Corporations and LLC’s
When most people think of starting a business, they usually decide the type of business entity based on what their friend did, or what their third cousin told them.
Serious business
But having the correct type of business entity has serious implications, both legal and tax. There is no one correct answer for any business. The decision needs to be made by comparing the different benefits and disadvantages of the different types of businesses with the purpose and goals of your business. Only then can the best answer for you be found.
Common mistakes
People usually do not realize that both the State of South Carolina and the federal government are involved in different issues concerning different types of companies. As a general rule, the State of South Carolina decides and has statutes controlling the type of entity and the requirements to be met. The federal government, on the other hand, primarily gets involved through the IRS and tax issues, but these are sometimes based on State law as well.
The most common mistake I hear is that clients come in and want to create an “S” corporation. In fact, there is legally no such thing. A corporation may be taxed as a Subchapter S corporation, but an "S" corporation is not a type of corporation.
More information
-
To learn more about the different types of business entities available in South Carolina, please click here.
-
To see a comparison of some of the different types of business entities, please click here.
-
To learn more about corporations, please click here.
-
To learn more about LLC’s, please click here.