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South Carolina is a great place to start a business. You have the opportunity to enjoy the beautiful mountains and southern hospitality while being uniquely situated halfway between New York and Miami. South Carolina’s transportation system includes interstates, ports, and railways, allowing your business to stay connected to the entire east coast and beyond.
To create a limited liability company (LLC) in South Carolina, you’ll need to follow specific steps to ensure proper formation. Forming a South Carolina LLC is a great way to ensure liability protection and take advantage of tax benefits.
The Palmetto state has a number of hoops to jump through to complete your official business formation, but we’re here to help. We’ll start by walking through this guide on how to start a South Carolina LLC and give some guidance on how we can streamline the process for you.
You’re on your way to entrepreneurship, and we’re happy to be along for the ride. The process of how to start an LLC in SC involves making some important decisions and filing some important paperwork with the South Carolina Secretary of State.
This government organization is tasked with keeping track of all registered businesses in the state. The office also maintains the state notary public database, approves and files state trademarks, and issues commissions for elected officials and officials appointed by the Governor. Are you wondering how to get an LLC in South Carolina? Filing documents with the Secretary of State is an important initial step.
This guide provides 5 important steps involved with forming your South Carolina LLC. We will walk you through each one so that you have an understanding of how the process works and what registering an LLC entails.
This guide is specific to filing a domestic LLC for those business owners initially opening their company in South Carolina. A foreign limited liability company is one that originated in a different state and now wants to branch out into South Carolina operations. This requires a separate filing process.
Naming your LLC in SC is an integral part of establishing your business. You want to make sure the name represents the purpose and character of your business, but there are some rules that must be followed.
Under state law, the name of your LLC in South Carolina must contain the words “limited company” or “limited liability company.” Abbreviations for these terms are also acceptable. The name you choose also needs to be distinguishable from other South Carolina businesses. We have additional resources if you’d like more details on how to name your LLC.
You can use our Business Name Checker tool to determine if your business name is available. Once you’ve chosen a name, you should consider reserving it so no one else can swoop in and take it before you officially register the name. A South Carolina LLC name can be reserved for 120 days.
In this day and age, having an online presence is crucial. Regardless of whether you have a brick-and-mortar business, provide a service, or focus on e-commerce, people are going to search for you online. Register a domain name that you can use to establish your website, email address, and web hosting. If you don’t register your domain name, someone else can take it and charge you a higher fee to have it.
A website helps build credibility in your industry and legitimize your business, no matter the size. One reason why your South Carolina LLC needs a website in 2022 is to reach your target consumers.
According to Google Search Statistics, more than 2.4 million searches happen through the search engine every minute. Someone could be searching for your specific service right now. 81% of retail shoppers conduct online research before buying almost any product or service. More than 50% of smartphone users discover a new company or product while browsing online.
The URL you choose for your website can make a big difference in whether or not potential customers can find you online. Use our domain name search tool to see if your desired business name is available as a URL. If you find a domain name you like, you might want to acquire it before someone else does.
Your business name and the domain name can be the same, or they can be different as long as the domain name makes sense. It may also be worth checking if related social media handles are available. Social media platforms are a way for businesses to stay engaged with current customers and acquire new ones.
We can help you find and purchase your domain name through our Domain Name Service.
DBA stands for “doing business as.” If you’d like your LLC in South Carolina to go by a name other than your official registered name, you’ll need to register a DBA in the county where your business operates. This process doesn’t involve the Secretary of State. Each county has its own process, which generally starts at the County Clerk’s office.
Every formal business entity in South Carolina is required to appoint a registered agent. In South Carolina, this is also sometimes referred to as an Agent for Service of Process.
This individual or business is tasked with receiving important business and legal correspondence for your company. They’re essentially your point of contact with the State of South Carolina. You need to have a registered agent chosen when you register your South Carolina LLC. Their information and signature are required on the formation documents. Your registered agent must be available during all normal business hours.
If you’re acting as your own registered agent or have appointed an individual to be your South Carolina LLC registered agent, availability is important. If your registered agent isn’t where they are supposed to be during regular business hours, there could be negative consequences for you and your company.
Taking vacations or sick days is ok for most people, but a registered agent has to be where they say they’re going to be. Unsuccessful delivery of important correspondence can result in a court ordering “substitute service,” which allows the documents to be served to the Secretary of State or published. In the case of notice of litigation, if you aren’t directly served, your LLC may fail to respond in time, which can result in a default judgment against you.
