How to Incorporate in North Carolina

Entity Types at a Glance

North Carolina overlays several corporate flavors on top of the Business Corporation Act (Chapter 55). This menu orients you before diving into detail pages.

Authority snapshot: Chapter 55 (NC Business Corporation Act), Chapter 55B (Professional Corporations), Chapter 55D Articles 2 & 5 (naming and registered agents), Article 18 for Benefit Corporations, and NC Revenue statutes in Chapter 105 for franchise/income tax.

Entity	Statutes	Typical use case	Notes
Standard NC business corporation (C-corp)	Chapter 55	Manufacturing, tech, holding companies that want classic stock structure.	Subject to 2.5% corporate income tax + franchise tax; Articles filed on Form B-01.
S-corporation	Chapter 55 + IRS/NC Dept. of Revenue elections	Owner-operated professional or service firms seeking payroll tax optimization.	Still a Chapter 55 corporation; pays $200 franchise tax minimum, limited shareholders/classes.
Professional corporation (PC)	Chapter 55B + Chapter 55	Law, medicine, engineering, accounting, architecture, and other licensed practices.	Ownership/officers limited to licensees; naming rules require "Professional Corporation", "P.A.", or "P.C."
Medical corporation	Chapter 55B + medical board rules	Physician and dental groups that must file with NC Medical Board.	Requires board certification, malpractice insurance attestation, and shareholder licensing.
Benefit corporation	Chapter 55, Article 18	Social enterprises and ESG-focused companies wanting statutory public benefit duties.	Articles must declare benefit status; annual benefit report referencing third-party standard.
Foreign corporation authorized in NC	Chapter 55, Article 15	Delaware/Wyoming/other state corporations operating in NC.	File Application for Certificate of Authority (Form B-09) + franchise tax on NC capital.

Standard North Carolina Corporation (C-Corp)

The Chapter 55 corporation is the foundation for every variant. Formation happens via Articles of Incorporation filed with the Secretary of State’s Business Registration Division.

Key fields on Form B-01

Name & Registered Agent

Name must include Corporation, Incorporated, Company, Limited (or abbreviation) and be distinguishable on SOS records. Registered agent must provide a physical NC address and sign the consent in the Articles.

Authorized shares

List authorized shares and any classes/series. NC doesn’t require par value, but franchise tax uses apportioned capital stock value, so align share counts with capitalization plans.

Incorporators & principal office

Include at least one incorporator with address. Principal office info can be omitted initially but is needed for annual reports. Provide email for SOS notices.

Optional provisions

Use Article 2 to address indemnification, director liability waivers (consistent with Chapter 55-2-02(b)), pre-emptive rights, and cumulative voting modifications.

Fees & processing

Filing	Fee	Notes
Articles of Incorporation (B-01)	$125	Online or paper; include cover sheet; typical processing 5–7 business days.
24-hour expedite	$100	Attach Expedited Service Request. Clock starts when SOS accepts filing.
Same-day expedite	$200	Submit before noon Eastern for 4 p.m. decision.

Share structure tips: Early-stage founders often authorize 10–20 million no-par shares to mimic Delaware setups. Balance that flexibility against higher franchise tax bases—NC uses total capital stock, surplus, and undivided profits when computing the tax.

S-Corporations & North Carolina Tax Treatment

An S-corp in NC is still a Chapter 55 corporation. The difference lies in federal and state tax elections (IRS Form 2553 + NC Form CD-401S). NC recognizes the S election but still charges franchise tax.

Entity requirements

100 or fewer shareholders, one class of stock, shareholders limited to U.S. persons/qualifying trusts, and calendar-year default unless permission granted.

NC taxation

S-corps generally pay no 2.5% corporate income tax; profits flow to shareholders taxed at 4.75% individual rate. However, each S-corp owes at least $200 in franchise tax annually.

Payroll & PTET

Owners must take reasonable salaries subject to payroll tax. Consider North Carolina’s Pass-Through Entity Tax election (Form CD-429) for SALT deduction planning.

C vs S vs LLC snapshot

Feature	C-Corp	S-Corp	LLC (partnership)
NC entity-level tax	2.5% income tax + franchise tax (≥$200)	$200 min franchise tax; no income tax	None
Equity flexibility	Multiple classes, preferred stock, QSBS potential	Single class of stock	Membership units; flexible allocations but harder for VC
Investor expectations	Standard for VC and institutional capital	Acceptable for closely held, service-heavy firms	Great for pass-through real estate/services
Payroll/SE tax	Officer salaries subject to payroll tax; dividends taxed twice	Owner salaries subject to payroll tax; distributions avoid SE tax	Members pay SE tax on active income

Worked example: A consulting corporation nets $400,000. As a C-corp, it owes 2.5% income tax ($10,000) plus franchise tax based on capital stock (minimum $200) before dividends trigger shareholder tax. As an S-corp with $240,000 of reasonable wage, payroll tax hits wages but remaining $160,000 passes through with only individual income tax and franchise minimum.

