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Advantages of Incorporating a Business in Indiana

Setting up a new business can be quite a cumbersome process but the most important thing to keep in mind is choosing the state to establish your business in. Those wanting to register a new company in Indiana need to know whether the state offers them benefits that will aid in their growth in the long run.

Indiana with a Gross State Product of $336 billion is considered among the top 10 states for business by Forbes. The state offers new businesses:

  • A strong economic climate
  • Growth prospects in the competitive national and international markets
  • Lower business set up and operation costs
  • Variety of incentives

Advantages of setting up an LLC or Corporation

When it comes to establishing a startup company Indiana what type of business should you opt for? In the state of Indiana, you can choose between informal associations (sole proprietorship and general partnership) and formal associations (LLC, C Corporation, S Corporation, limited partnership, and limited liability partnership).

If you are planning to form an LLC or a Corporation then would you derive any benefits in the state? Let’s look at the advantages of the most common forms of formal associations:

Advantage#1: Salient benefits of Corporation or LLC formation

Corporation

  • Independent Life: If you register a new business in Indiana 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 faced the death of one of its stockholders.
  • Change in Ownership: If you have formed an S Corporation in Indiana 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.
  • Raise additional Funds: If you register a new company in Indiana as a C Corporation then the business entity will be able to raise additional funds through sale of stock.

LLC

  • Limited Liability: The owner of an Indiana LLC will be able to enjoy limited liability protection, which means creditors can sue the LLC but not the owner or investors.
  • Flexible Profit Distribution: When you register a new business in Indiana as an LLC, it will enjoy the benefit of being able to select different ways of distribution of profits.
  • Flow through Entity: An LLC is considered to be a flow through entity, which means the LLC will not be subjected to corporate income tax.
  • No Minutes of meetings: Unlike a corporation, an LLC startup company Indiana will not be required to maintain any minutes of the meetings or resolutions.

Advantage#2: Business Incentives

Are there any other advantages that a startup company Indiana can leverage? There are several state and federal incentives, loans, grants, tax credits etc., available to small and medium sized enterprises. Let’s take closer look at the most popular incentives for businesses in Indiana:

  • Indiana Enterprise Zones: If you register a new company in Indiana Enterprise Zone then your business entity can leverage from a variety of incentives and tax credits. If your business was situated in Bloomington, which is one of the Indiana EZ’s then your business would benefit from a variety of credit programs like Inventory Tax Credit, Investment Cost Credit, Employment Expense Credit, Loan Interest Credit, and Gross Income Tax Exemption.
  • Hoosier Business Investment (HBI) Tax Credit: This is a type of incentive program targeted at a startup company Indiana in order to bring in capital investment, support job creation in the state, and lead to overall improvement in the standard of living for residents.
  • Research & Development Sales Tax Exemption: This is a program wherein businesses involved in research and development can leverage from a 100 percent sales tax exemption.

If you register a new business in Indiana, there are several other incentive programs that you can benefit from including Industrial Development Grant Fund, Economic Development for a Growing Economy (EDGE), Headquarters Relocation Tax Credit (HQRTC), Skills Enhancement Fund (SEF), and Venture Capital Investment Tax Credit (VCI) among others.

Are there any Disadvantages of Incorporating in Indiana?

A startup company Indiana, whether domestic or foreign will enjoy more benefits in the state. Of course there are a few disadvantages like: incorporation may lead to higher overall taxes. The good news is that the disadvantages will not have any negative impact on your business growth in the long run.

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