, certain digital property, or providing a taxable service at a specialty market or other event
- Apply for Employer Identification Number (EIN): Individuals starting a new business in North Carolina must apply for an EIN with the Internal Revenue Service (IRS). application for EIN can be made online on the IRS website.
- Prepare for applicable taxes: Some businesses may be required to pay some taxes due to their size and structure. Such taxes include Privilege License Tax, franchise tax, income tax withholding, unemployment insurance tax, and federal taxes.
- Obtain insurance: The North Carolina Workers’ Compensation Act requires that all businesses that employ three or more employees obtain workers’ compensation insurance to pay workers’ compensation benefits to their employees.
Step 1: What Kind of Business Should I Start in North Carolina?
There are several businesses a person can start in North Carolina. Therefore, it might be difficult to know the particular one to start. The best business in the state depends on factors like market size and demand, location, budget, available time and resources, scalability, the founder’s passion, and interest. It is best to consult with experts like accountants, lawyers, or business coaches before venturing into any business in North Carolina.
How to Do Market Research in North Carolina
New businesses emerge every day. For example, about 13,959 new business applications were received in North Carolina in March 2023. For these businesses to succeed, business owners must thoroughly understand their market. Hence, the need for market research. Market research is the way business owners evaluate the viability of a new product or service by gathering data from potential customers. Businesses can conduct:
- Primary market research: This includes exploratory and specific research. Exploratory research is less structured, and it involves open-ended questions. The questions can be asked in the form of questionnaires, telephone interviews, or in a focus group setting. Specific research delves deeper into the problems or issues identified in exploratory research.
- Secondary market research: This involves gathering data from external sources. For example, businesses can gather data from trade association research reports and research from other businesses operating in similar market sectors.
The first step in conducting market research is determining the study’s goals. The goal should be tailored toward the company’s needs. Afterward, determine the type of consumers that will be part of the research and data collection methods. Collect the data and analyze the results. Lastly, use data to make company decisions.
Step 2: How to Write a Business Plan
A business plan is a written document demonstrating the feasibility of a prospective new business. It provides a roadmap for the business’s structure, growth, and its current and future operations. Entrepreneurs use business plans to get funds or bring on new partners into the business. A business plan can be used as a tool to convince people that working with a company or investing in it company is worth it. There is no right or wrong way to write a business plan, just ensure the plan meets the business needs. Generally, business plans can either be written in a traditional or lean format. The traditional format provides detailed information about the business, while the lean format just provides a summary of the key elements of the business. Below is how to write a traditional business plan format:
- Executive summary: This is where the business owners briefly explain what the company is and why it will be successful. It can include the mission statement, product or service, and basic information about the company’s leadership team, employees, and location. Business owners who plan to ask for financing can provide financial information and high-level growth plans at this section.
- Company description: Provide detailed information about the company. The problem the business seeks to solve, specifically list out the consumers, organization, or businesses the company plans to serve. Outline the competitive advantages that will make the business a success. Talk about the experts employed in the company and the best location for the business.
- Market analysis: Having a good understanding of the industry outlook and target market will help in writing this section. Do competitive research to know the strengths and weaknesses of other businesses. While conducting the market research, look for trends and themes, what do successful competitors do? Why does it work? Can you do it better?
- Organization and management: Highlight how the company will be structured and who will handle the running. Explain the business structure (whether it is going to be a sole proprietorship, corporation, partnership, or limited liability company (LLC)). Use an organizational chart to lay out the persons in charge of the different aspects of the company. Show how the unique roles of these personnel will contribute to the business’s success. Add the resumes and CVs of key members of the team.
- Service or product line: Explain the products and services the company offers. Explain how what the company sells benefits customers and what the product lifecycle looks like. Share plans for intellectual property, such as copyright or patent filings.
- Marketing and sales: Describe how the business will attract and retain customers. Provide a detailed explanation of market and sales strategies.
