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Starting a new business can be an exciting time — but it also comes with a lot of paperwork. Before you can get you business up and running in South Carolina, you have to take some important steps. The first step is to know how to form your business the right way and meet the legal requirements. For many new small business owners, forming a South Carolina limited liability company (LLC) is the springboard to success. So let’s look at how to get an LLC in SC.
Making sure you register your business properly can seem overwhelming at first, but we can help. Not only can we make your business official with our formation services, but our supporting services also give you the tools to manage and grow your business with confidence. Let’s take a closer look at forming an LLC in the Palmetto State.
When starting an LLC in South Carolina, you’ll need to register it with the South Carolina Secretary of State and file Articles of Organization. But first, there are a few decisions you need to make.
The first step is to decide on a name for your LLC. Your company’s name is important because it is part of your brand.It should:
If you have a name in mind, do some searching to ensure your name is available. The South Carolina Secretary of State has its own name search tool, but if you’re having trouble finding or using it, never fear. We’ve put together a guide on how to conduct an entity search in South Carolina. Make note that searching for you future South Carolina LLC name is a necessary step. The South Carolina Secretary of State will not approve a name that is identical to a name already existing in the database.
There’s also a requirement to add a 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 South Carolina LLC designators you can choose from:
If you’ve found the right name but aren’t quite ready to file, you have the option of reserving it with the South Carolina Secretary of State for up to 120 days. Our business name reservation service takes care of securing your South Carolina LLC name, and as part of the service, we also check to see if the name is available.
When you’re coming up with a business name, it’s wise to consider whether you can secure a matching domain name so that any future website can be easily found. We have a tool to help you do a preliminary domain name search, and our domain name registration service can help you secure the online name that will best serve your LLC’s needs.
In addition to choosing an LLC name for your business, you may decide to register a “Doing Business As” (DBA) name. You use a DBA when the name the business operates under is different from the registered name. Check out our page on South Carolina DBAs for more specific information.
Now that your LLC name is ready to go, your next step is to choose a registered agent. In South Carolina, there’s a requirement to assign a registered agent for service of process. A registered agent can be an individual agent or a qualified business entity. They must have a physical 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 can act as their own registered agent; however, there are many reasons why this might not be a good idea. Instead, consider hiring a commercial registered agent. The benefits are:
Luckily, we can help here as well. Our South Carolina registered agent partners can fulfill this requirement and give you the peace of mind to keep doing what you love, growing your business.
Once you have decided on a name and a registered agent assigned, you can officially register your business with the state. To do this, you’ll need to file Articles of Organization. You’ll need the following information:
We know that filing official government documents like this can be intimidating. With our business formation plans, our team can handle the filing for you to make sure it’s done quickly and correctly the first time. Once the state approves your LLC, your paperwork will be available from your ZenBusiness dashboard, where you can keep it and other important paperwork digitally organized. For a more comprehensive business organization, one of our customized business kits can help you keep these important documents organized and looking professional.
Next, you’ll want to create an operating agreement for your LLC. A South Carolina 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, from financial processes to member 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 operating agreement:
If you’re unsure as to how to start creating an operating agreement for your South Carolina LLC, we offer a customizable template to help get you started.
You now know how to apply for LLC in SC. Congratulations! You’ve officially registered your LLC in South Carolina! While this is an exciting step, there’s still 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. This means registering for an Employer Identification Number (EIN). This Federal Tax Identification Number is essentially your business’s Social Security number. This number will allow your LLC to file taxes, open business bank accounts, hire employees, 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. If you need help obtaining one, use our EIN service and we’ll take care of it for you.
Once you’ve secured an EIN, you’ll be able to open a business bank account. Having separate accounts for your business and your personal banking is critical for sorting out your finances at tax time and helps you avoid commingling funds. Commingling funds can not only make your taxes more difficult, but it could also be used against you if someone takes you to court to challenge whether you and your LLC are truly separate entities.
We also offer a discounted bank account for your new business. This allows for unlimited transactions, online banking, a debit card, and more. When you want to authorize others in your business to use the account, we offer a banking resolution template to simplify the process.
For further help managing your new business’s finances, try the ZenBusiness Money App. It can help you create invoices, receive payments, transfer money, and manage clients all in one place.
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 use our business license report and let us do the research for you.
Starting an LLC always comes with costs. Formation expenses will vary, but you can expect to spend around $125 to $150. Keep in mind that this does not cover any special licenses or permits, rush requests, consultation fees, or employee expenses.
You can get help with the steps mentioned above from our experienced team. We offer 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.
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:
On the federal level, single-member LLCs default to a sole proprietorship tax election, while multi-member LLCs default to a partnership election. Both are pass-through entities, but this isn’t always the most advantageous tax situation; certain larger LLCs can actually benefit from being taxed as a corporation. Luckily, LLCs can opt for a corporation tax designation as well, and can choose regular double taxation as a C corporation, or opt for an S corporation, which also avoids double taxation. A qualified tax professional can help you determine what’s best for your LLC.
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.
Taxes are complicated, and you want to make sure you do them right. If you’re looking for help, take a look at our free accounting assessment available in our business formation packages.
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.
No, South Carolina does not require you to file an operating agreement to register your 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 federal income taxes on their percentage of the profits on their personal tax returns. The LLC business entity does not pay federal income taxes on profits. You can also opt to be taxed as a C corporation or an S corporation, which could be advantageous 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. We encourage you to check with an experienced tax specialist.
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.
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. If you’d like assistance determining which permits, licenses, and insurance you need to stay compliant, we recommend working with one of our professionals who can provide you with a package containing the information you’ll need to stay compliant in South Carolina.
Before starting the dissolution process, the members of an LLC should vote to dissolve it. For the subsequent steps please refer to our South Carolina business dissolution guide.
Yes, a foreign LLC can conduct business in South Carolina. However, the state LLC law requires that you file an Application for Certificate of Authority with the South Carolina Secretary of State.