How to Start an LLC in South Carolina (SC LLC 2024) (original) (raw)
How to Start an LLC in South Carolina: If you’re looking to start an LLC in SC, you’ve come to the right page. Setting up an LLC is easy and cost-effective. To form an LLC, you must follow a few steps that include naming your LLC, hiring a registered agent, filing your formation documents, doing the operating agreement, and finally obtaining the EIN. You can easily set up your LLC at a very low cost in South Carolina. Though, you must pay the mandatory state filing fee. These fees and charges can be tax deductible, making the LLC formation cost almost negligible.
On this page, You’ll find all the steps that must be taken to ensure that your South Carolina LLC has been correctly formed. We recommend you read the whole article very carefully, word by word, don’t miss anything 🙂
How to Start an LLC in South Carolina
An LLC (aka Limited Liability Company) is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection. For an LLC, members’ personal assets are not affected by business debts. However, in some cases, if the LLC is sued for business debts, courts might pierce the corporate veil and use the owner’s personal assets to meet their corporate liabilities.
If you wish to start an LLC in South Carolina, you must file your Articles of Organization with the State and pay a filing fee of $110. While it’s the most important step, it’s not the only one. There are 4 other crucial steps to follow to get your LLC formed in South Carolina. Below are all 5 steps that explain everything you need to do to start a South Carolina LLC in 2024. Let’s get started! You can always hire a professional LLC formation service in South Carolina to set up your LLC instead of doing it alone; a Pro service will ensure everything is done properly.
Step 1: Decide a Name for Your South Carolina LLC
The first step while forming a limited liability company in South Carolina is to give a proper name to your LLC. Before you name your business, you must know that the name should be easy to remember, available in the state, and follows all the LLC naming guidelines.
South Carolina LLC Naming Guidelines
There are a few specific requirements all the LLCs in South Carolina must follow while naming their Company. Some of the most important requirements are as follows:
- “Limited Liability Company”, “LLC”, and “L.L.C.” – any one of these has to be used as a suffix in your business name.
- You cannot use any name for your business that is confusing or misleading. Terms such as “Treasury”, “State Department”, “FBI”, “CIA”, etc. shouldn’t be included.
- Terms like “Bank“, “University“, “Attorney“, “Doctor“, etc can be added only after the additional requirements by South Carolina State Government are fulfilled.
- (Optional) It’s better to name your business something for which your desired domain is available.
| Important Links – | Submit Offline Form to – |
|---|---|
| South Carolina Business Entity Search – Online Name SearchName Reservation Form – PDFSouth Carolina LLC Name Search – Instructions | Secretary of StateAttn: Corporate Filings1205 Pendleton Street Suite 525Columbia, SC 29201 |
Reserve Business Name for Future
If you do not wish to file your LLC right now but want to hold the name you have decided on, then you can reserve your LLC name for 120 days. To keep the name, you must file a name reservation application and pay $25 to reserve your name with the South Carolina Secretary of State.
Doing Business As (DBA) or Trade Name
In South Carolina, there is no need for DBA filing. LLCs can file and reserve their LLC names if they are not registering the business right now.
Recommended: You can do name search, business domain, website, emails, and a lot more in one place by hiring a professional service. We recommend using –
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ZenBusiness – ($0 for LLC Formation)
Apart from LLC formation, ZenBusiness offers customized website templates and business emails at a very reasonable price. If you plan to get a website, then it is wise to have a “.com” domain for your business, but these days you can also use other TLDs like “.io”, “.company”, “.xyz,” etc. Here you can get everything you need for your business in one dashboard.
Do I have to include LLC in my company email/domain?
It is not legally mandatory to use the word LLC in your domain name or email. If you want, you can use it. However, it is recommended not to use LLC in the domain name. A domain name should be short and easy to remember.
Step 2: Assign a Registered Agent in South Carolina
The second step to forming an LLC in South Carolina is to appoint a Registered Agent. A registered agent is a person or business entity working on your LLC’s behalf. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in South Carolina. Hence, hiring a competent South Carolina Registered Agent for your LLC is necessary.
Make sure your registered agent is a resident of South Carolina or has a physical street address. This address will be used as the principal address of your LLC to receive any legal documents. Most LLC formation companies also provide registered agent services. Below are two great LLC formation services; even if you buy their cheapest plan (normally $0), you also get registered agent service and other services at a very reasonable price.
| LLC Service | Our Rating & Pricing | Top Features | Learn More |
|---|---|---|---|
#1 TOP PICK |
4.5/5 $0 + State Fees | 100% accuracy guarantee Worry-free service Great customer support | Learn More |
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4/5 $0 + State Fees | Free LLC Formation Affordable Add-on services Other business solutions | Learn More |
These two are our top recommendations for registered agent service, as they are competent and authorized to conduct business in South Carolina. Some LLC formation services also offer standalone South Carolina registered agent services. You can purchase only Registered Agent services without purchasing any other LLC formation services. This standalone service might become handy if you are doing it yourself and don’t want to disclose your home address or you don’t want to pierce the corporate veil.