- Funding request: Businesses planning to ask for financial assistance should include this section in their business plan. Explain the amount of funding that will be needed for the next 5 years. The business owner should specify if they want debt or equity, the funding terms, and the repayment plan. Specify what the funds will be used for and describe future strategic financial plans.
- Financial projections: Asides from the financial request, describe the business’ financial projections. This is the point to talk about the stability of the business and that the enterprise will be a financial success. Established businesses can add income statements, balance sheets, and cash flow statements for the last three to five years to their business plan. Business owners can use graphs and charts to tell the business’s financial story.
- Appendix: Provide supporting documents like credit histories, patents, resumes, letters of reference, product pictures, permits, licenses, legal documents, and other contracts.
Step 3: Do I Need a Business License in North Carolina
North Carolina has no state-issued general business licenses for all businesses operating in the state. As such, some businesses may be subject to several state business licenses while others may not. The NC Department of Commerce Labor & Economic Analysis Division has an online database where individuals can find all the professional licenses, business licenses, and privilege licenses required to conduct business in North Carolina.
How Much Does a Business License Cost in North Carolina
There are no fixed fees for business licenses in North Carolina because there is no single general license for all businesses. Therefore, the cost of a business license varies by occupation and license type. For example, the North Carolina Board of Cosmetic Art Examiners charges cosmetologists $49 for a business license which is only valid for 3 years. In contrast, the NC Board of Examiners of Plumbing, Heating, and Fire Sprinkler Contractors charges $150 for a Plumbing Contractor (Class 1) business license.
How to Register for a Sellers Permit in North Carolina
Individuals can register for a sellers permit (or sales and use tax) online, by mail, or in person at the North Carolina Department of Revenue’s Office (NCDOR). Here is how to register for a seller’s permit online:
- Go to the NCDOR website
- Click the “Taxes & Forms” menu at the top bar
- Select “Sales and Use Tax” from the drop-down menu
- Click the “Registration” link under the “General Information” drop-down arrow
- Click the “Register Online” link under the “Registration” section
- Scroll down and click the “Online Business Registration” button
- Read through the information on the page and click the next button
- Select an ownership type and click the next button
- Follow the prompts and prepare the following information to complete the registration:
- Date when the sales will start
- Whether sales will be wholesale, retail, or both
- Description of business
- Knowledge of the types of products and services that the business will sell
- An estimate of the sales tax per month
- Type of accounting method that will be used, whether cash or accrual
- Months’ sales will be made, if seasonal
In-person applications can be made by walk-in and appointment during business hours at any of the NCDOR’s office locations. Mail applicants must submit an NC-BR Business Registration Application for Income Tax Withholding, Sales and Use Tax, and Other Taxes and Service Charge form. The form must be completed, signed, and mailed to:
N.C. Department of Revenue
P.O. Box 25000
Raleigh, NC 27640-0100
After registration, the business will be issued a Certificate of Registration, also known as a Sales and Use Tax Number. After obtaining the tax number, the next step is to file for sales and tax use. Go to the Sales and Use Tax Number and click the “File/Pay Sales and Use Tax (E-500)” link at the right section of the page. Here is how to file:
- In the appropriate search boxes, provide the contact name, email address, and phone number.
- Enter the sales and use tax account ID or SST ID number
- Verify the business and the account details and click next
- Select the appropriate filing and payment option
- Provide the period ending date and select either social security number (for sole proprietors) or a Federal Employer ID number (for corporate, partnership, or LLC)
- Complete the applicable line for the business’s sales and use liability
- After all the calculations have been made, submit a payment by credit/debit card (visa or MasterCard) or bank draft) Payment by card attracts a $2 convenience fee for every $100 increment of tax payment. Bank draft payments are free, but a bank routing number, bank account number, and bank account type will be required to complete the transaction.
- Review the sales and use tax information provided and submit
- A DOR confirmation number will be displayed on the screen
- After the filing, an email confirmation will be sent to the filer within two business days.
Step 4: How Much Does it Cost to Start a Business in North North Carolina?
