Not many small business owners know about the High Growth Small Business Job Creation Act that was signed into law in South Carolina in 2013. But some companies in need of funding could greatly benefit from it. The Act was created in order to encourage investment in early-stage, high-growth, job-creating businesses — mainly in order to increase the number of good jobs in South Carolina.
The Act is also called the the Angel Investor Act, because it provides tax credits to angel investors who make qualified investments in the businesses that meet requirements outlined in the Act. Angel investors can receive a tax credit of up to 35% of qualified investments in qualified businesses.
In order to qualify for funding through the Act, a business needs to register with the Secretary of State and meet all of the following requirements:
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must be a corporation, limited liability company, general partnership, or limited partnership located and headquartered in the state of South Carolina
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must have been organized for no more than five years before the qualified investment was made
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must have 25 or fewer employees
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must have had a gross income of $2 million or less in any complete fiscal year before registering as a qualified business
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must be primarily engaged in one of the following activities:
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manufacturing
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processing
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warehousing
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wholesaling
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software development
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information technology services
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research and development
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ambulatory health care services
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hospitals
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nursing and residential care facilities
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must not substantially engage in any of the following activities:
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retail sales
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real estate or construction
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professional services
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gambling
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natural resource extraction
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financial brokerage, investment activities, or insurance
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entertainment, amusement, recreation, or athletic or fitness activity for which an admission or fee is charged
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Once approved by the Secretary of State’s Office, the qualified business is registered for a period of 12 months and can renew each year as long as it continues to meet the requirements. If you’d like to register your business, you can apply here.
If you’re an angel investor looking for qualified businesses to invest in, you can see a list of businesses that meet the requirements of the Act at this link. In order to apply for a tax credit under the Act, you’ll need to complete the Angel Investor Credit Application.
Questions? There’s a list of FAQs here, or feel free to call (864) 836-3136 and we’ll set up a time to talk.