Who Can Be a Registered Agent?
A person above 18 years of age and has a physical address in the state of South Carolina can be a Registered Agent. A Registered Agent can be an independent person or can be a business entity. One is responsible for handling all the legal documents on the LLCs behalf.
Can I Be My Own Registered Agent?
Yes, you can be your own registered agent if you are a resident of the state of South Carolina and you are above 18 years of age. To become a registered agent, you must have the authority to conduct any type of business in South Carolina.
Why Shouldn’t I be My Own Registered Agent?
There are a few reasons why you shouldn’t be your own registered agent. The address of the registered agent is used to communicate with the SOS or for any legal activities. If you are your own registered agent, you might have to upload your personal address to the public forum. Besides, the registered agent must be at the address during business hours. It won’t be easy for you as you also have to take care of other things in your LLC. Hence, it is wiser to appoint a separate entity as your registered agent.
What is Piercing the Corporate Veil in LLC?
If an LLC is sued in South Carolina, in some cases, courts might decide to lift the corporate veil, which means the owners of the LLC will be personally liable for their business debts. They might have to forgo their personal assets to repay their business debts. This is called piercing the corporate veil, where personal and business assets are not separated anymore. Your personal assets can be protected if you have enough capital and all your LLC documents are properly filed.
Registered Agent Consent Application
In South Carolina, there is no separate Consent Letter to be produced to the Secretary of State. At the time of change of Registered Agent (or the name or address), the new Registered Agent has to sign the consent letter. It comes with the Application form to Change the Registered Agent. The filing fee of $10 should be paid for it. For more information on the same, read our guide on South Carolina Registered Agent.
Step 3: File Articles of Organization in South Carolina
The third and most important step in forming a South Carolina LLC is to file the Articles of Organization. This South Carolina Articles of Organization is a legal document that is required to register your business with the South Carolina Secretary of State. It costs $110 to file your formation certificate in South Carolina.
The Articles of Organization include details like the name of the LLC, the registered agent’s name, address, employees’ details, and the company’s structure (member-managed or manager-managed). Before hiring employees in South Carolina LLC, one should know the rules and regulations thoroughly. Also, if you are expanding your existing business (an LLC) in other states to South Carolina, you must register as a South Carolina Foreign LLC.
How to File Online
Processing Time: Normally, it takes around 7 business days (approx) to get your LLC formed in South Carolina. The processing time for online filing might be a little faster than offline filing. With an additional cost, you can get expedited filing as well. However, the document processing time can be changed due to various factors.
Recommended: Online LLC Formation service can provide all these documents way faster than usual time with lifetime customer support and 100% accuracy. We recommend using –
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Every LLC owner has to pay the filing fees to register their business in South Carolina. This fee is mandatory but also tax deductible. If you’re doing it yourself (filing on your own), it will not cost you any additional service fee. However, it is not feasible to do that as the DIY process might be delayed, complicated, and messy, especially if you’re a novice entrepreneur. Hence, it is recommended to get professional guidance to get your LLC formed in South Carolina.
Step 4: Create Your South Carolina LLC Operating Agreement
Moving on to the fourth step, filing your operating agreement. An operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC. For an LLC with a real-life partner/spouse, you must need an operating agreement for that. This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
When it comes to filing a South Carolina LLC Operating Agreement, the state does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all the details of your business operation that helps in taking future business decisions, especially if you decide to dissolve South Carolina LLC later. Hence, having an operating agreement may not be necessary, but it is surely ideal.
Recommended: You can get a professionally made operating agreement for very less cost with ZenBusiness. You don’t need to worry about drafting it as they will take care of it on your behalf. We recommend using –
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ZenBusiness – ($0 + State Fees) Online LLC Setup
The operating agreement draft can be created for free if you don’t hire a professional. However, there is an advantage to appointing a proficient person/service. You will get a businesslike quality operating agreement at a very cheap fee, which will help you in the future. Hiring a professional service means you can sleep well at night 🙂
Step 5: Filing a South Carolina LLC EIN
The Employer Identification Number (aka EIN) is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify the type of business for tax purposes and taxes in general. The EIN is necessary for any active business or any form of business.
An EIN number in South Carolina is needed when the LLC hires employees. Hiring employees in South Carolina LLC requires following specific rules and regulations. On the other side, EIN for South Carolina foreign LLC should be obtained if your LLC is based in other states.
