Under South Carolina law, a business may incorporate. If it chooses to do so, it is thereafter recognized as its own legal entity. As a separate entity from the owners, the business is then considered to be functioning on its own when it buys and sells property, assents to contracts and exercises legal rights. A business seeking to incorporate in South Carolina must file with the Secretary of State in accordance with established guidelines.
Benefits of Incorporation in South Carolina
There are distinct benefits to incorporating a business. Most importantly, liabilities the business accrues may be satisfied only by assets that the owners have specifically invested in it. With unincorporated businesses, personal property of owners can be liquidated in order to satisfy the liabilities of the business. A corporation also allows creditors in the Horry County area to assess the credit worthiness of the business as a whole rather than that of its owners, allowing the business to obtain loans more easily. Lastly, the ownership stake in a corporation can be apportioned into uniform slices, known as "shares" of stock. This makes it possible to sell ownership investments in more manageable slices.
Costs of Incorporation
Incorporation can be costly. First, a modest filing fee may be charged in South Carolina for any business that wants to incorporate. Also, a corporation is taxed as its own entity. The incomes of owners as individuals are also taxed of course, meaning that income to the corporation may be subject to double taxation. However, this disadvantage can be avoided with proper planning and help from a local Horry County lawyer.