Starting a business will always be a puzzle. Aside from a lot of factors to consider, the business structure is one of the most important things to decide on, as it will dictate the business management, operations, financial flow, and a lot more.
Given that South Carolina is indeed flexible and ideal for entrepreneurs, no doubt that this state would be your choice. Yet, what would be the best business structure for you in South Carolina? Let us find out through discovering these business structures and the dimensions of entrepreneurship in the state:
1. Discovering the Business Structures
Establishing a business will always require you to choose between the business structures as it will be the basis of your business taxation, operations, and even paperwork. So, what are the various types of business structures?
● Sole Proprietorship
This one seems to be the most chosen business structure of start-up entrepreneurs as this is quite simple to form and provides full managerial supervision to the owner. The pitfall here is that the financial obligations in the business are completely linked to the personal liability of the owner.
Corporation has two types, the S and C corporation. The concept of a corporation is that the business is a separate entity from the personal obligations of the organization. What makes a corporation unideal is that it requires extensive record-keeping.
As its name suggests, the partnership requires two or more persons who cohere to partake in the profits and losses of the business.
● Limited Liability Company (LLC)
The LLC is a type of state-recognized business structure perfect for those entrepreneurs who want to get the advantage of personal liability protection and partnership from the other stakeholders. Since it is a state-recognized business structure, the foundation also requires fees. For example, the South Carolina LLC cost is $110 if you file by mail and it will cost you $125 if you file it online. The fees are used mainly for Articles of Organization, or Certificate of Formation in other states, from which the cost varies from state to state.
2. Discovering the South Carolina’s Business Landscape
The state of South Carolina has a huge advantage when it comes to businesses, knowing that its economy has emerged among the states, it is recognized as one of “America’s Top Ten Pro-Business States.”
These factors might help you to decide when choosing the business structure:
● Statutory Incentives
Corporations can have this type of advantage wherein they could have local income tax-free, state property tax-free, inventory tax-free, and wholesale tax-free.
● Business Incentive Programs
What makes LLC ideal in South Carolina is that it could enjoy a variety of incentive programs including tax credits, sales and use tax incentives, and local property tax incentives.
3. Discovering Your Niche
The best way to determine the best business structure for you is to further realize your capacity, passion, interests, managerial and profitability control, taxation, and ownership preferences. As South Carolina is quite a fluid state for businesses, you can always choose the best business entity for you. Allowing yourself to discover your preferences most especially in managerial and profitability control, you could select the best one for the success of your business.
There are a lot of factors you should consider in choosing the business structure that will be the most advantageous to you and your business. But if you want to protect your personal assets and separate it from your business, enjoy incentives, do less paperwork and be a legally recognized business, an LLC might be the best fit for you.