To obtain EIN (aka FEIN), one must fill up a form (Online or by mail) and submit it to the IRS. Enter details of your LLC, and finally, complete the form and send it to the address given. You can also get an EIN Assistant to help you with the process.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
Recommended: This hassle will be reduced when you hire an LLC formation service. They take care of obtaining EIN and all other things for your LLC. We recommend using –
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ZenBusiness – ($0 + State Fees) Online LLC Setup
Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
Congratulations, you are now done with all the necessary steps to form your Limited Liability Company in South Carolina. If you do it yourself, it should take you a long time to understand and do all the steps properly.
However, if you use ZenBusiness, it should be way faster. You will always have a live chat option and phone support with experts for any help you need. Their worry-free service will make things easier for you.
After Starting Your South Carolina LLC
After forming your LLC, there are still some things that you will need. The most important thing is to separate your business and personal assets. LLCs have limited liability protection that protects your personal assets from business liability. This is called a corporate veil. However, the corporate veil can be lifted or pierced by the court if the LLC is sued. In that case, the owners of the LLC become personally liable for their corporate debts. A few things like appointing a legit registered agent, having enough capital, and filing all the major documents with the state can save the LLCs from being pierced into the corporate veil.
BOI Report Filing
According to the Corporate Transparency Act, every LLC, corporation, and other type of business that is registered with the South Carolina SOS or similar authority, must file the BOI report with FinCEN. From January 1, 2024, it is mandatory to file a BOI report for every business entity. In this report, LLCs have to share information about the beneficial owners (having equal or more than 25% share). LLC owners can file BOI reports online or offline.
LLCs in South Carolina that are created before January 1, 2024, should file their BOI report by January 1, 2025. LLCs that are created in 2024, must file the BOI report within 90 business days of finishing the LLC formation process. Missing out on filing the BOI report may lead to a monetary penalty of $500/day.
Apart from that, there are a few things you need to take note of,
- Get a company business bank account
- File South Carolina business permits & licenses
- Get general liability insurance and professional liability insurance with coverage for employees.
- File a South Carolina LLC annual report or biennial report
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.
The LLC formation processing time in South Carolina is 3-4 business days if filing offline (by mail). The process takes 1-2 business days if filed online. Check how long it takes to form an LLC to know about the tentative timelines.
Cost of South Carolina LLC
LLCs can be formed by spending very less price. Apart from the mandatory state filing fees, you don’t have to bear additional service charges if you do it yourself. Following are the fees and taxes LLCs in South Carolina must pay to register and run a business in the state. Forming an LLC is no doubt cost-effective compared to other business structures. However, the fees and charges (tax-deductible) that you must pay to the state, such as name reservation fee, name filing fee, LLC filing fee, and Franchise Tax & Sales Tax (If applicable). Here are the main fees and taxes you must pay while forming your limited liability company in South Carolina,
| Fees/Tax | Amount to be Paid |
|---|---|
| Name Reservation Fee | $25 |
| Articles of Organization Fee | $110 |
| LLC Annual Fee | Not Required |
| Sales Tax | 6% |
In South Carolina, an LLC name reservation is not mandatory. You can register your LLC name at the time of registering your LLC. If you wish to hold the name for some time without registering your LLC, then you can do that online. Your LLC name will be reserved for 120 days without registering your LLC. It can be done by paying $25.
In South Carolina, LLCs have to pay a Sales Tax of 6% every year. Read our guide on LLC costs in South Carolina for more information.
South Carolina Foreign LLC
If you are interested in forming a Foreign LLC in South Carolina then you need to file the Certificate of Foreign LLC to the South Carolina Secretary of State. Foreign LLCs allow you to operate your business in more than one state. Along with the Certificate of Foreign LLC, you need to submit some more documents like the Certificate of Good Standing, etc. to the South Carolina SOS to form your foreign LLC in South Carolina. To know more in detail, check out our guide on South Carolina Foreign LLC.
Reasons to Start an LLC in South Carolina
In the last decade, it has been noticed that the GDP of South Carolina has jumped manifolds, and the reason behind this is the businesses it is catering to. Also, the reduction in tax liabilities, no double taxation (pass-through tax structure), and various business funding options are why South Carolina is a good option for LLCs. Read more on South Carolina’s classification of LLC tax. The other benefits offered are just unbeatable, a glimpse of which is discussed below.
Service sector incentive programs
If your start-up is based on the service sector and you start an LLC in South Carolina, this incentive program is made. There are some incentive programs in this program, like the job development program in which an entrepreneur will be provided credit based on jobs that they are creating. This fund will help out a business in leveling its cost of expansion of the business.
Along with that, a property tax exemption is also available under this program. A person is provided an exemption on the intangible property in which they invest their money.
