Forming an LLC in South Carolina

By Jordan Walker, J.D. | Reviewed by Ally Marshall, Esq. | Last updated November 20, 2022

The business structure that you choose for your new business is essential. Deciding to form a limited liability company (LLC) is common for someone looking to start a small business. Choosing an LLC impacts taxes, daily operations, and how much your personal assets are at risk so make sure that you know all of the requirements for forming an LLC in South Carolina.

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Table of Contents

Steps for Forming an LLC in South Carolina

1

Name Your LLC

Choosing a business name is one of the first things you should do to get your business up and running. Take some time to sit down and brainstorm to come up with company names that will attract potential customers and stand out against the competition.

Next, you'll need to consider the state LLC laws. Under South Carolina law, the name that you choose for your LLC must be distinguishable from all other business names registered or reserved with the state. This means that you must pick an LLC name that is unique and different from the business names that are already on record. To make sure that the name you settle on for your business is available, you'll need to perform a name search through the South Carolina Business Entities Database.

Also, note that you'll have to include one of the following phrases or abbreviations in your LLC name (and remember that using Ltd. does not fulfill the requirements):

  • Limited Liability Company
  • Limited Company
  • LLC
  • L.L.C.
  • LC
  • L.C.

2

Get a Registered Agent

You'll need to choose a registered agent for service of process in South Carolina. Registered agents accept legal documents on behalf of a company when there's a lawsuit. To comply with the requirements of South Carolina law, your South Carolina registered agent:

  • Must have a physical street address in South Carolina
  • May be a South Carolina resident or a business entity authorized to do business in South Carolina

Your registered agent needs to be available during regular business hours. Some entrepreneurs choose to use a registered agent service to fulfill the legal requirements under South Carolina law.

3

File Your Articles of Organization

You'll need to file South Carolina articles of organization to officially form your LLC. You can file online or download the form and submit it by mail. The filing fee is $110. Your LLC articles of organization should contain:

  • LLC's name and address
  • Registered agent's name and address
  • Name and address of every LLC organizer
  • Whether the LLC is member-managed or manager-managed

Your LLC has an effective date of formation once your file the articles of organization with the Secretary of State.

4

Draft an Operating Agreement

LLC operating agreements are essential documents even though they're not filed with the state. Your operating agreement should address topics such as: voting powers, ownership of the LLC, admission process for new members, dissolution, and the distribution of profits and losses.

5

Get an EIN

An EIN (Employer Identification Number) or Tax ID number is a number that identifies your business for federal tax purposes. It's similar to an individual's Social Security number but assigned to businesses. The IRS (Internal Revenue Service) supplies these numbers, and it's easy and free to get one. You'll likely need an EIN to open a business bank account and hire employees. Apply for your EIN online or by mail.

6

Set Up Business and Tax Accounts

You'll need to open a business bank account to keep your personal and business funds separate. If you don't maintain this separation between your personal and business funds, you could lose your liability protection. Get a credit card and debit card for your business, as well. It'll make things easier when you prepare to do your taxes and handle the accounting.

You should set up an online account with the Secretary of State's Corporation Search, Filing, and Document Retrieval System. Here you can make changes to your LLC, request documents, and access South Carolina business forms and templates. You can also register with the South Carolina Department of Revenue and create a business tax account with MyDORWay to file and pay business taxes online.

Business and Tax Requirements in South Carolina

Your LLC will likely be subject to certain state taxes depending on the type of business it does.

State Business Tax

The South Carolina business tax rate depends on the structure of the business. Business owners of an LLC pay self-employment taxes on their profits.

State Employer Tax

If your LLC has employees, you're required to take the state's withholding tax from their wages and deposit the amount withheld with the Department of Revenue. LLCs with employees should also register for unemployment insurance with the South Carolina Department of Employment and Workforce.

Sales and Use Tax

Sales tax is imposed on the sale of goods and certain services in South Carolina. Counties are also permitted to impose a local sales tax if approved by voters in that county. The state use tax applies to the purchase of tangible goods for use in South Carolina when no state sales tax has been paid. The statewide sales and use tax rate is 6%. A list of the different types of sales and use taxes in South Carolina can be found on the Department of Revenue's website.

Business Licenses and Permits

In South Carolina, business licenses are issued by the local town, city, or county where your LLC is located. Contact your LLC's local government to find out if you are required to obtain any licenses or permits. If your LLC sells, leases, or rents certain goods and services or engages in particular kinds of business, you will likely need to get a specific license in the county where you transact business. For example, LLCs that sell goods need a retail license to operate. To learn more about business license requirements, visit the Department of Revenue website.

If your LLC offers certain professional services, like accountants and veterinarians, you're required to have specific licenses issued by the applicable state agency. A list of professions requiring licenses can be found on South Carolina's Business One Stop.

Registration in Other States

If you want to conduct business in a state outside of South Carolina, you have to apply for permission to do so in that state. Usually, this involves registering as a foreign LLC in the new state.