Professional & Medical Corporations

Chapter 55B overlays licensing rules for professional corporations (P.A./P.C.). Each board (NC State Bar, Medical Board, Board of Architecture, etc.) issues its own approval processes.

Ownership restrictions

Shareholders, officers, and directors must generally hold licenses in the profession. Boards may allow minority passive ownership for estate planning only if expressly permitted.

Naming rules

Include “Professional Association,” “Professional Corporation,” “P.A.,” or “P.C.” Certain boards require principal surname(s) in the name and will reject brand names without approval.

Board filings

Obtain a Certificate of Registration or similar letter from the relevant board before filing Articles. Attach that certificate to Form B-01. Annual renewals may be required with both the SOS and the board.

Medical corporations submit forms to the NC Medical Board confirming professional liability insurance, shareholder licensure, and compliance with NC Gen. Stat. § 55B-14. If you operate across states, coordinate PLLC/PC structures to keep each jurisdiction satisfied.

Benefit Corporations

North Carolina allows corporations to elect “benefit corporation” status under Chapter 55, Article 18. This is optional but useful for impact funds and ESG-aligned ventures.

Articles must state that the entity is a benefit corporation and commit to pursuing a general public benefit.
Directors must consider effects on shareholders, employees, customers, community, and the environment when making decisions.
Annual benefit reports must use an independent third-party standard; provide the report to shareholders and post it on your website if feasible.
Converting into or out of benefit status requires at least two-thirds shareholder approval (unless bylaws/articles demand more).

Investor note: Benefit status doesn’t exempt you from franchise or income tax. It’s a governance signal—pair it with clear shareholder agreements to avoid misunderstandings about profit vs. mission.

Close Corporations & Shareholder Agreements

NC permits statutory close corporations (Articles referencing Chapter 55-7-30 et seq.) and, more commonly, nonstatutory close corporations that rely on shareholder agreements.

Key features

Limited number of shareholders, restrictions on share transfers, ability to dispense with a board, and partnership-style governance where shareholders assume direct management.

Why it matters

Close corp language can prevent minority freeze-outs, document buy-sell mechanics, and pre-plan dispute resolution. NC law enforces these agreements if they’re in writing and referenced in the Articles or stock certificates.

Sample restriction (conceptual): “No shareholder may transfer shares without first offering them to the corporation and remaining shareholders at appraised value. Disputes over valuation go to binding appraisal by a mutually selected CPA.” Tailor triggers for death, disability, divorce, or bankruptcy.

Formation Checklist & Filings

Regardless of corporation type, work through this timeline.

Step 1 · Entity name

Search the NC SOS database. Reserve for 120 days using Application to Reserve a Business Entity Name ($30) if brand launch is months away.

Step 2 · Registered agent

Secure an NC physical address. Agents can be individuals or businesses authorized in NC. Prepare consent signature.

Step 3 · Draft Articles

Choose share structure, management notes, optional provisions, and attach board approvals (for PCs/benefit conversions). File Form B-01 with fee.

Step 4 · Organizational meeting

Adopt bylaws, appoint directors/officers, issue stock, approve banking resolutions, and authorize EIN application.

Step 5 · Tax registrations

Apply for EIN, register with NC Dept. of Revenue (Form NC-BR) for withholding/sales/franchise, and enroll with NC Division of Employment Security for unemployment.

Step 6 · Compliance setup

Calendar annual report (April 15), franchise and income tax deadlines, CTA filings, and license renewals.

Naming Rules & Registered Agents

Corporate names

Must include Corporation, Company, Incorporated, Limited or abbreviation (Corp., Co., Inc., Ltd.).
Cannot imply banking, insurance, trust, or professional licensing without regulator approval (Commissioner of Banks, Department of Insurance, etc.).
Must be distinguishable on the records; punctuation or article changes alone don’t suffice.
Professional corporations must meet board-specific naming rules; many require surnames plus professional designator.

Registered agent requirements

Maintain a registered office at a North Carolina street address.
Agent may be an NC resident, domestic entity, or foreign entity authorized to do business in NC.
Change agent via Form BE-06 ($5 mail, free online). Failure to maintain agent triggers administrative dissolution after notice period.

Tip: Pair your agent updates with CTA beneficial ownership updates when leadership changes. NC annual reports do not automatically update registered office information in all cases.

Annual Reports & Franchise Tax

North Carolina requires every domestic and foreign corporation to file an annual report by the 15th day of the fourth month following fiscal year end (April 15 for calendar-year corps).

