Sole Proprietorship in North Carolina: Do I Need to Register?

What kind of business structure you will employ is one of the initial choices you must make if you intend to launch a business in North Carolina. A sole proprietorship is frequently the easiest and most clear-cut choice for small business owners. However, you might be unsure about the necessity of filing your single proprietorship with the North Carolina Department of Commerce. Generally speaking, yes, although there are a few exceptions.

In North Carolina, there is no requirement to register with the state or file any paperwork if you are running a sole proprietorship under your own name. However, you must register with the North Carolina Secretary of State if you are doing business under a different name, also referred to as a “doing business as” or DBA name. Any company that operates under a name different than the owner’s legal name must comply with this.

You must also acquire the relevant permissions and licenses from the state if you intend to hire workers or sell items that are subject to sales tax. This can contain a sales tax permit, a state tax identification number, and any required professional licenses. The structure of your company and your personal preferences will determine if you need a different bank account for each DBA. To aid in administration and bookkeeping, some business owners decide to maintain separate bank accounts for each DBA. It is not mandated by law, though.

You can register more than one DBA as a sole proprietor, but each one needs to be done so separately with the state. There is a charge for each registration, which can be paid through the website of the North Carolina Secretary of State.

Finally, it’s critical to understand the distinction between an LLC and a DBA. An LLC is a distinct legal structure that provides liability protection for its owners, whereas a DBA is simply a name that a firm employs to conduct business. Despite being able to use a DBA, a single proprietorship does not provide the same amount of liability protection as an LLC or corporation.

In conclusion, you are not required to register with the state of North Carolina if you are running a single proprietorship under your own name. The state will need you to register your DBA if you are operating under a different name. Depending on the nature of your firm, you might also need to seek permissions and licenses. You may register more than one DBA, but each one needs to be done separately with the state. Finally, an LLC is a distinct legal entity that can offer protection for its owners, but a DBA offers no liability protection.