Raleigh Start-Up Lawyer Providing Legal Services and Guidance for New Start-Ups in North Carolina

Many factors determine whether a business will be successful and have longevity, or whether that business may end up failing within the first few years of existence. One of those factors is whether the business owner chose the right way to structure their business or not. Our firm helps start-ups set themselves up for success by giving them the right advice and helping them understand potential risks and financial or tax implications that are key for their business formation. Here are a few important answers about start-ups in North Carolina.

What Type of Business Structures Are There in North Carolina?

Like in many other states in the country, individuals or partners looking to start a business have a few different business structures to choose from in North Carolina. The simplest one of them is a sole proprietorship because it does not require any paperwork to be submitted to the Secretary of State or the IRS (with the exception of a business license when required). However, it does not offer any type of protection of your personal assets, as your business debt and your personal debt are considered to be the same thing. This also applies to a partnership, which is the same as a sole proprietorship – but you are doing business together with your partner(s).

Other possible business structures that are more complex but offer different levels of liability protection are limited liability partnerships (LLPs), Corporations (which can be S-Corps or C-Corps), Limited Liability Companies (LLCs), and Professional Limited Liability Companies (PLLCs). An attorney can help guide you in choosing the right structure for your business.

What Is the Importance of Choosing the Right Business Structure for My Start-Up?

Some of the key factors affected by the type of business structure you choose are legal and financial liability, taxation, and decision-making authority. Some business structures exist separately from their owners or partners and are taxed separately, which provides some protection for the owner’s personal assets in case the business accrues too much debt or is the target of a potentially damaging lawsuit.

As far as taxes, businesses such as a sole proprietorship, file their taxes together with the owner’s personal income taxes. Others, such as C-Corps, file separately but are required to pay taxes whenever they make a profit, and shareholders may also have to pay taxes on any dividends they receive from the corporation. Finally, some business structures allow for more clarity as far as who makes what type of decisions, and how disputes will be handled.

Can an Attorney Help With Contracts and Other Start-up Documents?

Depending on the business structure you choose and on the nature of your business (professional, construction, personal services, etc.), you may need to prepare several documents as part of opening your start-up. In addition, you may need to enter contracts with many different parties – from vendors to landlords, independent contractors, employees, and more.

An attorney can play an essential role in drafting those contracts and documents on your behalf, making sure they are written properly and that it is enforceable. Your attorney can also review contracts brought to you by other parties to ensure it has favorable terms. Whenever you need to sign or draft a contract, it is best not to take any action and let an attorney review it first.

Why Should I See an Attorney When Starting a Business?

Whether you have an idea for a business and need to know if it is feasible, or you have already taken steps to start a new business in North Carolina, there is never a bad time to see a start-up attorney. At Davis Legal, PLLC, we can offer invaluable advice for any stage of your business. You can rely on our legal knowledge and on everything we’ve learned while helping countless other entrepreneurs build their dreams to set up your business for success. Contact our office in Raleigh at 919-756-6437 and request an initial consultation to talk about your business and see how we can help you.