Advantages of Incorporating a Business in Kansas
There has been a steady rise in the number of startup companies in Kansas since Mars Chocolate North America started a chocolate factory in Topeka, Kansas. Today, some of the largest companies based in the state include Koch Industries, Payless Shoe Source, Spirit Aero Systems, Synergy Group, Sprint, Ace Aircraft Manufacturing Company, Air Midwest Inc, Coleman Company, and Cessna Aircraft Company among others. The Agriculture industry is right at the top and accounts for almost 45 percent of the Kansas economy. This is followed by Manufacturing, Oil, Gas, and Mining, and Education.
Business Growth Incentives for New Businesses
What makes Kansas such a good destination for starting a new business? Today, Kansas has a diverse industry base as it offers a strong transportation network and marketing advantages. Let’s look at some of the basic advantages that a startup company in Kansas can leverage:
Advantage#1: The benefits of Incorporation or LLC formation
- Federal taxation: If you register a new company in Kansas as an S corporation then the corporation or firm will not pay any income tax. Instead, each shareholder or owners in the company will be liable to pay tax on their personal tax returns.
- Independent life: When you register a new business in Kansas as an S Corporation, it will enjoy an independent life. This means that the incapacitation or death of a stockholder will not have a negative impact on the business operations.
- Transfer of ownership: The interests in an S corporation can easily be transferred without any adverse tax consequences unlike in a partnership or an LLC.
- Limited Liability: As an owner of a Kansas LLC, you will be able to enjoy limited liability protection quite similar to what a corporation enjoys.
- Flexible Profit Distribution: A startup LLC company in Kansas has the opportunity to select different ways of distribution of profits unlike a partnership where the distribution is 50-50.
- No Minutes of meetings: An LLC startup company in Kansas will not be required to maintain any minutes of the meetings or resolutions.
Advantage#2: Kansas Business Incentives
Once you register a new company in Kansas, there are several business incentives and programs that your company can benefit from. Let’s take a look at some of the most popular programs:
- Foreign Trade Zones (FTZ): The Foreign Trade Zones in Kansas are designated as Alternative Site Framework (ASF) and the primary objective is to provide a quota and duty-free entry point for an unlimited period under customs supervision. If you register a new company in Kansas FTZ, your business would be eligible for FTZ benefits.
- Economic Development Grants: These grants are available to eligible businesses. The objective of the grant is to provide gap financing to private businesses that retain or create permanent jobs in the state. The grant amount can vary from $35,000 to $750,000.
- State Small Business Credit Initiative: If you register a new business in Kansas, you will be able to benefit from this program where funding is provided through the United States Treasury and the State Small Business Credit Initiative (SSBCI). The fund amount can vary from $25,000 to $500,000 depending on the type of program opted for.
Are there any Disadvantages of Incorporating in Kansas?
The state of Kansas has a friendly business climate that provides small and medium sized businesses with good transportation infrastructure, skilled workforce, several types of grants and loans, tax credits, competitive electricity rates, Historically Underutilized Business Zones (HUBZone) programs, and much more. The only disadvantages that a startup company Kansas may face is related to the processing time and effort, which can be quite high depending on the type of business you are planning to form. In the long run, the advantages of forming a company in the state are far more than the disadvantages.