The steps involved with applying for a business license in North Carolina vary based on your type of business and specific location. However, the following is an overall outline.
Step 1: Register Your Entity and Name Your Business
Corporations, limited liability companies (LLCs) and limited partnerships must register their business with the North Carolina Secretary of State. Sole proprietors and partnerships are not required to register with the state. Regardless of the entity type, you will need the following details for your applications:
- Company name
- Company address
- Phone number
- Authorized individual’s name and contact information
To operate legally under any name other than your personal or registered one, you must file an Assumed Business Name form (commonly referred to as doing business as or DBA) with the North Carolina Secretary of State. This form must be filed with your local Register of Deeds and a $26 application fee must be paid. Once approved, the certificate does not expire or need to be renewed.
Step 2: Create an EIN
An EIN serves a crucial function in identifying business entities for tax-related issues. Think of it as the Social Security number of businesses. Companies can file tax returns and meet other tax-related obligations using this number.
Local and state authorities often require an EIN when applying for licenses and permits, making this part of the application process.
Gaining an EIN is essential. It provides a unique identifier for tax and legal purposes. Acquiring one from the IRS is relatively straightforward. You can apply online and be approved in seconds.
Step 3: Locate Required Licenses and Permits
Determining what licenses and permits are necessary may be the hardest part for any business. While most of the licenses and permits you need are on a county level, there are some state and federal ones you may need depending on your industry. You can also consult with the North Carolina Business License Information Center Small Business Advisor Team for further guidance.
Here are some of the common licenses and permits needed in North Carolina:
Don’t forget to consult with the municipality or county governments in your area regarding additional licenses or permits that might be needed. These could include zoning permits, signage permits, home occupancy licenses and restaurant licenses.
Step 4: Submit Applications and Pay Fees
Be familiar with the application process and requirements, including the documentation needed for each license application. Each license may have unique needs, such as business plans, permits, financial statements or background checks.
Also, keep an eye out for fees associated with applying for licenses. These vary depending on the license type and your business’s location. Make sure to factor this cost into your budget. Start applying well ahead of schedule to allow time for delays. Certain licenses take longer to process than others, so it pays to plan ahead.
Step 5: Renew and Comply
To maintain the validity of your business license, ensure renewal dates and compliance requirements are regularly kept track of and met. It’s key to understand your license’s renewal process. Some licenses require annual renewals while others may be good for multiple years.
Failing to do so on time could incur penalties or result in suspension of operations. After you obtain a license, ensure your activities adhere to all relevant regulations and laws, regularly reviewing them to ensure ongoing compliance.