According to the U.S. Small Business Administration (SBA), most microbusinesses cost about $3,000 to start, while most home-based businesses cost between $2,000 and $5,000. Founders can use the startup worksheet available on the SBA website to calculate their startup costs. Generally, the amount needed to start a business varies depending on the business type, location, operation, and structure. For example, a typical corporation in NC is required to pay the following fees while registering with the SOS:
- Articles of Incorporation – $125
- Application to Reserve a Corporate Name – $30
- Application to Register a Corporate Name by a Foreign Corporation – $10
- Annual Report (effective September 1, 2007) – $25
How to Get Business Funding in North Carolina
Funding is vital to starting a business and maintaining business growth. Business owners in North Carolina figure out how to finance their businesses before starting. Below is how to get business funding in NC:
How to Self-Fund a Business in North Carolina
Self-funding is a major source of funding for new businesses in North Carolina. Self-funding a business means the business owners/founders provide the initial funds to start the business through their own personal resources. Follow the steps below to self-fund a business:
- Set up a business account
- Analyse potential sources of income like personal savings, credit cards, or retirement account
- Transfer personal funds to the business account
- Record the transaction
How to Find Investors in North Carolina
Business owners who have self-funded their businesses also consider outside capital at some point to continue growing their operations. Most of them look out for investors who will help fund their businesses. Business owners must have market demands for their products or services before seeking business investors. This is because investors want proof that the business will be profitable before they can fund it. Here is how to find investors in NC:
- Speak to family and friends
- Browse online databases
- Look for private investors in the community
- Work with a local bank for funding
- Seek out angel investors
- Search for local investing clubs
- Work with venture capitalists
- Attend startup events, conferences, and networking opportunities
Can I Start a Business with No Money in North Carolina?
Yes, by getting venture capital from investors. Investors fund businesses through venture capital investments in exchange for an ownership share and active role in the company. Here is what a start-up founder can do to get venture capital funding in North Carolina:
- Find an investor: Research individual investors or venture capital firms. Go for reputable investors who have ample experience working with startup companies.
- Share business plan: The business owners should give their business plan to the investor to review. The investor will review the business plan to ascertain that it meets their investing criteria.
- Go through the due diligence review: The investors will take time to review the business’s management team, products and services, market, corporate governance documents, and financial statements. Ensure all documentations are up-to-date to avoid any issue.
- Work out the terms: Any investor who wants to invest in the company will provide a term sheet describing the terms and conditions for the fund to invest.
- Investment: The investment will be provided once the business owner agrees on a term sheet. Venture funds usually come in “rounds.” As the company meets milestones, more funds will be made available, with adjustments in price as the company executes its plan.
How to Get a Loan to Start a Business in North Carolina
Getting a loan to start a business in North Carolina requires devoting sufficient time to do research. Individuals must do due diligence to find the right type of loan that will meet their business needs, then compare lenders before they apply for a loan. Individuals can apply for business loans through banks, credit unions, U.S. Small Business Administration (SBA) lenders, online lenders, and nonprofit organizations. For example, the SBA provides loan guarantees to lenders who loan funds to small businesses in North Carolina. Common SBA loan programs are:
The eligibility requirements of SBA loans vary by lenders, what a business does to receive its income, ownership structure, and the location of the business. Generally, businesses must meet SBA size standards, have good repayment plans, and have a sound business objective. To get an SBA-backed loan, business owners must visit the SBA Loans page to find the loan that best suits their business needs. Enter their Zip Code on Lender Match to find a lender in their locality. Apply for a loan through a local lender. If the business meets all the necessary requirements, the lenders will approve the application and help the business manage the loan.
