5 Things You Need to Consider Before You Change Your Business Entity in North Carolina
17 January 2018

If you are considering changing your business entity there are some things you should consider.

  1. Taxes – This can be a very big consideration. There are tax differences between the various types of business entities. Every business is different. Consult with a reputable CPA to discuss your business. As a small business owner your personal finances are often intertwined with your business and you need to make sure the business entity you choose doesn’t have negative tax implications.
  2. Workers Compensation – the type of business entity affects when you need workers compensation insurance. Business owners often don’t realize corporate officers are included in the count for the number of employees with certain business entities even if the officers are not involved in the day-to-day business operation. Consult the industrial commission rules in the state your business is domiciled in. If your business is domiciled in North Carolina, click here to go to the industrial commission’s website.
  3. Function of the owners – If you are a sole proprietor it is easy to review the options and make a decision on the business entity that best fits your needs. Multiple owners make it a more complex situation. Are the owners involved in the day-to-day operations of the business or are they involved from a consultative role? It is best to review all the options and consult with a reputable attorney before you make a decision.
  4. Insurance – Your business insurance policies have a named insured. If you change the business entity the named insured listed no longer exists therefore your new business entity doesn’t have any insurance. Consult with your agent before the change happens so the necessary paperwork can be taken care of for a smooth transition.
  5. Attorney – In order to change the entity of your business you need a reputable business attorney to assist and consult with you. This is an important step in ensuring your business structure is set up properly for years to come.

For more information about the different types of business entities read this blog about the Types of Business Entities in North Carolina.

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O’Connor Insurance Associates is fully licensed to provide personal and commercial insurance solutions for individuals, families and businesses across North Carolina.

We proudly serve families and business owners from our office in Charlotte, North Carolina. As an independent, family-owned agency since 2000, our team works with more than one insurance company to make sure homeowners, drivers, contractors, landscapers, small businesses and other personal and commercial clients receive coverage that fits their real risks.

About the Author

President & Founder

I’m Terry O’Connor, President and Founder of O’Connor Insurance Associates. I grew up in Pennsylvania, earned my bachelor’s degree at Edinboro University and my master’s at Gannon University, and in 1998 I traded snow for sunshine and moved to Charlotte. In January 2000, I started this agency on my own because I wanted to help people protect what matters most to them. More than two decades later, we’ve grown into an independent agency serving families and businesses across North Carolina, and we’ve been recognized as an IIABA Best Practices Agency every year since 2010, a distinction held by fewer than 1% of agencies nationwide.

I’ve seen firsthand how the right protection can change a family’s or a business owner’s life, and that’s why I lead with empathy, education and honest advice. As an independent agent, I work for you, not for one insurance company. I take the time to explain your options in plain language, and when you call our office, you reach a real person who knows your account.

Outside the office, you’ll usually find me outdoors hunting or fishing, or on the mat coaching wrestling as an assistant varsity coach at Mallard Creek High School. I’m also a proud supporter of the arts, usually in the front row cheering on my daughter in local theater productions. I’d be glad to review your coverage with you. Call me at 704-510-8884 or email terry@oianc.com.

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