In limited circumstances, when there isn’t a current registered agent and registered information on file for an entity, the secretary of the business may serve as the agent for service of process.
A registered agent must reside in the State of South Carolina. If using a registered agent service, they must be authorized to transact business in South Carolina. You may choose an individual within the company to serve as the registered agent, or you can do it yourself. However, difficulties could arise if you take a vacation or even take a long lunch break and miss the service of important papers. Therefore, most companies use a separate agent.
Our registered agent service goes above and beyond just receiving documents. We also store all correspondence in an online dashboard that you can access at any time. It’s very easy for paperwork to get lost in the shuffle — which is why we’re highly committed to helping you stay organized.
When you choose us to serve as your registered agent, we’ll always be there to receive important notices on your behalf. This will help keep your South Carolina LLC complaint and help you avoid the embarrassment of being served legal documents in front of customers or clients.
The official formation of your South Carolina LLC occurs when you file your Articles of Organization with the Secretary of State. Without this document, your limited liability company doesn’t exist. Jumping through the hoops of gathering information for your Articles of Organization and ensuring proper filing can be time-consuming and intimidating. We can help with our LLC South Carolina Formation Services.
Although you can submit Articles of Organization by mail, electronic filing is much more convenient and efficient. Filing can be done on the Secretary of State’s website once you create an account. The cost to file this document is $110, but there may be other additional costs.
South Carolina doesn’t offer expedited filings. Filing online takes one to two business days for processing, while filing by mail takes four weeks.
A little planning can go a long way. Make sure that you have all the necessary information prepared before filling out your South Carolina Articles of Organization. You’ll need to have the following information to start an LLC in SC:
Consider whether you want your South Carolina LLC to be managed by members or managers. This will change the information you provide in your Articles of Organization.
Before submitting your South Carolina LLC Articles of Organization, you’ll need to choose how your business will be managed. Your options are member-managed or manager-managed. There are a number of factors that may influence your decision, including the number of members in the limited liability company.
A member-managed LLC operates similarly to a partnership where the members, who are also referred to as “owners,” have the ability to bind the LLC. This is usually best if there are few or only one member.
An LLC that’s manager-managed operates more similarly to a corporation where the corporate officers (managers in this case) have the ability to bind the company. This manager can be a member or can be hired from outside the company. This option is usually best when there are a lot of members or investors who prefer not to be responsible for the day-to-day operations of the business.
Though your Articles of Organization must be correct at the time it’s filed, that doesn’t mean the information can’t change. If you decide to switch your registered agent, contact information, or management type, you can do so using Articles of Amendment.
We can make this process easy with our amendment filing services. It’s important to make sure you update your information with the Secretary of State. We can also help keep you compliant with our Worry-Free Compliance Service, which includes two amendments annually.
Your LLC effective date is the date your company begins to legally exist.
As the owner of a South Carolina LLC, you have to pay taxes for the calendar year in which you register the business. If you’re close to the end of the year, it may make more sense just to wait until January to officially form your business. That doesn’t mean you can’t knock submission of your Articles of Organization off your list of things to do.
The South Carolina Secretary of State typically makes your limited liability company effective when you submit your paperwork. However, the SC Articles of Organization have a section for you to choose if you’d like a different effective date from the date you’re actually filing the document. You can delay your effective date for up to 90 days. Back-dating isn’t allowed.
An operating agreement isn’t necessary to function as a valid LLC in South Carolina, but it’s a good idea to have one.
An operating agreement is an important document used to govern how a limited liability company operates. It details the management structure of the LLC, including how it’s organized, membership rights, roles and responsibilities of management, conflict resolution, profit and loss distributions, and dissolution of the business.
Operating agreements ensure that all members have the same expectations for how the business will run. Having an official document that everyone can reference reduces the risk of conflict among members.
The purpose of your operating agreement is to lay out how the LLC will run and detail the responsibilities of members and managers. Although some people think that a single-member LLC doesn’t need an operating agreement, this isn’t necessarily true. Despite the fact that, as a sole owner, you don’t have to worry about conflict between members, the operating agreement still has a lot of value.
Here are some reasons that it’s a good idea to have an operating agreement even if you’re the sole owner of the limited liability company:
If you don’t have an operating agreement, your business will be subject to default state rules that may or may not be beneficial for your LLC.
An operating agreement should take into consideration all aspects of the business. If you’re unsure as to how to create an operating agreement for your South Carolina limited liability company, we offer a customizable template to help get you started.