How to Find North Carolina Business Grants
Business grants are funds from government agencies, private foundations, or organizations to support business owners. The money can help pay for start-up costs, expand a business, or cover operational expenses. North Carolina provides different types of business grants to residents, each with its own eligibility requirements. A good place to find NC business grants is online. The state has a central database where business owners can find grant programs across NC state government agencies. Additionally, the North Carolina Department of Commerce provides lists of some business grants available to business owners:
- Job Development Investment Grant (JDIG)
- One North Carolina Fund (OneNC)
- Technology Funds
- Appalachian Regional Commission (ARC) funds
Step 5: Choosing a Business Structure in North Carolina
When starting a business in North Carolina, the business structure needs to be considered. Intending entrepreneurs should consult with attorneys and/or accountants who can help determine the best structure that suits their business needs. The way a business is structured affects major aspects of the enterprise, like taxation, legal and financial liability, and decision-making authority. The common business structures in North Carolina are:
How to Start a Sole Proprietorship in North Carolina
A sole proprietorship is an enterprise owned and operated by an individual. The owner bears all profits, losses, debts, and liabilities of the business. All business decisions and responsibilities fall on the shoulders of the business owner. The sole proprietor does not need to register with the North Carolina Secretary of State (SOS) to establish a sole proprietorship in the state. Per Assumed Business Name Act, any sole proprietorship conducting businesses in North Carolina under an assumed business name must file an assumed name certificate with the Register of Deeds Office in the county where the principal office is located. Some sole proprietors may have to obtain business or professional licenses before starting their businesses, depending on the business type.
How to Start a Corporation in North Carolina
A corporation is a legal entity that is owned by its shareholder(s). The management of a corporation is handled by a board of directors elected by the shareholders. The shareholders are not liable for the debts and obligations of the business, their liabilities are limited to their capital distribution. Per GS § 55D-20(1), a corporation’s name must include the word “corporation,” “incorporated,” “company,” or “limited,” or be abbreviated as “corp.”, “inc.”, “co.” or “ltd.”. There are two major types of corporations in North Carolina:
- C-Corporation: The cost of forming a corporation is higher than other business structures and requires more extensive operational processes, record-keeping, and reporting. Unlike other business structures, C-Corp undergoes double taxation. The corporation is taxed on its income, and shareholders are taxed on dividends and other distributions received from the business. The corporation is separate from its owners. Therefore, the C-corp can continue doing business even if a shareholder leaves the company, dies, or sells their shares. C-Corp can raise capital through the sale of stock. Corporations are dissolved by compliance with the Business Corporations Act voluntarily, administratively, or judicially.
- S-Corporation: They have similar characteristics as C-Corps except for tax purposes. An S-Corps is not taxed on its income rather the income is taxed to its shareholders.
Corporations are formed by filing Articles of Incorporation with the North Carolina Secretary of State. The filing must be in compliance with the North Carolina Business Corporation Act. Below are the documents corporations are to file with the SOS based on the type:
- A business corporation must file an Articles of Incorporation (B-01) with the SOS for $125
- Professional Corporation must file Articles of Incorporation (PC-05) with the SOS for $125
These documents can be submitted online, by mail, or in-person to the NC SOS Business Registration Division. Online applications can be made via the Online Creation Wizard portal. Online applicants must create an account and sign in with their username/notary number and password to use the portal. Mail applications should include the appropriate documents and the required fees. Overnight mail can be sent directly to the physical address. While regular mail should be sent to:
North Carolina Secretary of State
PO Box 29622
Raleigh, NC 27626-0622
In-person applications can be made at the Division from Monday to Friday (excluding State holidays), between 8 a.m. and 5 p.m. Applicants should come along with the appropriate documents and necessary fees. The physical address of the Divison:
North Carolina Secretary of State
2 South Salisbury St.
Raleigh, NC 27601-2903
Phone : (919) 814-5400
Fax: (919) 814-5393
All business corporations (excluding nonprofit corporations) must submit annual reports to the SOS. The annual report is due every 15th day of the fourth month after the end of the company’s fiscal year. Online submissions cost $23, while paper submissions cost $25.
