Starting a new business can be an exciting time — but it also comes with a lot of paperwork. Figuring out the proper way to form your business by meeting all legal requirements is an important step you’ll need to understand before you can be up and running in South Carolina.
Completing these steps can seem overwhelming at first, but the business formation process is actually relatively straightforward — especially when forming a limited liability company (LLC) in South Carolina.
In fact, much of the process can be completed online, streamlining your LLC’s setup significantly.
In this guide, we’ll walk you through all of the steps to get your South Carolina LLC up and running. We’ll provide an overview of the process, then walk you through each step, providing examples along the way. We’ll also let you know how an LLC partner can help speed up the process and ensure your new company’s compliance.
We know that your No. 1 goal as a new business in South Carolina is to market and grow your LLC — allow this guide to help you get started.
Steps to Form your South Carolina LLC
To officially launch your LLC in South Carolina, you’ll need to register your company with the Secretary of State. Doing this allows the South Carolina government to formally recognize your LLC and stay in contact with your business to update you on new laws, regulations, or other essential business communications.
Before registering your LLC, you’ll have to do some work upfront to prepare your new company. This work includes deciding on your LLC’s official name, reserving your name, choosing a registered agent to receive government communications on behalf of your company, establishing an Operating Agreement to dictate how your company will be managed and setting up your LLC with the IRS.
We know there’s a lot of ground to cover, so we’ll break each requirement into steps to help you form your new LLC in South Carolina.
Step 1: Name Your South Carolina LLC
The first step you’ll take when forming your LLC in South Carolina is deciding on your official company name. Your company’s name is important — it’s part of your LLC brand and should be able to communicate quickly the products or services you offer, be easy to remember or distinct, and, most importantly, follow LLC naming regulations in South Carolina.
If you already have a name or two in mind, great! Compile your options on a list for the next step. If you don’t already have a name in mind, come up with a shortlist of three to five names that you and your partners agree on.
Once you have your list, you’ll need to do a search to ensure the names you’ve chosen are available. In South Carolina, you’re required to choose a unique LLC name — this means no other company can already have the name you want.
To complete this search, use the Business Name Search on the South Carolina Secretary of State’s website. From there, you can begin searching for all of the names on your list until you find one (or more) that is available. Next, you’ll narrow down your list to only available names and choose the best fit for your LLC.
Once you’ve decided on your new name, it’s time to add an LLC designator to the end. In South Carolina, you’re required to add this designator to your official business name. This means adding a suffix such as “LLC” or “Limited Liability Co.” to the end of your new business name.
Here’s a full list of available LLC designators you can choose from:
- Limited Liability Company
- Limited Company
- Ltd. Liability Company
- Limited Liability Co.
- Ltd. Liability Co.
Once you’ve chosen a designator, you have the option of reserving your company’s name until you’re ready to file. You can do this online or via mail. To fill this out online, you’ll return to the Business Name Search, enter the name you wish to use, and select “Add New Entity.” From there, you’ll be prompted to reserve your name online. If you’d prefer to do this via mail, you’ll download the Application to Reserve a Limited Liability Company Name (Form 33-44-106) and mail it to the government address provided at the end of the application.
The cost to reserve a name is $25 online or via mail.
If you decide to register your LLC name for a website, you’ll want to run a quick domain search to determine if your URL is available to purchase. Once you find the domain you want, reach out to ZenBusiness to reserve your web domain on your behalf.
Lastly, you might want to check any trademarks on your name and obtain a DBA with the state of South Carolina. It’s often easier and quicker to register a trademark at the state level than federally. To register a trademark with South Carolina, the mark must already be in use, and you’ll need to fill out the Application for Registration of a Trademark or Service Mark and submit it with a $15 fee.
However, if you plan on doing business outside of South Carolina, you could consider filing your trademark with the United States Patent and Trademark Office since the federal level offers more protections. Here you can also check their trademark database to make sure no one has trademarked your desired name.
If you’re securing a DBA (“Doing Business As”), you’ll need to revisit the beginning of this step to ensure the name is available. If it is, you’ll need to register this name through the county where your LLC is doing business.
Step 2: Appoint a Registered Agent in South Carolina
Now that your LLC name is ready to go, your next step is to choose a registered agent to represent your South Carolina company. A registered agent acts as a third party between you and the South Carolina government, receiving important paperwork and notifications on your behalf.
In South Carolina, you’re required to assign a registered agent to your LLC. A registered agent can be an individual agent or a business entity working on your behalf. To qualify, they must have an office in South Carolina where they’re available during normal business hours. P.O. boxes are not acceptable street addresses.
In South Carolina, business owners are allowed to act as their own registered agent; however, there are many reasons why this might not be a good idea. While it will save you from paying the expense of a registered agent, this savings comes at a cost. Firstly, when you act as your own registered agent, some of your private information will become a public record. Additionally, since the government could deliver service of process, if you’re the LLC registered agent, this could happen right in front of clients.
