Form Your North Carolina C Corporation

The state filing fee for Articles of Incorporation is $125, filed with the North Carolina Secretary of State. Ongoing costs include a $25 annual report and North Carolina franchise tax with a $200 minimum each year.

Online filings with the North Carolina Secretary of State are processed immediately, while filings submitted by mail take roughly 10-15 business days. Most founders file online to incorporate the same day.

Venture capitalists and institutional investors almost universally require a C Corporation because it can issue preferred stock, supports a clean cap table, has perpetual existence, and uses a board of directors and bylaws for governance — the structure needed for priced rounds and SAFEs.

A C Corporation pays the 21% flat federal corporate income tax plus North Carolina's flat 2.25% state corporate income tax, one of the lowest in the nation. Profits distributed as dividends are taxed again at the shareholder level, the so-called 'double taxation' of the C Corporation.

North Carolina levies a franchise tax of $1.50 per $1,000 of net worth, with a $200 minimum, filed alongside the $25 annual report each year. The state sales tax rate is 4.75%.

An 83(b) election lets founders with restricted stock pay tax on the shares' value at grant rather than as they vest. It must be filed with the IRS within 30 days of receiving the restricted stock — the deadline is strict and cannot be extended.

Qualified Small Business Stock (QSBS) gain-exclusion benefits under Section 1202 may apply to qualifying C Corporation stock, which is one reason founders choose the C Corporation. QSBS rules changed in 2025, so confirm current eligibility and limits with a tax advisor.

Under FinCEN's March 2025 interim final rule, US domestic entities and US persons are exempt from Beneficial Ownership Information (BOI) reporting. Only entities formed abroad and registered to do business in a US state are still required to file.