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NC SOS

Business Corporation

Business Corporations

  • Creation and Organizational Documents: Created by filing Articles of Incorporation in compliance with the North Carolina Business Corporation Act.
  • Management: A Corporation is owned by its shareholders and managed by a board of directors elected and acting under authority of the Articles of Incorporation and bylaws of the Corporation.
  • Limited Liability Characteristics: The liability of shareholders is limited to their capital contribution.
  • Tax Characteristics: The corporation is taxed on its income. Shareholders are taxed on dividends and other distributions received from the corporation (double taxation).
  • Termination: Corporations are unaffected by the death or withdrawal of a shareholder. Corporations are dissolved by compliance with the Business Corporation Act either voluntarily, administratively, or judicially.

The business corporation is by default a “C” Corporation. The “S” Corporations is a tax designation and is applied for with the IRS.

“S” Corporations:

(Note: Except for its tax characteristics, S Corporations have the same characteristics as regular business corporations (C-Corps).

  • Creation and Organizational Documents: Created by filing Articles of Incorporation in compliance with the North Carolina Business Corporation Act or similar statutes in other states, and by electing S Corporation status under Subchapter S of the Internal Revenue Code. G.S. 55-2-01 to 55-2-07 and Chapter 55D.
  • Management: An S Corporation is owned by its shareholders and managed by a board of directors elected and acting under authority of the Articles of Incorporation and Bylaws of the Corporation.
  • Limited Liability Characteristics: The liability of shareholders is limited to their capital contribution.
  • Tax Characteristics: The corporation is NOT taxed on its income. The income of the S Corporation is taxed to its shareholders.
  • Termination: S Corporations are unaffected by the death or withdrawal of a shareholder. Corporations are dissolved by compliance with the Business Corporation Act, either voluntarily, administratively, or judicially. G.S. 55-14-01 to 55-12-40.
Business Corporations Forms
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