How to Start an LLC in North Carolina
A limited liability company (LLC) is a type of business entity with one or more owners, commonly called “members.” LLC members can be individuals, trusts, corporations, partnerships, or other LLCs. Per GS § 57D-2-01, an LLC is a business entity separate from its interest owners. An LLC combines the characteristics of both a corporation and a partnership. The management of an LLC rests on the shoulders of managers. The liabilities LLC members face are limited to their capital contributions. LLCs do not pay taxes on business income. Rather, LLC members pay taxes on their share business’s profits unless they elect to be taxed as a corporation. An LLC has a perpetual duration but can be dissolved upon the death or withdrawal of a member. Per GS § 55D-20(2), an LLCs name must have the words “limited liability company” or be abbreviated as “L.L.C.” or “LLC” or the combination “limited liability co.”, “ltd. liability co.” or “ltd. liability company.” However, any LLC whose name has the words “low-profit limited liability company” or abbreviated as “L3C” can continue to use that name unless the LLC changes its name by amending its articles of organization. LLCs that render professional service must have the word “Professional” or the abbreviation “P.L.L.C.” or “PLLC.” in their names (GS § 57D-2-02 (10)).
An LLC can be created by filing Articles of Organization (L-01) with the SOS in compliance with the North Carolina Limited Liability Company Act. Professional LLCs must file Articles of Organization (PLLC-02). Filings can be done online, by mail, or in person for $125. Online applications attract an additional $2 for electronic transactions. Here is how to submit an application online:
- Go to the SOS website
- Click the Online Services menu
- Choose the link to “Submit A Creation Filing” from the business registration links
- Click the “Create and Submit Form” button
- Provide answers to the questions on the first page and click next
- Enter the business entity name in the search box and click the name
- Enter Registered Agent Information (name, email address, physical and mailing address)
- Enter principal office information
- Organizer information (capacity of the organizer, full name, business address)
- Enter business email address (optional)
- Choose the document’s effective date and the date the document is executed
- Choose the name of the organizer/member as a signature for the document
- Review the form and click the next button
- Enter an email address to receive the receipt of the filing and click next
- The filing fee information will be displayed. Choose the payment type and enter financial information
- If the transaction is successful, a downloadable receipt will be displayed on the page
The expedited process comes at an additional cost. A 24-hour expedited filing costs an additional $100 (submissions must be received between 8 a.m. and 5 p.m.). A same-day expedited filing costs $200, but submissions must be received before 12 Noon of the requested day. All North Carolina LLCs are required to submit an annual report to the SOS on April 15th of each year after the year of creation. Online submissions cost $203, and paper submissions cost $200.
How to Start a Business Partnership in North Carolina
Per GS § 59-36(a), a North Carolina partnership is a legal partnership comprising two or more persons co-owning a business for profit. All partnerships in the state are established based on the provisions of the
North Carolina Uniform Partnership Act. Partnerships are pass-through entities. Therefore, the business does not pay tax but partners include their share of the partnership’s income or loss on their tax return.
How to Form a General Partnership in North Carolina
This type of business is created by the agreement of two or more individuals. GPs typically exist by default. Therefore, they are not required to file any documents with the NC Secretary of State (SOS). However, GPs with names other than that of the general partners may be required to file a certificate of the assumed name with the Register of Deeds Office in the county where the principal office is located. The general partners are responsible for determining how the business will be governed. They usually do this through written or oral agreements. The partners are unlimitedly liable for the debts and obligations of the GP. The business can be terminated upon the withdrawal or death of a partner. Taxation for GPs is done at the individual level, not the partnership level. Therefore, the partners are taxed personally on the business’s income.
How to Start a Limited Partnership in North Carolina
- Limited Partnerships (LP): an LP is a business entity created by one or more general partners and limited partners (GS § 59-102(8)). The general partners govern the limited partner based on the provisions set forth in the partnership agreement and the Revised Uniform Limited Partnership Act. The general partners have unlimited personal liabilities for business debts and obligations. In contrast, limited partners limited liabilities tied to their capital contributions. Per GS § 55D-20(3), an LP’s name must have the words “limited partnership,” abbreviated as “L.P.” or “LP,” or the combination “ltd. partnership.” An LP can be terminated based on the death or withdrawal of a general partner. To form an LP, an Application for Registration of a Limited Liability Partnership (LP-01) form must be filed with the SOS. The filing fee is $50.
