Second article in the “new business startup cycle” in no particular order: registering your business with your state’s Secretary of State. Even though forming a business is a multi-step process, not an event, there is no more exciting moment for new entrepreneurs than getting their “Congratulations” email from the N.C. Secretary of State when their business is finally registered.
Registering with your state’s SOS is a mandatory and integral part of starting a business. No other step has such importance. The registration cements the business name, address, registered agent. It gives the business owners the right to use that business name. It lets the world and the state know that *this* is your business and you’re ready to go. It’s a key part of establishing the business’ separate identity for liability protection of the owners.
Although it has this importance in the new business startup cycle, registering with the SOS is something I have my smaller clients to. In the old days (no I’m not going to bore you with 30 year old lawyer stories), one had to fill in a paper form and mail it in to the capitol, wait for it to be processed, then returned. If there were any problems with the form or name, one would have to start over.
Now, though, the Internet has improved the process to where it may take all of 20 minutes to get a registration on file and in process. It’s just not worth it for clients to pay me to do this – although I always give them step-by-step instructions on the proecess. Let’s go over the steps and the form.
Register an account with the SOS
First thing is to create an account with the SOS. The email you give them for that account is the primary way they will communicate with you about annual renewals and other important news. Next, you’ll do a name search to make sure the registered name of your business does not conflict with or cause confusion with already registered names.
Form and a Fee. Form and a Fee. Form and a Fee
One thing a lot of transactional lawyers like myself find out early on, is that many dealings with the state on behalf of a business can be solved by submitting the correct form, with the fee. Registering a business is the ultimate form and a fee process. Whether forming an LLC or a corporation, the initial form to do this is called “Articles.” Articles of Organization, for a limited liability company; and articles of incorporation, for a corporation.
The current fee in N.C. is $125 to submit the form. I never recommend expediting processing of the form – the people in Raleigh doing this are great and usually have the registration finalized within a few days.
What’s in the form for registering?
Both forms require the prospective business owner to submit essentially the same information. Business name – this is the formal, registered name of the business. It does not have to be the name under which the business operates to the public, though.
Registered agent name and address. The registered agent is the person that you authorize to accept “civil process” (lawsuits) on behalf of the business. It can be the business owner, or any person s/he delegates and who agrees to do this. The address has to be a real street address, so the Sheriff knows where to show up with the lawsuit. No P.O. boxes allowed.
Business address. If the business has an address, give that on the form; otherwise check the option that it does not have a business address. This is useful for work-at-home businesses which may not want the home address made public.
Effective date. Give the date you want the registration to be effective. Options are “upon filing” – that’s what I always recommend, let’s get it done; or some future date (which is used when the start date for the tax year is important).
Last, the name of the person filling out the form and submitting the registration. Technically called the “organizer” (LLC) or the “incorporator” (corporation), it’s a fancy name for the person filling in the blanks.
For more complicated registrations I always recommend speaking with myself because there are some options for registering that can get tricky. But for the simple, one person business, fill out the blanks and submit the fee and you should be good to go!
Conclusion on Registering with the Secretary of State
If you have any questions on this go ahead and contact me. Stay tuned for more parts to this series on the new business startup cycle.
In western North Carolina, Asheville, Waynesville, Hendersonville at (312) 671-6453 or firstname.lastname@example.org.