Advantages of Incorporating a Business in South Carolina
South Carolina has been growing economically in leaps and bounds over the last decade. The Real Gross Domestic Product (GDP) of the state in 2007 was $167.65 billion and in 2017 it was $189.1 billion. A report published by Pollina Corporate Real Estate, Inc., has revealed that the state is among “America’s Top Ten Pro-Business States”. This is good news for a start-up company in South Carolina as all new businesses can grow and expand in this business-friendly climate and there cannot be any better value equation than that.
Setting up an LLC or Corporation – Advantages
You can choose to register a new company in South Carolina as a Domestic Corporation, Foreign Corporation, Limited Liability Company (LLC’s), Non-Profit Corporations, Limited Liability Partnership (LLP’s), and Limited Partnership (LP). Each type of business entity has its own set of advantages. Let’s look at the advantage of forming the most common forms of business entities.
Advantage#1: Salient benefits of Corporation or LLC formation
- Statutory Incentives: If you register a new business in South Carolina as a corporation, you can take advantage of the following statutory incentives:
– Favorable corporate income tax structure
– No local income tax
– No state property tax
– No sales tax on materials or industrial power for finished products and manufacturing equipment or machinery
– No inventory tax
– No wholesale tax
– No unitary tax on worldwide profits
- Independent Life: If you register a new business in South Carolina 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 is faced with the death of one of its stockholders.
- Change in Ownership: If you have formed an S Corporation in South Carolina 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.
- Business Incentive Programs: If you register a new company in South Carolina as an LLC then there are a variety of business incentive programs that you can benefit from. This includes popular programs like:
– Tax Credits: There are a variety of tax credits that a business entity can benefit from and some of the popular programs include Investment Tax Credit, Research & Development Tax Credit, Port Volume Increase Tax Credit, Jobs Tax Credits, Corporate Headquarters and Enhanced Corporate Headquarters Tax Credit, among others.
– Sales and Use Tax Incentives: Sales and use tax incentives is offered according to the operational area of the business, which is – Out-of-State Sales or Out-of-State Purchases. Sales Tax Exemptions are also a part of this incentive program. You will have to register a new business in South Carolina to take part in the incentive programs.
– Local Property Tax Incentives: This includes Property Tax Exemptions and Incentives like 5-Year Property Tax Abatement or Textile Revitalization Credit. Know More
No Minutes: An LLC is not required to keep any formal minutes or resolutions as compared to a corporation, thus making it easier to function
Advantage#2: Other Business Incentive Programs
South Carolina has a unique location and as a result can offer businesses a strong infrastructure making operation of any business easy. The industrial power rates are also 9% lower than the national average and this along with the range of incentive programs provides a start-up company South Carolina with a win-win situation. The incentives can be divided into two main categories, which are:
- Incentive Programs for the Manufacturing Sector: There are a variety of incentives programs but the popular programs include Jobs Tax Credits and Investment Tax Credit. These programs are valuable financial incentives where a business entity can get tax credits on investment made or jobs created. The credits can vary from $1,000 to $9,000 per job under the job credit program. The investment credit program is a one-time credit with dynamic credit value that can be carried forward over a period of 10 years. Know More
- Incentive Programs for Services Sector: If you register a new company in South Carolina then you can benefit from incentives programs under this segment like Job Development Credit through which you can benefit from the funds provided to offset the cost of locating or expanding your business facility in the state. You can also benefit from Property Tax Exemptions available on intangible property. Know More
Are there any Disadvantages of Incorporating in South Carolina?
If you are wondering if there are any disadvantages if you register a new company in South Carolina 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 South Carolina are specific to the type of business entity you form like a limited liability company has “Limited Life” while the process of incorporation takes more time than other forms of organization.