That’s why many LLCs in South Carolina opt to team up with a third-party registered agent service that can receive all legal paperwork on their behalf. Best of all, working with a qualified professional service is typically affordable.
Here are some additional benefits to keep in mind when deciding whether to hire an outside registered agent service:
- If you act as your own registered agent, you’ll need to refile forms and pay filing fees every time your office address changes. With an outside registered agent service, you won’t need to redo your paperwork if your LLC address changes.
- Registered agents need to be available during typical business hours (9 a.m. to 5 p.m.). If you team up with an outside registered agent service, you can set your work hours to a schedule that makes sense for your business, without worrying about missing important paperwork.
Step 3: File South Carolina Articles of Organization
Once you have your company name and your registered agent assigned, you can officially register your business with the state. To do this, you’ll want to fill out your Articles of Organization, available on the South Carolina Secretary of State website.
When filling out this form, you’ll need the below information handy:
- Your LLC’s official name. This is your LLC’s official name (including the LLC designation you chose).
- Your LLC’s address. This is your LLC’s office or operating address. If you do not have an office, you can use your personal address.
- Your registered agent’s name and address. This is your registered agent’s legal name and operating address (which must be located in South Carolina).
- List of organizers. This is where you’ll fill out the names and addresses of any other organizers or LLC partners.
- Company terms. You’ll check the “term company” box if your LLC partners have decided that the LLC will exist only for a set period of time. If you want the LLC to go on indefinitely, don’t check the box.
- Your LLC management structure. Some LLCs are run by LLC members, and others are run by manager(s) who are appointed by the members. Check this box if your company will be run by manager(s) and provide their names and addresses.
- Your LLC liability. You’ll check this box if one or more of your members/partners has decided to be legally obligated for the company’s debts. Most people leave this section blank, as protection from liability is one of the main reasons to have an LLC.
- Effective date. This is the date you want your LLC to go into effect. Leave this blank if you want the LLC to become effective immediately upon approval.
- Organizer signatures. This is where you and all other members will sign.
You can submit this form online or via mail. It costs $125 to file online and $110 to file by mail, but filing online is much faster.
If you choose to mail it in, send your form to:
South Carolina Secretary of State’s Office
Attn: Corporate Filings
1205 Pendleton Street, Suite 525
Columbia, SC 29201
Step 4: Create an Operating Agreement
Next, you’ll want to create an Operating Agreement for your LLC. An Operating Agreement is not a required legal document to conduct business in South Carolina; however, it is strongly recommended. Your company’s Operating Agreement will detail how your LLC is managed and run, laying out all important details, from financial processes to partner voting structures and managing employees.
Even if you’re the only member of your LLC, it can be a good idea to create an Operating Agreement. This document can protect your LLC if you can’t run your business for whatever reason. If you don’t have an agreement, your LLC will by default be run according to South Carolina law, which might not be the best strategy for your company.
Here are a few other key reasons why you’ll want to create an LLC Operating Agreement:
- An Operating Agreement can help further establish that your personal finances are separate from the company’s finances, debts, and liabilities if there are ever any legal issues.
- An Operating Agreement helps you quickly resolve conflicts (especially between partners) by following the management plans outlined within the document.
- An Operating Agreement allows new partners, investors, and managers to understand how the company operates before making any commitments.
Step 5: Apply for an EIN
Congratulations! You’ve officially registered your LLC in South Carolina! While this is an exciting step, there’s still a little more to finalize before the setup process is complete.
Next, you’ll want to register your new LLC with the Internal Revenue Service (IRS) online. This will get you set up to pay taxes, among other things. To start this process, you’ll register your company for an Employer Identification Number (EIN).
Your LLC’s EIN is essentially your business’s Social Security number. This number will allow your LLC to file taxes, open business bank accounts, hire employees and contractors, and much more.
If your LLC consists of one member with no employees, you may not be required to register for an EIN, but doing so has benefits for your business. By registering for an EIN, you’ll make it even easier to separate your business taxes from your personal taxes and assets.
To apply for your EIN, visit the IRS website. The process is quick and takes only minutes. You’ll receive your EIN once your request is submitted. This service is free, and your EIN can be used right away.
After this step, the last thing you’ll want to do is check to see if you need any special permits or licenses to operate your LLC in South Carolina. Requirements for permits vary by state and industry. In South Carolina, counties have different requirements, so you’ll need to follow the state’s online process to determine if you’re required to obtain additional permits or licenses. Beyond this website, though, you could still require other federal, state, local, and industry-specific licensing, so you’ll need to do some research or hire a service to do it for you.
How much does it cost to start an LLC in South Carolina?
Starting an LLC always comes with upfront costs. The administrative costs of starting an LLC in South Carolina can be found below.
Breakdown of formation expenses:
- Reserving your business name (optional): $25
- Filing your Articles of Organization (online): $125
- Register a trademark with South Carolina (optional): $15
In total, it will cost a minimum of $125 to get your LLC registered in South Carolina. Keep in mind that this does not cover any special licenses or permits, rush requests, consultation fees, or employee expenses.