- Registered Limited Liability Partnership (LLP): This is a type of partnership where every partner has unlimited personal liabilities for the general obligation of the business. Per GS § 55D-20(5), a registered LLP’s name must have the words “registered limited liability partnership” or “limited liability partnership” or abbreviated as “L.L.P.,” “R.L.L.P.,” “LLP,” or “RLLP.” Individuals who want to form an LLP in North Carolina must file a Certificate of Domestic Limited Partnership, including Optional Application as RLLLP (LLP-01) with the SOS (G.S. 59-84.2). The filing fee is $125. The SOS requires all LPPs to submit annual reports on the 15th day of the 4th month of the fiscal year. Online submissions of this annual report cost $203, and paper submissions cost $200.
- Limited Liability Limited Partnerships (LLLP): An LLLP is just an ordinary limited partnership that elects to become an LLLP in compliance with the provisions of G.S. § 59-210. Per GS § 55D-20(4), an LLLP’s name must have the words “registered limited liability limited partnership” or “limited liability limited partnership” or abbreviated as “L.L.L.P.,” “R.L.L.L.P.,” “LLLP,” or “RLLLP.” All LLLPs are required to file a Certificate of Registration (LP-01) with the SOS. The filing fee is $125
How to Start a Nonprofit in North Carolina
Per North Carolina Nonprofit Corporation Act, a nonprofit corporation is an entity with no income or has income that is not distributable to its members, directors, or officers. It also includes all associations without capital stock.
A nonprofit corporation is a business entity controlled by its members and managed by an elected board of directors. Nonprofit corporation members are not personally liable for the organization’s acts, debts, liabilities, or obligations. Generally, nonprofit organizations are not subject to income taxes. All nonprofit corporations in NC are required to be registered with the SOS. They must file an Articles of Incorporation (N-01) with the SOS for $60
Step 6: Choosing a Business Location
According to the U.S. Small Business Administration (SBA), a business location determines the regulations, state and local taxes, and zoning laws a business will be subject to. Therefore, founders should do due diligence in ensuring their businesses are situated in the best location. The target market should be a key factor in determining a business location. Also, certain items cost more or less depending on the business location. For example, the cost of property values, business insurance rates, rental rates, standard salaries, utilities, licenses, and fees may vary depending on where a business is located. Some business locations might be more prone to incentives than others. For example, the federal government has a Historically Underutilized Business Zones (HUBZone) program tailored towards small businesses in underutilized areas in North Carolina.
How Do I Start A Small Business From Home in North Carolina
Anyone who wants to start a small business from home must have a zoning certification issued consistent with the standards of the Unified Development Ordinance of the county where the home is located. All home-based businesses must meet the following requirements:
- Some counties allow one or two non-residents to be engaged in the home occupation
- The home occupation should not exceed 500/750 square feet or 25% of the dwelling’s gross floor area (whichever is greater).
- Only one vehicle not exceeding 14 feet in height can be parked in the home occupation premises. Bus, Dump trucks, tractor-trailers, tankers, vans, wreckers, or other vehicles over 6,000 lbs are not permitted.
- No display of products should be visible from the street.
- No external alterations inconsistent with the residential use of the dwelling are allowed.
- The operation of the home occupation should not cause any offensive noise, glare, smoke, dust, heat, odor, glare, vibrations, traffic hazard, or congestion or adversely affect the surrounding properties.
All home occupations in North Carolina must obtain permits from the Development Services Center in the county where the dwelling is located. For example, individuals seeking to start a home-based business in the City of High Point must Complete a Zoning Home Occupation Permit Application (PDF) online through the Accela Citizen Access (ACA) or in person at the Development Services Center. Applications must be submitted alongside the required fees. The Center is open daily from 8 a.m. – 4 p.m. and located at:
City of High Point Department of Planning & Development
211 S Hamilton Street
High Point, NC 27261
Phone: (336) 883-3328
Fax: (336) 883-3056
What Kind of Business Can I Run From Home in North Carolina?
