North Carolina Franchise Forms - Nc Types Franchise

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North Carolina Franchise Forms FAQ Nc Franchise Form

What is a franchise?

There is a definition of a franchise which has been developed by the Federal Trade Commission. Basically, a franchise involves an owner of a trademark, trade name and/or copyright giving others a license under certain conditions to use these trademarks, trade names or copyrights in providing goods or services to the public. The franchisor is the party who grants the franchise, and the franchisee is the party who receives the franchise.

What is the legal relationship between a franchisor and franchisee?

Technically, the relationship between a franchisor and franchisee is a relationship between two independent contractors. Their rights are determined by the franchise agreement. A franchise then is not a separate business entity, but is a business relationship between two separate business organizations such as a sole proprietorship, a corporation, or a partnership. The relationship between the franchisor and franchisee is controlled by the franchise contract. A corporation, sole proprietorship, or partnership may own the franchise contract or may be the entity entering into the franchise contract.

What laws govern franchises?

There are laws that restrict termination of some franchises. In some states, prior notice of termination is required. Owners of automobile dealership franchises are protected from termination of their dealerships in bad faith. This protection is provided by the Federal Automobile Dealers Franchise Act.


What are Articles of Incorporation?

Articles of Incorporation are legal documents that outline the basic information about a corporation and officially establish its existence. In North Carolina, these articles need to be filed with the Secretary of State's office to form a corporation. The articles typically include important details such as the corporation's name, purpose, registered agent, and shareholders. They also outline the company's structure, such as the number of shares and classes of stock. Basically, Articles of Incorporation are like a birth certificate for a corporation, stating all the necessary information for it to exist and operate in North Carolina.


What to Include in Articles of Incorporation

Articles of Incorporation, when filing in North Carolina, should include specific information to legally establish a corporation. Firstly, you'll need to provide the corporation's name, which should include a corporate designator like 'Corporation', 'Incorporated', or 'Limited'. Next, mention the corporation's purpose, such as the type of business it will engage in. You'll also need to state the initial registered agent's name and address, who will receive official documents on behalf of the corporation. Additionally, mention the number of shares the corporation is authorized to issue, as well as their par value, if any. Finally, include the name and address of each incorporated who is forming the corporation. These essential details will help ensure compliance with North Carolina state requirements.


1. Full Name of Corporation

The full name of the corporation based in North Carolina is written as a formal and legal identification of a company operating in the state. It consists of all the names or titles associated with the corporation, including any additional designations or abbreviations. The purpose of specifying the full name is to ensure clarity and accuracy when referring to or conducting official business with the corporation in North Carolina.


2. Principal Place of Business

The Principal Place of Business refers to the main location where a business operates and carries out its activities. In North Carolina, the Principal Place of Business is the central hub where all the important functions of a business take place. It could be an office building, a storefront, or any physical space where employees come together to work and customers can interact with the business. It is the heart of the business operations and serves as the primary location that is recognized legally and financially.


12. Limitation of Director’s Liability

In North Carolina, there are certain limitations on the liability of directors. This means that directors are not always personally responsible for the debts and obligations of the company. Instead, their liability is limited to specific situations where they have acted unlawfully or negligently. This provides directors with some protection, as they are not usually held personally accountable for the financial losses or legal issues faced by the company. However, it is important for directors to fulfill their duties responsibly and make decisions that are in the best interest of the company to avoid personal liability.