EIN stands for Employer Identification Number. This nine-digit number is assigned by the Internal Revenue Service (IRS) and identifies your LLC for tax purposes.
An EIN is like a social security number for a business. It’s necessary to open business accounts, hire employees, and file and manage both federal and state taxes.
One of the benefits of having a South Carolina LLC is the flexibility when it comes to choosing how your business is taxed. An LLC can opt to be taxed as a sole proprietorship, an S Corporation, or a C Corporation.
Choosing an S Corporation allows for “pass-through” taxation. An S Corporation doesn’t pay taxes as a business. Taxes are paid on the owners’ personal income taxes. Being taxed directly at the personal income level is called “pass-through taxation,” and is one of the primary benefits of an S Corp. An S Corporation may still owe tax on certain income depending on the type of business.
C Corporations are taxed at both the corporate level and individual tax level. C Corporations pay tax on their income as a business. Taxes are also paid by owners and employees on whatever income is received from the business. This is considered “double-taxation.”
Filing as an S Corp could also save you money on self-employment taxes by allowing you to be an “employee-owner” and splitting your income into your salary and your share of the company’s profits. In doing this, you pay self-employment taxes on your salary, but not your profits.
The drawback to having an S Corp is that the Internal Revenue Service scrutinizes them very closely. You may be more likely to get audited.
Your South Carolina LLC EIN is free from the IRS, but you do have to go through the application process either online or by mail. You’re going to have a lot to do when starting a business. We can obtain your EIN for you with our EIN Service.
We can help
Whether you’re entering the tourism industry at Myrtle Beach, opening a college pub in Clemson, a restaurant in Charleston, or anything in between — we can help you through the process. There’s a lot to do when you start a business. We can take care of formation, compliance, and more so you can focus on making your enterprise a success.
Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
South Carolina LLC FAQs
There’s no state-wide general business license required in South Carolina. However, nearly all cities and counties require businesses to obtain a local business license at a local level. The business permits and licenses your LLC needs to operate depend on your location, industry, and activities. These can be found at the local, state, or federal levels. It can take a lot of time and research to ensure you’ve met all requirements for your business. We can help with our South Carolina Business License Report.
The cost to start an LLC in South Carolina is $110 when filing online. This fee is paid to the South Carolina Secretary of State when you submit your LLC’s Articles of Organization. There may be additional fees associated with starting your LLC, such as retaining a registered agent, reserving a business name, and securing licenses and permits.
One of the biggest benefits of having a limited liability company is personal liability protection. Also, the start-up process isn’t as difficult for an LLC as it may be for other legal entities. Tax flexibility is also a plus.
Unlike corporations, LLC taxes are paid on the owners’ personal income taxes. Being taxed directly at the personal income level is called “pass-through taxation.” This structure avoids “double taxation,” where you’re taxed at both the business and personal level.
Filing your Articles of Organization online takes one to two business days for processing, while filing by mail takes four weeks. South Carolina doesn’t offer expedited filings.
An operating agreement isn’t necessary to function as an LLC in South Carolina, but it’s a good idea to have one. You don’t need to file your operating agreement with the state, but you should keep it somewhere secure.
South Carolina LLC owners have the ability to choose the tax structure that’s best for them. Most opt for pass-through taxation as a default or by electing to file as an S corporation. You may want to consider consulting with a tax professional to determine what’s best for your specific business.
South Carolina doesn’t allow a series LLC business structure.
There are several steps to dissolving your LLC in SC. The first is to refer to your operating agreement. This document should have provisions for dissolution. Closing your business tax accounts is the next step, followed by filing Articles of Dissolution.
Your LLC operating agreement should contain provisions for ownership transfer that are specific to your business. Ownership changes usually need to be agreed upon by all members and may impact the voting rights of the purchasing party.
If you want your business to go by a different name than your registered name, you’ll need to file for a DBA in the county where your business operates. Each county has its own process, which generally starts at the County Clerk’s office.
Similar to a transfer of ownership, your LLC operating agreement should detail the provisions for removing a member. You’re required to file Articles of Amendment with the state to update the membership.
South Carolina LLCs aren’t required to file an annual report unless they file taxes as a C Corporation. South Carolina’s annual reports are part of the state corporate income tax.
You aren’t required to create a business plan for your SC LLC, but it’s always advisable. This plan can outline your business structure, plan, and goals.
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