Businesses run from home in North Carolina are called home occupations. Each county has Unified Development Ordinances that spelts out the provisions of home occupations. A home occupation is a business conducted from a residential dwelling unit. Acceptable home occupations in North Carolina are:
- Writer or journalist
- Photography studios
- Artist’s fine arts studio
- Barber/beauty shops
- Computer services
- Consultant’s office
- Detective’s office
- Insurance agent
- Interior decorator
- Home electronics repair
- Lawn and garden services
- Martial arts instructor
- Massage therapist
- Message and errand service
- Real estate agent
- Stock or security brokers
- Swimming pool service
- Tax preparation service
- Telephone answering service
- The office or studio of a physician
- Building specialty trades and contractor’s office
- Cleaning and maintenance service office
- Floral service with no on-premise sales
- Crafts like pottery, jewelry, and quilting
- Engineer, architect, drafter, or surveyor office
- Food catering and preparation service for off-site consumption
- Furniture upholstery and interior antique restoration and repair
- Offices for building contractors and building specialty trades
- Doctor’s and lawyer’s offices limited to two (2) patients or clients at one time
- Internet and mail order business with no on-site delivery, storage, or shipping of goods
Businesses explicitly prohibited as a home occupation include:
- Auto or vehicle repair
- Automotive service
- Automotive detailing
- Body shop
- any retail business
- engine and mechanical repair/welding and machine shops
- Barber shops and beauty salons with more than one chair
- Funeral parlor and undertaking
- Adult businesses
- Clubs or drinking establishments
- Food vendors or restaurants
- Commercial bakeries
- Vehicle sales
- Veterinarian clinics
- Medical or dental clinics
- Animal hospitals or animal care facilities
- paint shops or painting of vehicles, trailers, or boats
- printing shops
Starting a Business Online in North Carolina
An online business is an enterprise where buying and selling of goods and services are negotiated and paid for online. If the online business is home-based, a permit must be obtained from the Development Services Center in the county where the dwelling is located. Also, some online businesses may be required to get business, professional, or privilege licenses from different occupational boards in North Carolina. Online businesses that are a corporation, partnerships, and limited liability companies (LLCs) must be registered with the North Carolina Secretary of State. Some businesses may have to apply for seller permits from the North Carolina Department of Revenue (NCDOR).
Step 7: Legal Requirements for Starting a Business in North Carolina
Individuals or entities that want to conduct business in North Carolina must meet the following requirements:
- If the business is a corporation, partnership, or limited liability company, it must be registered with the North Carolina Secretary of State
- A sole proprietorship conducting business under an assumed business name must file an assumed name certificate with the Register of Deeds Office in the county where the principal office is located.
- Some businesses must obtain necessary business licenses and permit from the appropriate agency before they can operate in North Carolina
- Some businesses may be required to apply for sales & Use Tax Number with the North Carolina Department of Revenue (NCDOR)
- Review the Unified Development Ordinances of the county where the business is located for additional requirements for businesses operating there.
How to Get an EIN Number in North Carolina
In North Carolina, a tax ID number is also called an Employer Identification Number (EIN). The Internal Revenue Service issues the EIN to NC businesses. EIN applications can be made online, by fax, or by mail. Fax and mail requests require submitting Form SS-4 to the appropriate fax number or mailing address:
(For US applications)
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935
(For applicants with no legal residence or place of business in the US)
Internal Revenue Service
Attn: EIN International Operation
Cincinnati, OH 45999
Fax: (855) 215-1627 (within the U.S.)
Fax: (304) 707-9471 (outside the U.S.)
Applicants outside the United States can obtain EIN by telephone at (267) 941-1099. All calls must be made Monday through Friday from 6 a.m. to 11 p.m. (Eastern Time).
