The Ultimate North Carolina Business Startup Checklist
- Ruby Castellanos
- Mar 21
- 5 min read
Welcome to CATALYSTA's comprehensive guide for first-time business owners in North Carolina! Embarking on the journey of entrepreneurship can be both exciting and daunting. This guide aims to provide you with a clear roadmap to navigate the essential steps in starting your own business in the Tar Heel State.
Business Formation
Choosing a Business Structure
Before officially opening your business, it's crucial to decide on a business structure. Here are the most common types:
Sole Proprietorship: Ideal for small, low-risk businesses. It's easy to set up but offers no personal liability protection.
Partnership: Suitable for businesses owned by two or more individuals. A partnership agreement is recommended to outline roles and responsibilities.
Limited Liability Company (LLC): Offers personal liability protection and is flexible in management. It's popular among small business owners.
Corporation: Best for businesses with a high level of risk or those planning to raise capital through investors. Provides strong liability protection but is more complex to manage.
Registering Your Business
Choose a Business Name: Ensure your desired name is unique and adheres to North Carolina's naming requirements.
Register with the Secretary of State: Depending on your business structure, you'll need to file the appropriate documents, such as Articles of Organization for an LLC.
Obtain Necessary Permits and Licenses: Check local regulations for any specific permits or licenses required for your industry.
Doing Business As (DBA) Name (Assumed Name)
A DBA (assumed name) is needed if you operate under a name different from your legal business name.
Who Needs One?
Sole proprietors using a business name other than their own.
Businesses wanting to use multiple trade names.
Businesses required by their bank to have one.
Why? Allows you to use a trade name, and is often needed for bank accounts.
How?
Check your county's Register of Deeds for their specific forms and fees.
File the "Certificate of Assumed Name" with that office.
Some counties require you to publish notice in a local paper.
Note: A DBA does not offer the liability protection of an LLC or corporation.
Employer Identification Number (EIN)
An EIN, also known as a Federal Tax Identification Number, is essential for tax purposes. Here's how to obtain one:
Online Application: Visit the IRS website and complete the EIN application form. It's free and takes only a few minutes.
Phone or Mail: Alternatively, you can apply by calling the IRS or submitting a form via mail, but these methods may take longer.
Business Bank Accounts
Separating personal finances from business finances is crucial for effective financial management. Here's what to do:
Choose a Bank: Research different banks to find one that offers favorable terms for business accounts.
Open a Business Checking Account: Provide your EIN, business formation documents, and personal identification.
Consider Additional Accounts: Depending on your needs, you may open a savings account, credit card, or merchant services account for processing payments.
Nerdwallet: Best Banks for Small Business Owners In NC March 2025
The Online Business Bank I use is Novo
Bookkeeping Software
Efficient bookkeeping is vital for tracking income, expenses, and ensuring compliance with tax laws. Consider the following options:
QuickBooks: Popular for its comprehensive features tailored to small businesses.
Xero: Known for its user-friendly interface and cloud-based solutions.
FreshBooks: Ideal for service-based businesses with strong invoicing capabilities.
Wave Financial: Wave offers free accounting, invoicing, and payment tools, ideal for freelancers, consultants, and other service-based small business owners. Benefits include easy expense tracking, professional invoices, and streamlined payment processing, saving time and improving financial clarity.
Legal and Tax Requirements
Sales Tax Permit: If you're selling goods, apply for a Sales and Use Tax Permit through the North Carolina Department of Revenue.
State and Local Taxes: Be aware of state income tax and any applicable local taxes.
Hiring Employees
Register for Unemployment Insurance Tax: If you plan to hire employees, register with the North Carolina Division of Employment Security.
Workers’ Compensation Insurance: Required if you have employees, to cover workplace injuries.
Business Insurance
Protect your business with appropriate insurance policies, such as:
General Liability Insurance: Covers thirdparty claims.
Professional Liability Insurance: Protects against claims of professional negligence.
Property Insurance: Safeguards against damage to your business property.
Understanding Tax Exemption Certificates for Resale
When starting a business in North Carolina, especially if you plan to purchase goods for resale, understanding tax exemption certificates is essential.
What is a Tax Exemption Certificate for Resale?
A tax exemption certificate for resale, often referred to as a resale certificate, allows businesses to purchase goods for resale without paying sales tax at the time of purchase. This is because sales tax will be collected from the customers when the goods are sold.
Who Needs One?
Retailers and wholesalers purchasing inventory for resale.
Businesses engaged in reselling tangible personal property.
How to Obtain a Resale Certificate:
1. Register for a Sales Tax Permit:
Before you can issue a resale certificate, you must have a valid Sales and Use Tax Permit from the North Carolina Department of Revenue.
2. Apply for the Resale Certificate:
Once you have a sales tax permit, you can issue a resale certificate to your suppliers when purchasing goods for resale.
3. Provide Necessary Information:
Typically, you need to include your business name, address, and sales tax permit number on the certificate.
4. Keep Records:
Maintain detailed records of all resale certificates issued and received to ensure compliance and for tax reporting purposes.
Benefits of Using a Resale Certificate:
Cost Savings: Avoid paying sales tax on inventory purchases, improving cash flow.
Compliance: Ensures your business adheres to state tax laws, reducing the risk of audits and penalties.
Important Considerations:
Resale certificates are only valid for purchases intended for resale. Using them for other purposes can lead to fines and penalties.
Regularly review the North Carolina Department of Revenue's guidelines to stay updated on any changes in the regulations.
With a clear understanding and proper use of tax exemption certificates for resale, your business can effectively manage tax obligations and focus on growth.
Marketing and Sales
Develop a marketing plan and sales strategy.
Create a business plan.
Establish an Online Presence: In today's digital age, a professional website is essential. It serves as your online storefront and builds credibility.
Website Design and Development: CATALYSTA offers affordable website design and development services tailored to small business needs. We can help you create a website that showcases your brand and attracts customers.
Virtual Support Services: To help you manage your online presence, CATALYSTA also offers virtual support services, including website maintenance, social media management, and business consultation.
Checklist for New Business Owners
Choose a business structure
Register your business name
File a DBA (if applicable)
Obtain an EIN
Open a business bank account
Select bookkeeping software
Apply for necessary permits and licenses
Understand state and local tax obligations
Consider hiring employees and related requirements
Purchase business insurance
Check if you qualify for a resale certificate
Create a basic business plan.
Create a marketing plan.
Build a professional website.
With these steps and resources, you're well on your way to launching a successful business in North Carolina. Embrace the entrepreneurial spirit, and let CATALYSTA be your guide and support throughout this exciting journey!
Great Business Owner Resources:
Want to learn more about how CATALYSTA can help your business? Check out our website!
Comments