High Point, NC asked in Business Formation for North Carolina

Q: How do I start a Sole Proprietary Business in NC selling hand made goods?

I want to start my own business selling hand made goods and I'm not sure where to start.

Related Topics:
1 Lawyer Answer
Will Blackton
Will Blackton
Answered
  • Raleigh, NC
  • Licensed in North Carolina

A: A sole proprietorship is a business owned by one person, which has little legal significance separate from its owner and usually requires no governmental filing except a fictitious-business-name statement, which discloses the name under which the business will be conducted and the owner's name and address. In North Carolina, this is known as a "certificate of assumed name" and must be filed with the register of deeds in the county or counties where the business operates.

Although the sole proprietorship is probably the most prevalent form of small business in the U.S., it is often a poor choice because the owner has unlimited liability for the losses of the business, thereby putting all of the owner's personal assets at risk. Protecting personal assets is a major reason many people form corporations or LLCs with the Secretary of State. What liabilities are associated with starting a business? Many people think of slip and falls on the business premises or consumer goods causing personal injury to those who buy them, but there are many other types of risk associated with starting a commercial venture. A hand-made Darth Vader puppet, for example, may not carry a high risk of causing personal injury to consumers, but Disney could sue the maker for infringement of its intellectual property. If Disney sues a LLC, for example, they are likely limited to the assets of the LLC for payment and may not collect directly from the members if the LLC's assets are insufficient to pay debts/liabilities.

Contact a NC-based attorney familiar with business formation and choice of entity issues for more information or assistance with organizing the appropriate business entity. Many attorneys, myself included, offer free consultations.

Regardless of what type of business entity you determine is best for your situation, you should maintain a separate bank account for your business and avoid mixing your personal funds with that of your business; keep a separate set of books, apart from your personal financial records; and make clear in all contracts with others that they are dealing with a business, by signing them as [YOUR BUSINESS'S NAME], by [your personal name].

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.