How to Start a Driving School in North Carolina: A Step-by-Step Guide

Here you’ll learn everything you need to start your Driving School in North Carolina

North Carolina’s process for opening and operating a driving school is straightforward. The regulations do little to limit your freedom of action as a driving school–they tend to make sense.

This guide will walk you through what you need to do to start a driving school in North Carolina..

Driving School Licensing and Requirements

General requirements

To operate a driving school in North Carolina, you will need to be licensed by the state. Licenses are valid for two years from the date of issue. Applications should be submitted online. In addition to a completed application form, your application packet should include the following:

• A completed questionnaire, which will guide you through many of the requirements, as well as give you the ability to submit the list of vehicles your school will use.
• A personal history form for all owners, partners, officers, directors, and managers–except for those submitting a license application.
• Your proposed Plan of Operation.
• A copy of your certificate of insurance for each vehicle, as well as liability insurance for injury to a student.
• Copies of your sample contracts for approval.
• Your Certificate of Assumed Name.
• Your surety bond in the amount of $20,000.
• A copy of the report from the appropriate official showing you meet fire safety standards, as well as copies of your deeds/leases/agreements to operate your school from your locations.
• A copy of your fees for all services offered.
• A copy of the lease for any leased vehicles.

Submit the original of all forms, and keep a copy at your main place of business.

The current regulations for commercial Driver Training Schools in North Carolina are straightforward and clear. Driving school instructors and owners should know and comply with them–they allow a wide range of operation.

North Carolina requires the following minimum liability insurance coverage:

• $100,000 bodily injury to one person
• $300,000 bodily injury to more than one person
• $50,000 property damage

If you have employees, you must carry workers’ compensation insurance covering them–and potentially you–in the event of injury while on the job. You should, of course, consider higher coverages and/or an umbrella policy to cover your operations.

Driving School Owner’s License

North Carolina places few personal requirements on owners of driving schools. The main bar would be conviction for a number of crimes involving fraudulent behavior or moral turpitude. Your school also needs to have an instructor on staff from the beginning–that’s probably you!

Each manager, owner-operator, or instructor must have a valid license. They must have been licensed for at least four years.

You may not operate without a license for your program.

A driving school in North Carolina may be a full Driver Education Provider or offer the Driver Skills Development Program to new or licensed drivers on an off-road courses.

Driving Instructor’s License

While no specific requirements are set for driving school owners, instructors must demonstrate qualification before they receive a license from North Carolina. Submit the application form. Instructors must meet the following qualifications.

• Be at least 21 years old. and have at least a high school diploma (or the equivalent).
• Have at least 4 years driving experience in the license class you will be teaching.
• Not have a suspended or revoked license.
• Pass the criminal background check.

In addition. all Professional Driving Instructors in North Carolina must demonstrate completion of an 80-hour-hour instructor training program, either through a community college or a commercial Driver Training School. You’ll need also to pass a written and road test.

Instructor licenses must be renewed every two years by the anniversary date. Every four years, an instructor must take the two-semester hour course required for the original license, although hours may be substituted as follows:

• 16 hours of active and continuing teaching of driver education, and
• 48 hours of attendance at teacher training workshops.

Location

You are generally free to establish your business anywhere you see fit–meeting the requirements outlined below. The building must be permanent. You may not be in or adjacent to a building in which the North Carolina DMV receives driver license applications.

Your office space must meet local and state building requirements; you must have secretarial or telephone answering service available for at least six hours per regular business day between 9am and 5pm. If your office is located with your classroom facilities, a physical barrier must separate the two.

Your school license, instructor lists, and fee schedules must be posted conspicuously at each location.

Records must be maintained at your main business office.

Classroom facilities must be in a building suitable for instruction and approved by the DMV. Compliance with local and state sanitation requirements is expected. The classroom must be equipped with suitable desks, tables, chairs and other items appropriate to the setting. You must have at least 120 square feet. You must allow 12 square feet per student and 70 square feet for the instructor/equipment. Restroom facilities must, of course, be provided.

Your school name cannot be substantially similar to that of another driving school, and you may not use the words “State”, “Government”, “Municipal”, “City”, or “County” in the school name, and you must use your school’s name only in advertising and publicity.

The DMV may inspect all facilities at least once per year.

Don’t ever give a student or parent the impression that your instruction guarantees receiving a driver’s license–you may mention your pass rate.

Vehicles

Your vehicles need to have dual controls for the brakes. They must have passed the most recent North Carolina safety and emissions inspections–and those inspections may be the most rigorous in the country. An airbag for the driver is expected.

Signage must be conspicuous, and visible from both front and rear. Signage must say “STUDENT DRIVER” and include the name and phone number of the school.

Records and Contracts

You will need to keep records of all students and instruction for at least six years after they finish their training with you.

North Carolina does not require specific records, but your records may be inspected. You should be able to demonstrate the instruction given to all students, as well as dates, times, payments. Contact information for all students should be available. Records by instructor should also be available.

You must provide all students with written contracts. Each contract must include the following information:

• Total contract charges and payment terms
• The schedule of lessons, including the rate for lessons, the schedule (which reflects the requirements noted in the next section)–both classroom and BTW sessions.
• A statement indicating that the written contract is the entire contract–the specific language is on page 11 of the regulations
• A statement indicating your school is licensed by the State of North Carolina DMV
• A note of the limitation of BTW sessions to 3 students.

