Under South Carolina law, a business may incorporate. If it chooses to do so, it is thereafter identified as its own legal entity. After incorporation, buying and selling property, agreeing to contracts and exercising legal rights are considered acts of the business itself and not its owners. To incorporate in South Carolina, a business must file with the Secretary of State in compliance with certain guidelines.
Benefits of Incorporation in South Carolina
Certain advantages inure to a business in South Carolina that has incorporated over one that has not. First, a corporation's liabilities can never go beyond the amount invested in the business by the owners. Had the business remained unincorporated, owners risk losing their personal property should the business become unable to fulfill its liabilities. Furthermore, banks in the North Augusta area prefer to evaluate the credit worthiness of a business as a whole rather than that of individual owners. This makes the process of receiving corporate loans simpler. Lastly, ownership of a corporation is divided into equal portions or "shares" of stock, which may be bought and sold much more easily than the ownership of an unincorporated business.
Costs of Incorporation
Incorporation can be costly. First, a modest filing fee might be charged in South Carolina for any business that wants to incorporate. Also, a corporation is taxed as its own entity. Disbursements to the owners of the corporation are also taxed as individual income, so this means earnings might be taxed twice. But this double taxation can be avoided with proper planning and help from a local North Augusta lawyer.