Annual report basics

File online for $23 (or $25 by mail).
Report principal office addresses, registered agent, officers, and authorized shares.
Align the report with franchise/income tax filings—late reports can cause the Secretary of State to administratively dissolve/withdraw the corporation.

Franchise tax overview

Taxpayer	Rate/base	Minimum	Notes
C-Corp	$1.50 per $1,000 of the largest of: (1) apportioned capital stock, surplus, and undivided profits; (2) 55% of appraised property value in NC; or (3) investment in NC tangible property.	$200	File with corporate income tax return (Form CD-405). Credits offset limited portions.
S-Corp	Same base and rate	$200	Paid with Form CD-401S regardless of income.
Holding companies	Subject to same regime unless qualifying for specialized exemptions.	$200	Consider share structure and paid-in capital to minimize base.

Penalty risk: Missing the franchise tax payment triggers late-payment penalties (10% of tax due, minimum $5) plus interest and can jeopardize good standing. Reinstatement requires all delinquent reports, tax returns, penalties, and a $100 reinstatement fee.

North Carolina Corporate Tax Comparison

Use this comparison when deciding between an NC C-corp, S-corp, or keeping an NC LLC taxed as a partnership.

Scenario	Entity-level NC tax	Owner-level NC tax	Ideal for
NC C-corp with $1M net income	$25,000 income tax + franchise tax on base (≥$200)	4.75% on dividends to individuals	VC-backed or QSBS-focused companies reinvesting profits
NC S-corp with $1M net (after salaries)	$200 franchise minimum	Shareholders pay 4.75% on pass-through income; payroll taxes on salaries	Mature services firms paying consistent distributions
NC LLC taxed as partnership	None	Members pay 4.75% and self-employment tax if active	Real estate, consulting, and holding companies valuing flexibility

NC offers the Pass-Through Entity Tax (PTET) election for S-corps and partnerships through 2025, allowing a 4.75% entity-level tax with owner credits to bypass SALT deduction caps. Layer this with payroll strategy when modeling S-corp wages.

Foreign Corporations Doing Business in NC

Corporations formed elsewhere must obtain authority before “transacting business” in North Carolina (maintaining an office, employees, inventory, or significant projects).

File Application for Certificate of Authority (Form B-09) with $250 fee.
Attach a Certificate of Existence from the home jurisdiction dated within 6 months.
Appoint NC registered agent and list principal office / officers.
File annual reports ($23) and pay NC franchise tax on NC-apportioned capital.

Common mistakes: Waiting until after hiring employees to qualify (risking penalties), misallocating capital stock for franchise calculations, and forgetting to update assumed names when expanding into new NC counties.

Corporate Transparency Act Overlay

As of 2024, most NC corporations are “reporting companies” under the Corporate Transparency Act unless they fall into an exemption (large operating company, SEC reporting issuer, bank, etc.).

Corporations formed before Jan 1, 2024 must file BOI by Jan 1, 2025.
Corporations formed in 2024 get 90 days from formation to file; in 2025 the window drops to 30 days.
List each beneficial owner (25%+ ownership or substantial control) and company applicants for new entities.
Litigation challenging CTA doesn’t protect NC filers unless they are named plaintiffs—plan to comply.

I bundle BOI data collection with my engagement letters so incorporators, directors, and shareholders stay aligned on privacy and update triggers.

When to Choose an NC Corporation vs LLC or Delaware

Stay in North Carolina when…

Your management team, facilities, or professional licenses center in NC.
You need a professional corporation subject to NC board oversight.
You want to avoid Delaware franchise tax and annual registered agent double fees.

Go Delaware (then foreign-qualify) when…

Venture capital requires Delaware law and standard NVCA documents.
You plan to issue multiple preferred classes, SAFEs, or complex option pools.
You need series structures or plan to reincorporate before an exit.

Either way we harmonize the compliance calendar: Delaware franchise tax (March), NC annual report/franchise tax (April), CTA deadlines, and board/industry renewals.

How I Help with North Carolina Corporations

Entity choice consults comparing NC LLC vs NC corporation vs Delaware parent + NC qualification.
Drafting Articles of Incorporation, benefit language, professional corporation approvals, and bylaws.
Designing shareholder agreements, close corporation structures, and buy-sell mechanics.
Tax coordination: S-election modeling, PTET strategy, franchise tax base planning, and reinstatement support.
Foreign qualification packages for Delaware/Wyoming corporations opening NC offices.
CTA / BOI compliance programs aligned with shareholder onboarding.

Need this tailored to your deal? Drop the page into your workspace or schedule a consult and I’ll map filings, budgets, and governance documents.