Legal Services for Business
Start-Ups in North Carolina

The legal requirements and permits will differ depending on how heavily regulated your industry is. North Carolina doesn’t require a general business license at the state level, but local licenses may be required as well as industry or occupation specific licenses.

Other general requirements may include:

• Selecting your business entity, name and registering with the state.
• Drafting and signing all business formation documents
• Obtaining an Employer Identification Number
• Complying with the FinCEN BOI reporting
• Federal and State tax selections and requirements
• Employment obligations if you have employees
• Ensuring Privacy and Intellectual property protections are in place
• Environmental permits (industry specific)
• Insurance that meets the needs of your business
• Health and safety regulations (industry specific)

A solid business plan should address key elements which help you safeguard your business against legal risks, and aid in exceeding your business mission, and vision.

1. Business Structure and Ownership
2. Regulatory and Compliance Requirements
3. Intellectual Property
4. Contracts and Agreements
5. Risk Management and Insurance
6. Employment and Labor Issues
7. Financial and Tax Considerations
8. Corporate Governance
9. Legal Compliance and Updates
10. Contingency Plans

Depending on your business and industry there could be additional agreements needed. To start you’ll need to consider:

• All foundational business formation documents
• Employment Agreements
• Master service agreements, consulting agreements or other client contracts
• Supplier and vendor agreements
• Lease agreements for any space needed outside your home
• Intellectual property agreements
• Trademark paperwork and documents if you opt to trademark your name or logo
• Non-disclosure and confidentiality agreements.

Engaging with counsel with experience in your industry is crucial to ensure your contracts not only meet legal requirements but strategically help move your business forward. Keep in mind you’ll want to review the documents and check for updated language in the law on a regular basis.

There is a ton to consider when dealing with employees. The laws change quickly and some can be very complex and fact intensive. You’ll want to have at least a general understanding of the following, and contact an employment attorney to seek additional guidance when things become questionable.

• Understand federal and state employment laws
• Employee classifications
• Employment policies and best practices in employee management
• Recruitment and Hiring practices, laws and regulations
• Compensation and benefit requirements
• Workplace safety
• Record keeping requirements
• Termination and remedial action best practices and laws.

When managing your business’s tax obligations, it’s important to consider how your business structure affects your taxes. For sole proprietorships, you’ll report profits on your personal tax return using Schedule C and pay self-employment tax on net earnings. Partnerships pass profits and losses through to partners, who report them on their personal tax returns, while the partnership files an informational return (Form 1065). Limited Liability Companies (LLCs) can choose to be taxed as sole proprietorships, partnerships, or corporations, depending on their structure. Corporations are taxed separately from their owners, with corporate tax returns filed, and shareholders report dividends on their personal returns.

Federal income tax obligations include making quarterly estimated tax payments if you expect to owe $1,000 or more in taxes, covering income and self-employment taxes. Business owners can typically deduct ordinary and necessary business expenses, like rent, utilities, and salaries, to determine taxable income. State and local taxes also play a role; depending on your state, you may need to pay state income tax on your business income, collect and remit sales tax, and pay property taxes on real and personal property used in your business.

Employment taxes are another key consideration. You’ll need to withhold Social Security and Medicare taxes (FICA) from employees’ wages and match these contributions as an employer. Additionally, you must pay federal unemployment taxes (FUTA) and comply with state-specific unemployment tax requirements. Keeping accurate and detailed records of all financial transactions is crucial for compliance. It’s recommended to retain tax records for at least three years from filing your return or two years from paying the tax, whichever is later.

Not all of these may apply to your specific circumstances, but some more frequent benefits and incentives include:

1. Tax Deductions for every day business expenses and costs specific to starting your business.
2. Tax Credits for Research and Development or Work Opportunity.
3. Retirement Plans Contributions
4. Health Insurance Premiums
5. Home Office Deduction
6. Education and Training Costs