Manufacturing Sector incentive Programs
Those who have a manufacturing unit running as their South Carolina LLC must know about this incentive program. There are two further divisions in this program, named Jobs Tax Credits and Investment Tax Credits. Any business entity in the sector can get a lucrative incentive in tax credits for the jobs they are creating at the altar. The range credit is from 1000to1000 to 1000to9000, depending on the job you create. This one-time credit program can last for a period of around 10 years.
Business Incentive Programs
Some attractive tax incentive programs are offered under this umbrella program started by the government for LLCs in South Carolina. The eligibility of these programs is variable, and one needs to include programs like.
- Tax credits are provided to an LLC in the form of an investment tax credit, Research and development credit, jobs creation credit, etc. It is provided to the LLC, which can help them invest more in developing their company and the state.
- According to the operational areas of the business, a sales and use tax incentive is offered to the business. Out-of-state sales and purchase is considered in this program for exemption, and one has to file a form to be eligible for this.
- If an entrepreneur buys new property in the state for their LLC, they get a tax rebate on that property for at least 5 years.
Top 3 Businesses in South Carolina
Before you take the major step to form an LLC in South Carolina, it is essential to brush up on your knowledge. You must go through a list of top businesses of South Carolina and their contribution to the state to better understand the business environment there.
Agriculture businesses
The state is known for its advanced agriculture techniques and machinery. They are number in the country in terms of the number of greenhouses and nurseries planted there. The area deployed under agriculture in the state is 4.9 million hectares supporting the jobs of more than 68,000 people.
Moreover, the advanced agriculture of the state is getting continuous investments with the help of which the contribution of the sector to state GDP is $41.7 billion. The main contributors to this value are cotton, wheat, eggs, and corn and cattle farms.
Automotive industry
There are a wide variety of automobile companies present in the state, which covers manufacturing to supplying automobile vehicles and their parts. If you look at the sector’s history, then the first BMW car was manufactured in South Carolina only.
Also, the state is the third-largest exporter and manufacturer of tires in the USA which has covered 1/3rd of the market. The total sales that the sector has managed to make in a year is around $27 billion, which is a considerable contribution to its GDP.
Aerospace Businesses
The aerospace industry’s economic contribution to the state’s total GDP is around $19 billion, making it an economic driver. Boeing aircraft are assembled and delivered in the South Carolina state, after which there are more than 400 companies of aerospace in the state. Right now, 22,000 people are working in the industry alone, and the numbers are rising significantly.
Some small businesses in the state are:-
- Car renting business
- Uber driver
- WordPress developer
South Carolina LLC Formation Review
Time needed: 5 minutes
Just to recap, here are the easy steps again when forming an LLC in SC. Click on the steps in this list to read the full detail.
- Name your South Carolina LLC
The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
- Choose a Registered Agent
In South Carolina, it is mandatory to select a registered agent for your LLC. Get a professional Registered Agent from LLC formation services to get things done hassle-free.
- File a Formation Certificate
Filing a formation certificate is necessary when forming an LLC in South Carolina. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create an Operating Agreement
An operating agreement is not a strict requirement in South Carolina but something encouraged when you start an LLC to avoid future conflicts.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
F.A.Qs
Can I file an LLC in South Carolina by myself?
If you are a resident of South Carolina, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
What is the cost of forming an LLC in South Carolina in a year?
Apart from the formation fee of 110(domesticLLC)and110 (domestic LLC) and 110(domesticLLC)and110 (foreign LLC), LLC costs in South Carolina include fees for Annual Reports every year. LLCs are liable to pay sales tax of 6% every year.
How long does it take to get an LLC in South Carolina?
It takes 24 hours to get an LLC in SC if you file it online. For the mail filing, it takes 5 to 7 days to get an LLC. If you hire a professional LLC service, then it might take less than that. We recommend TailorBrands which has impeccable turnaround time.
How to renew my LLC in South Carolina?
Every year all the LLCs have to submit an Annual Report to the South Carolina Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
What is the tax structure for an LLC in South Carolina?
Generally, for the LLCs, it is a default tax structure. Once you will obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens. Read more on the South Carolina Classification of LLC Tax.
In Conclusion
When it comes to forming an LLC in South Carolina, it is much simpler than other business structures. In South Carolina, starting a small business or a start-up is easy because of its diverse resources. For small budget holders, forming a limited liability company is desirable. The steps explained in this article are generic steps for starting a business in South Carolina. It is recommended to consult an attorney or service provider.
In South Carolina, while establishing an LLC, make sure you check with the local bodies like the city council and district office to get updated with local regulations. We recommend ZenBusiness, one of the best LLC services that offers LLC formation at $0 (+ state filing fees). Hiring a professional service would make things easier. From having a registered agent to complying with the local and state government, everything will be smoother than doing things all by yourself.