It’s also important to know that while many states require you to file annual reports (and charge for this filing), South Carolina does not require this for companies that file their taxes as an LLC. If you file as a corporation, you will need to file an annual report and pay a $25 fee.
You can get help with any of the setup steps mentioned above from an experienced consultant like ZenBusiness. We offer professional business formation packages that include administrative services your LLC will need, from providing an Operating Agreement template and filing your LLC paperwork to providing registered agent services.
Other packages include additional administrative services, such as helping your LLC apply for an EIN and keeping your company compliant with state business laws.
What are the benefits of an LLC in South Carolina?
Many entrepreneurs decide to form an LLC for a reason. There are several benefits and legal protections that this type of business structure offers. Here are a few reasons why forming an LLC in South Carolina might make sense for you:
- You want a clear separation between your business finances and personal assets. LLCs make it easy to delineate between business and personal profits, debts, and liabilities.
- You want flexibility in how your company is run. While corporations have rigid rules to follow, LLCs have more flexibility to manage their company as they see fit, with fewer regulations to follow.
- You want to avoid double taxation. LLCs are exempt from double taxation, which means you’ll only pay taxes on your personal LLC profits when filing your individual taxes, rather than paying on both your corporate and individual taxes.
- You want fewer reporting requirements. LLCs do not have as many reporting requirements as corporations.
How is a South Carolina LLC taxed?
We’ve already let you know that your South Carolina LLC is exempt from double taxation when you file as an LLC, but there are other tax processes you’ll need to know about. We recommend partnering with a professional accountant or tax specialist if you have any questions to ensure your LLC is making the best choices possible to remain tax compliant.
A quick look at the tax requirements shows that if you’re an LLC owner, you’ll be expected to pay Social Security and Medicare taxes, otherwise known as self-employment taxes. You’ll also only report your LLC business profits and losses on your personal tax return.
If you choose to be taxed as a C corporation, you’ll need to fill out an 8832 tax form on the IRS website. You’ll also file separate corporate and personal taxes. This means you’ll report all business income, expenses, and losses when filing your corporate taxes every year. Your personal taxes will be filed separately, and you’ll also pay taxes on your business income on your personal tax return. Lastly, you’ll need to file an annual report online each year.
Whether you have an EIN or not, you’ll be responsible for paying taxes. While these taxes are due by the tax filing date each year, you should make quarterly payments to avoid tax penalties. You will need to do this for your South Carolina taxes and federal taxes. If you have employees, you’ll also need to withhold taxes from their paychecks. You’ll need to set up a South Carolina withholding account to pay the IRS directly. Finally, if you sell items or goods that collect sales and use tax, you’ll need to apply for a sales tax license on the South Carolina Business One Stop website.
South Carolina LLC FAQs
- What is the processing time to form my South Carolina LLC?
When you file your South Carolina Articles of Organization online, your request is typically processed right away and active in 24 hours. When mailing your Articles of Organization, the process can take two to three business days or longer, depending on the number of requests in the pipeline.
- Do I need to file an Operating Agreement with the state of South Carolina?
No, South Carolina does not require you to file an Operating Agreement to register your LLC. Creating an Operating Agreement is strongly encouraged, though.
- What tax structure should I choose for my South Carolina LLC?
Most LLC owners allow their business to be taxed the default way, which is as a sole proprietorship (for single-member LLCs) or a partnership (for multi-member LLCs). This method requires only that members pay taxes on their percentage of the profits on their personal tax returns. The LLC business entity does not pay taxes on profits. rnrnYou can also opt to be taxed as a C corporation or an S corporation if your LLC has high earnings or is a large business. You’ll want to understand all of the distinctions the IRS makes between filing as an LLC and a corporation before making this decision. You can learn more about the difference in our corporation tax guide, but we also encourage you to check with an experienced tax specialist.
- Does South Carolina allow a Series LLC?
In South Carolina, you are not allowed to form a Series LLC. A Series LLC is the terminology given to a grouping of LLCs, where a “parent” LLC has several “child” companies underneath it. Many states do not allow you to form this type of company.
- Which licenses and insurance are required for an LLC in South Carolina?
You do not need a general business license for your LLC to operate in South Carolina. However, depending on your industry, you might need to obtain a special permit. Many permits are determined at the county level, so be sure to read through the South Carolina Licenses, Permits, and Registration tabs to learn more about your LLC’s requirements.rnrnIf you’d like assistance determining which permits, licenses, and insurance you need to stay compliant, we recommend working with a ZenBusiness professional who can provide you with a full package containing all of the information you’ll need to stay compliant in South Carolina.
- How do I dissolve an LLC in South Carolina?
If, for any reason, you decide to dissolve your LLC, you can do so online or via mail by filling out your South Carolina Articles of Termination form. The filing fee is $10.