Click on link below to view an answer
to your question:
* How do I choose a name for my business?
* Do I have to register my business name?
* What factors should be considered in choosing the type of business form for my business?
* What are the benefits of starting my own business?
* What are the risks of starting my own business?
* How do I determine whether my business will make money?
* What are the different types of business forms to choose from?
* What is a partnership and how do I form one?
* Are there special rules for partnerships?
* Is a written partnership agreement necessary for all partnerships?
FAQ's:
How do I choose a name for my business?
ANSWER: Generally, North Carolina law requires
that the name of a business entity be distinguishable from
other entities currently transacting business or conducting
affairs within the state. You may apply, however, to use
a name already existing within the records of the Secretary
of State's office if 1) the other party who has previously
reserved or registered the name consents in writing to your
using the name and submits a form to change its own name
upon the Secretary's records or 2) you deliver a certified
copy of the final judgment of a court which establishes
your right to use the name to the Secretary of State's office.
Also, the type of structure you choose to run your business
will affect the name of the business. For example, the name
of a corporation must contain the word incorporated, corporation,
or similar abbreviations, whereas a limited liability company's
name must include limited liability company,LLC, etc.
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Do I have to register my business name?
ANSWER: Yes. Your business name must be
registered with the office of the Secretary of State of
North Carolina and it must be distinguishable from other
existing business names. Once registered, the name is reserved
for your exclusive use until the end of the year in which
it became effective. After getting the name registered,
an entity may renew it yearly. After your business name
becomes effective, the entity becomes authorized to transact
business or conduct affairs within the state of North Carolina.
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What factors should be considered in choosing
the type of business form for my business?
ANSWER: Although there are many important
things to think about when choosing a business form, some
of the main considerations include your preference of tax
treatment, your plan to capitalize the business, whether
you plan to issue stock and trade it publicly, how you plan
to structure the management of your business, and issues
surrounding the liability of the business owners, among
other things.
It is very important to plan your business and to work
closely with someone who can help you choose the business
form that will meet your needs.
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What are the benefits of starting my own business?
ANSWER: Starting your own business will
give you a great amount of flexibility. Being your own boss
allows you to structure your working hours as well as your
workload however you see fit. Running your own business
also grants you flexibility in structuring the way in which
the entity will be taxed for federal income tax purposes.
Corporations, sole proprietorships and partnerships receive
different tax treatment under federal law. Depending on
the type of tax treatment you wish to enjoy, your business
can be structured accordingly.
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What are the risks of starting my own business?
ANSWER: Along with the flexibility of starting
your own business comes a great deal of responsibility.
Operating a business requires money, therefore, you may
be required to take out personal loans in order to capitalize
your new business. Also, owning a business of your own can
subject you to a great amount of liability. For example,
you may be responsible for tortious acts committed by your
employees while they are working within the course and scope
of their employment for you. Also, running a sole proprietorship
or being the general partner in a general partnership can
subject you to an unlimited amount of liability for any
business losses.
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How do I determine whether my business will
make money?
ANSWER: The first step is to do research
to determine whether the existing market has a need for
your service or product at the current time. If so, it is
also important to consider whether and if consumers can
support your business by spending money on your product
or service. Lastly, consider whether you have enough money
or financing to run your business effectively, without subjecting
yourself and others to bankruptcy if the proposed business
does not work out as planned.
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What are the different types of business forms
to choose from?
ANSWER: There are several business types
to choose from, including sole proprietorship, general partnership,
limited liability partnership, professional association,
limited liability company, corporation and non-profit corporation.
Each of these forms is structured in different ways which
provide a business owner with different benefits and obligations.
It is important to work closely with someone who can help
you choose the business form that will meet your specific
needs.
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What is a partnership and how do I form one?
ANSWER: A partnership is a business owned
by two or more people that has not filed papers to become
a corporation or a limited liability company (LLC). You
do not have to complete any paperwork to create your partnership
-- the arrangement begins as soon as you start a business
with another person.
Although the law does not require it, many partners work
out the details of how they will manage their business in
a written partnership agreement. If you do not create a
written agreement, the partnership laws of your state will
govern your partnership.
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Are there special rules for partnerships?
ANSWER: Generally, the affairs of a partnership
are governed by Articles 2 and 3 of Chapter 59 of the North
Carolina General Statutes (Revised Uniform Partnership Act
- RUPA). These rules are only default provisions, however,
and only apply if the partnership has not set out its own
governing rules. Partners can dictate most aspects of their
partnership through their partnership agreement. This agreement
will then govern any disputes which arise during the tenure
of the partnership. In the event that a specific situation
arises which was not contemplated within the partnership
agreement, the default rules of the RUPA will govern the
situation.
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Is a written partnership agreement necessary
for all partnerships?
ANSWER: It is not a legal requirement to
have a written partnership agreement for a general partnership.
It is wise, though, to create a written agreement that sets
out the expectations for each of the partners. In the event
that there is no written agreement, the statutory laws of
the state will be used to govern the partnership.