How to Get a North Carolina Registered Agent
North Carolina law mandates all businesses in the state and out of state to have registered agents and registered offices. A registered agent is a person or entity that forwards any process, notice, or demand severed on them to the entity they represent. The registered agent must be located in NC, and the registered office must be where they conduct their business. Once a business owner decides on a registered agent, the name of the person or entity must be filed with the registration form filed with the
North Carolina Secretary of State, Business Registration Division. Like other states, NC allows business owners to be their own registered agents.
Patents, Trademarks, and Copyrights in North Carolina
Patents, trademarks, and copyrights are intellectual properties that give rights associated with intangible knowledge or concepts. A patent is a type of intellectual property that protects businesses’ inventions or discoveries. In contrast, A trademark protects any word, phrase, symbol, design, or combination of those items a business uses to identify goods made, sold, or distributed by them and distinguish them from those made, sold, or distributed by others. Similarly, a copyright protects original works of authorship expressed in any tangible medium like dramatic, literary, musical, and artistic works, including songs, poetry, movies, novels, computer software, and architecture.
The Secretary of State (SOS) only has legal authority to register trademarks used in North Carolina. Business owners can only register their trademarks with the United States Patent and Trademarks Office (USPTO) if the marks are used for businesses in multiple states. The North Carolina Trademark Registration Act prohibits the registration of a new trademark that is the same or similar to an existing one in the State. Therefore business owners are advised to perform searches to determine the availability of a trademark before registering one. Searches can be performed on any of the following databases:
- Trademark / Service Mark database
- Business Registration Division database
- USPTO Trademark Electronic Search System (“TESS”)
Applicants must submit three (3) complete, original, current specimens of the mark as it currently is being used on its goods or in the sale or advertising of its services (Per N.C.G.S. § 80-3) when applying for a trademark. To register a trademark in NC, a mail package containing an Application for Registration or Renewal of Trademark or Service Mark form, a $75 filing fee, and the three specimens should be mailed to:
NC Department of the Secretary of State
PO Box 29622,
Raleigh, NC 27626-0622
Patents and copyrights are registered at the federal level. Businesses can fill for patents online on the USPTO website. In contrast, copyrights are registered in the United States Copyright Office. Registration involves completing an application form, paying the required filing fees, and a nonreturnable copy or copies of the work to be registered. Applicants can register online or by mailing the required forms to the U.S. Copyright Office:
Library of Congress
101 Independence Avenue SE
Washington, DC 20559-6000
North Carolina Business Tax
The North Carolina Department of Revenue (NCDOR) is the primary agency responsible for administering state taxes. Unless specifically exempt by North Carolina law, all businesses in the state are subject to business taxes. The tax business owners pay depends on the business structure, type, and location. Common business taxes in North Carolina are:
- Withholding Tax
- Severance Tax
- Sales and Use Tax
- Motor Fuels Tax
- Partnership Tax
- Motor Carrier Tax
- Tobacco Products Tax
- Alcoholic Beverages Tax
- Privilege License Tax
- Property Tax
- Scrap Tire Disposal Tax
- Solid Waste Disposal Tax
- Unauthorized Substances Tax
- White Goods Disposal Tax
- Dry-Cleaning Solvent Tax
- Estates and Trusts Tax
- Conveyance Tax
- Mutual Burial Association Tax
- Installment Paper Dealer Tax
- Work Opportunity Tax Credit
- Unemployment Insurance Tax
- Insurance Gross Premiums Tax
- Corporate Income and Franchise Tax
- Certain Machinery and Equipment Tax
- Motor Vehicle Lease and Subscription Tax
Are Business Records Public in North Carolina?
The North Carolina Public Records Act allows for the release or dissemination of business records to the public. Therefore, individuals can request to view or obtain copies of business records online or in person at the North Carolina Secretary of State’s Office. However, not all information in a business record is available to the public. For example, social security numbers, banking information, driver’s license number, telephone number, and credit card information are redacted from the business records. Per GS § 132-1.2, trade secrets, as defined in G.S. 66-152(3), are confidential.