Annual Requirements in South Carolina

Once your business is up and running, you must meet annual filing requirements. While many states require an annual report from LLCs, South Carolina does not. However, you will be responsible for annually filing:

  • State business taxes
  • State employer withholdings
  • Sales and use taxes

Additionally, if you operate in other states, you are responsible for the annual filings required by those states as well.

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South Carolina LLC Formation FAQs

    • The cost of having an LLC in South Carolina can be different for business owners depending on the kind of business you operate and the state fees, taxes, or other costs that apply. Contact the Secretary of State for questions about fees for LLCs in South Carolina.

    • It costs $110 to file the articles of organization required to register your new business.

    • If you need to make changes to your articles of organization, the fee is $110. If you need to change your registered agent or their address, there is a $10 fee. You may also need to pay renewal fees for business licenses and permits.

    • There are several types of LLCs you can create in South Carolina. You should choose the kind of LLC that works best for your business needs.

      • Single-member LLC: This type of LLC is owned by one person who retains control over the business. A single-member LLC is treated as a pass-through entity for tax purposes and is taxed similarly to a sole proprietorship. The owner reports the business income on their personal income tax return unless they opt to be treated as a corporation.
      • Multi-member LLC: A multi-member LLC is owned by two or more members who share control of business activities. It's taxed in a way that is similar to a partnership.

    • A certificate of formation is like a charter document verifying your LLC's valid formation in a state. Instead of a certificate of formation, in South Carolina "articles of organization" act as a charter for LLCs successfully filed with the Secretary of State. You should have a copy of your articles from your initial formation documents. If you need a certified copy of your articles of organization, submit a request to the Secretary of State. You may need your articles to open a business bank account or apply for licenses and permits.

    • A certificate of good standing can be used to establish your LLC's legal registration in South Carolina and compliance with the state's laws and regulations for businesses. This document is called a certificate of existence or authority in South Carolina and is usually required to register your LLC in a different state and apply for business loans. You can get a copy from the Secretary of State for $10.

    • South Carolina has very basic formation requirements for LLCs. To create an LLC in South Carolina you must:

      • Choose a valid South Carolina LLC name that is not in use
      • Complete and file articles of organization
      • Pay the $110 filing fee
      • Name a registered agent in your articles of organization

      While there is no requirement to complete and file an operating agreement in South Carolina, this document can be an important part of your business planning and management.

    • An LLC can be formed by one person or a group of people. It protects business owners from personal liability for the company's debts and judgments. LLCs have a flexible business structure and help owners avoid double taxation.

    • To maintain your LLC, be sure to file any changes or updates regarding your business with the Secretary of State. If you need to amend your LLC's information, you can probably do so by filing an amendment to your articles of organization, the restatement of articles, or articles of correction. Most forms are available on the Secretary of State's website.

    • No. In South Carolina, you must file articles of organization with the Secretary of State to create an LLC. An operating agreement is an optional document for members of the LLC and is used for internal business purposes. LLCs don't have to have an operating agreement but if they do, there's no requirement to file or submit it to the state.

    • If you conduct business using a name other than your own name or that of your LLC, you are required to register the DBA (doing business as) with your county clerk so that there is a record of who is conducting business under that name.

    • There is not a state-issued business license in South Carolina. However, LLCs may be required to obtain local business licenses, permits, and registrations in the town, city, or county where they are located. A guide for county licenses and permits can be found on the Secretary of State website.

    • Articles of organization and other forms can be mailed to:

      Secretary of State
      ATTN: Corporate Filings
      1205 Pendleton Street, Suite 525
      Columbia, South Carolina 29201

      Business days for the Secretary of State are Monday through Friday from 8:30 a.m. to 5:00 p.m. The physical address to visit in person is:

      Secretary of State
      Edgar Brown Building
      1205 Pendleton Street, Suite 525
      Columbia, SC 29201

    • Many businesses choose to hire a registered agent service to accept service of process on their behalf. Otherwise, you or a member or employee of your LLC can be the registered agent if you have a physical address where your business can be reached.

    • A domestic LLC was initially formed and registered in South Carolina. LLCs formed outside of South Carolina are considered foreign LLCs.

    • To do business in a state or jurisdiction other than South Carolina, you will likely be required to register as a foreign LLC. Typically, this involves applying for a certificate of authority or registration of a foreign LLC in that state and paying the required fee. You are also asked to submit a certificate of good standing or some other verification of your LLC's compliance and legal existence in its home state of South Carolina.

    • LLCs that have been formed in other states (foreign LLCs) must apply for a certificate of authority to conduct business with the South Carolina Secretary of State.

    • If you wish to dissolve your LLC in South Carolina, you file articles of termination and pay a $10 filing fee.

    • No. The only states that allow the formation of anonymous LLCs are Delaware, Nevada, New Mexico, and Wyoming. An anonymous LLC is often used by individuals who want to protect their privacy because it does not require business owners to include their personal information on business formation documents, which are public records. If you have privacy concerns, you may want to consider using a registered agent service so you can keep your address under wraps.

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