Advantages of Incorporating a Business in Oklahoma
What has led to the steady increase in numbers of small businesses and start-up companies in Oklahoma? There are several reasons but the most obvious is that the state has a strong pro-business climate. The state was ranked #11 in 2014 for cities with “Top Business Climate”.
The highly competitive climate is due to a variety of factors including business friendly regulations and taxes, low cost of skilled labor and supportive legal climate. The policies and strategies of “The Sooner State” are aimed at encouraging businesses growth, expansion, and overall development. The state also has the 7th lowest ratio of primary state debt to state personal income.
Do you want to benefit from some of the most innovative incentive programs?
Setting up an LLC or Corporation – Advantages
There are a variety of small businesses or start-up campanies Oklahoma you can choose from including an LLC or a Corporation. What are the benefits of a corporation or LLC in this state? Let’s look at the advantages of the most common forms of formal associations:
Advantage#1: Salient benefits of Corporation or LLC formation
- Incentives for Businesses: There are a variety of incentives offered to businesses in order to encourage economic development. If you register a new company in Oklahoma, you can benefit from:
– Cash Incentives: This is a direct form of business incentive that is provided in the form of program like the “Quality Jobs Program”. The aim of the programs is to provide quarterly cash payments to qualifying companies.
– Credit Programs: This type of program is intended to reduce the tax burden on corporations and small businesses.
– Exemptions: These are incentive programs where a business can receive tax exemption on income, property and sales tax.
- Independent Life: If you register a new business in Oklahoma as an S Corporation then the most important advantage is that it will enjoy an independent life. The business entity will continue operation undisturbed even if it faces the death of one of its stockholders.
- Change in Ownership: If you have formed an S Corporation in Oklahoma then sale, purchase, as well as gifting of stock can facilitate changes in ownership. The changes can take place without disturbing the ability of the corporation to conduct its business.
- Oklahoma Tax Credit Programs: If you register a new company in Oklahoma as an LLC then there are a variety of tax credit programs that you can benefit from. These include popular programs like:
– New Markets Tax Credit Program: This is a federal program where your small business can benefit from tax credit incentives on equity investments made in a certified Community Development Entity (CDE).
– Small Employer Quality Jobs Program: This type of program is targeted at those who register a new business in Oklahoma. The program provides quarterly cash rebates of a maximum of 5% on new payroll. You can benefit from this rebate for a period of 7 years.
– New Jobs Tax Credits: This is a tax credit program aimed at growing manufacturers and provides tax credit on employment of full-time employees and on investment in depreciable property.
- Limited Liability: The owner of an Oklahoma LLC will be able to enjoy limited liability protection, which means creditors can sue the LLC but not the owner or investors.
Advantage#2: Business Incentive Programs
Every small business or start-up needs support in the form of financial incentives and funds. The state of Oklahoma has dedicated programs that are aimed at facilitating growth and expansion of small and medium sized enterprises (SME’s). Let’s take a look at some of the top programs for a start-up companies in Oklahoma:
- Oklahoma Enterprise Zones: The Oklahoma enterprise zone is an unincorporated area of a city or county that has the lowest 25 percent of per-capita personal income or 30 percent of the population lives below poverty. In order to benefit from the various tax incentives and business benefits in an enterprise zone, you will have to register a new business in Oklahoma. The business incentives under this program are governed by the Oklahoma Local Development and Enterprise Zone Incentive Leverage Act. Map
- Oklahoma Quality Jobs Program: Whether you form an LLC or a corporation in Oklahoma, you can definitely benefit from the quality jobs program. The different sub-programs that can be categorized under this parent program include:
– 10 Year Cash Incentive: A start-up company in Oklahoma can receive quarterly cash payments on 5% of total payroll for a period of ten years.
– High Impact Program: The payout will be 2.5 percent of the taxable wages for a period of 6 years.
– Small Employer Program: A business can receive almost 5% cash-back incentive for a period of 7 years.
Check Program Guidelines
Are there any Disadvantages of Incorporating in Oklahoma?
If you are wondering if there are any disadvantages if you register a new company in Oklahoma then it is important to know that every state has its own advantages and disadvantages. Similarly, every business also has its own advantages and disadvantages or pros and cons. The disadvantages in the state of Oklahoma are specific to the type of business entity you form. For example, a limited liability company has “Limited Life” while the process of incorporation takes more time than other forms of organization.