You may not say “no refund” but you may indicate that no refund will be given if services have been provided. Do not guarantee that the student will receive a driver’s license.

You must file your contract form with the DMV before using it–with your application.

The Driving School Curriculum in North Carolina

Driving schools in North Carolina may offer classroom and/or behind-the-wheel instruction.

For teens, your classroom course must last for at least 30 hours, subject to the following requirements:

• A session may be no longer than 3 hours on a school day, and 6 hours on a non-school day.
• No class may have more than 50 students.
• No work may be given to be completed outside the instructor’s presence.

North Carolina expects that you will follow the state Driver Education Program curriculum. While you may create your own, it will require approval from the Registry.

The 30-hour course, which must be approved by the state, must cover the following::

• Highway transportation history
• Characteristics of and influences on drivers
• Construction, maintenance, and safe operation of automobiles
• Traffic laws and natural law
• Pedestrians and bicycles
• Engineering of vehicles and highways
• Driving while impaired–six hours
• Handicapped drivers

Your behind-the-wheel course must last for 6 hours, and must meet the following requirements.

• Observation time and simulator use does not count towards the six hours.
• Behind-the-wheel work may not begin until after the teen student has completed the coursework, except when the student has contracted for both from you.
• No more than 2 hours of BTW instruction may be given in one day, and the BTW instruction given must be kept as part of the student’s record–signed by the student.

Courses for adult new drivers should provide 6 hours of classroom instruction and 6 hours of BTW instruction.

Commercial Driver’s License Instruction

Providing instruction for students pursuing a CDL in North Carolina generally follow those for the regular driver’s license.

Starting a Small Business in North Carolina

Your driving school is not just subject to the requirements for driver’s education in North Carolina. You also need to establish your Driving School as a small business, and have to consider a number of factors. The form of business you take up, as well as the procedures, are appropriate topics of conversation with your lawyer and accountant. The considerations we offer here are not legal advice, but should provide you with things to think about as you set up your business.

Business Registration

All businesses need to register in North Carolina, especially the business name—the “doing business as” certificate. Banks may not be willing to set up your account until you have that DBA form. We’ll include where to register in the business structures below.

You will also need to obtain a Federal Employer Identification Number. Banks may need it for your business accounts, and you may be wanting to employ people. To obtain an EIN, go to the IRS website and complete the application form you find linked there.

Business name

Before you get going, you’ll want to check to see if the business name you want is in fact available in North Carolina. You can search the North Carolina database, as well as visit the office of the county recorder.

Sole Proprietorship

Owning your own business is the easiest one to set up, but also may open you to liability concerns. As a sole proprietor, your business is simply part of your life. You keep a separate set of books, and complete a Schedule C for your 1040 form every April.

Sole proprietorships can expose the proprietor for full liability, even with insurance. That may mean that if you are sued, you may lose your home and property, as well as your personal bank accounts and other assets. This risk may not be worth the ease and independence.

In North Carolina, the big step you have to take is to register your Certificate of Assumed Name with the county or town clerk in which you have a place of business.

Corporations and LLCs

You may set up a full corporation (“Inc.”) as your business structure. Corporations limit your liability for loss to your investment in it, as a general rule (although banks may require you to be obligated personally if you take out a loan to get your business going). This form of business keeps your personal assets safe.

As an owner of a corporation, you’ll have to set up your driving school consistently with the rules for corporations in North Carolina. You’ll also have to decide whether to be an S Corporation or a C Corporation. Generally, the S Corporation form is set up for small businesses. It allows income and taxes to pass through to the owners. You will want to discuss these forms with your attorney and accountant.

You may be able to set your driving school up as an LLC in North Carolina. The LLC form provides the same limited liability as a Corporation, but do not have to comply with the corporate formalities most states require, including items like bylaws, required stockholder meetings, and minutes (although minutes of meetings are probably a good idea).

You’ll have to discuss the advantages and disadvantages for the LLC with your attorney and accountant.

Both Corporations and LLCs file with the Secretary of State. In addition to name reservation, you’ll need to submit the following forms

• Corporations submit Articles of Incorporation
• LLCs submit a Articles of Organization

Now What Do I Do?

Once you’ve complied with all the legal requirements to be both a driving school and a small business in North Carolina, you need to get students.

Getting students requires marketing—largely on the internet. You will need the following systems set up to obtain students:

• A website—focused on the types of students you want to attract, and aimed at your locality.
• The website should also include a blog, which allows you write about a variety topics and engage in Search Engine Optimization—which will drive traffic to your site.
• A Facebook page, linked to your website, to become noticed and drive traffic.
• Getting testimonials from successful students.

Marketing is something you will have to devote time to. DrivingSchool.Marketing can help you get the best bang for your marketing buck.

Conclusion

Your driving school in North Carolina will be up and running very quickly in North Carolina’s regulatory system. You will have to get everything ready to go before you apply–including your lesson plans and curriculum.

But that’s just good business sense–you want to be ready to market your business as soon as you’re ready to go.

Disclaimer: This page is part of DrivingSchool.Marketing’s series of state and provincial pages designed to help entrepreneurs like you start driving schools. States change their regulations, or the web pages they host their forms. While we believe these rules are accurate as of the date of publication, we cannot guarantee full accuracy. Please let us know if you spot any problems.

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Josh Meah

Josh is the CEO of DrivingSchool.Marketing. His goal is to be the marketing and business development partner of driving schools around the world, helping them become thriving businesses while also expanding general awareness for the importance of traffic safety standards and education.

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