How to Start an LLC in South Carolina (Step-by-Step)
If you’re considering forming a South Carolina LLC, you’re making a smart choice for protecting your assets while enjoying flexibility in business operations.
To establish your LLC successfully, you must choose a unique business name, designate a registered agent, and create an LLC operating agreement.
But there’s more.
Filing your LLC Articles of Organization in South Carolina costs $125 when filed online and $110 when filed by mail. Online filings are typically approved in one to two business days, while mail filings in three to four.
This guide compiles all the information you need to start an LLC in South Carolina today.
What Are the Steps to Start an LLC in South Carolina?
To start an LLC in South Carolina, you need to:
- Step 1. Choose a unique name for your South Carolina LLC
- Step 2. Designate a registered agent in South Carolina
- Step 3. File Articles of Organization with the state
- Step 4. Create an Operating Agreement
- Step 5. Get an EIN from the IRS
- Step 6. File a BOI Report
Let us dive more in-depth into these steps so I can show you how to get them:
Step 1: Choose a Name for Your South Carolina LLC
Naming your LLC is an essential first step. You want a name that reflects your business and stands out.
Start by conducting a South Carolina LLC search to see if your desired name is available. If your favorite name is already in use, think of alternatives. Your name must be distinguishable from existing businesses. The names must be different enough for customers to tell them apart.
Once you have an available name, you must add an official designation. Here are some options to include at the end of your name:
- Limited Liability Company
- Ltd. Liability Company
- Limited Liability Co.
- Ltd. Liability Co.
- L.L.C. or LLC
- L.C. or LC
This designation shows that your business is an LLC.
If your chosen name is available, consider reserving it by filing an Application for Name Reservation. This costs $25 and holds the name for up to 120 days, non-renewable.
This can help secure it while you conduct a nationwide trademark search. This way, you avoid possible conflicts later on.
If you wish to market your business with a different name, you can register a doing business as a (DBA) name. This is often a more straightforward or shorter version. Remember that in South Carolina, DBAs are registered at the county level, not with the state.
Protect your brand by promptly trademarking your name and any DBA you choose.
Step 2: Select a South Carolina Registered Agent
Choosing a registered agent is vital in setting up your LLC in South Carolina. A registered agent is your official contact for legal documents and government notices.
Who Can Be a Registered Agent?
You have a few options for who can be your Registered Agent in South Carolina:
- You: You can act as your registered agent, but remember you must be available during business hours to receive documents.
- A Family Member: A trusted family member can be your registered agent.
- An LLC Formation Service: Professional services offer expertise in handling official correspondence and ensuring compliance with state regulations.
- A Lawyer: A legal service firm can also serve as your registered agent, providing additional legal support if needed.
Requirements for South Carolina Registered Agents
South Carolina law requires registered agents to have a physical street address, not just a P.O. Box. The address must be where the agent can consistently receive legal documents and official mail during regular business hours.
Additionally, the registered agent must be at least 18 years old and available to accept service of process. This means they must be present to handle any legal notices or court documents delivered to the LLC.
Your registered agent’s name and address will be listed on public records for everyone to see. If you don’t have an address in South Carolina or want more privacy, I recommend hiring a Registered Agent Service for your LLC.
What registered agents do I recommend for South Carolina?
I highly recommend Northwest registered agent services for obvious reasons.
They offer a range of benefits that set them apart, including a free year of registered agent service, which helps you save (about $300) on initial costs.
You’ll receive a complimentary operating agreement essential for outlining your LLC’s internal structure. My favorite part? Northwest also allows you to use their office address for your LLC filing, keeping your address off public records and enhancing your privacy.
Their free email forwarding service ensures you stay on top of important correspondence, and their exceptional customer support is always available to assist you whenever needed.
Step 3: Prepare and File South Carolina LLC Articles of Organization
To officially create your LLC in South Carolina, you must prepare and file the Articles of Organization. This document registers your business with the state. This form includes essential details such as your LLC’s name, address, registered agent, and members’ or managers’ names.
To file your Articles of Organization in South Carolina, follow these steps:
Step #1. Complete the Form: Obtain and complete the Articles of Organization form from the South Carolina Business Filings website.
When filling out the Articles of Organization, you will need to provide:
- LLC’s legal name
- Registered agent’s name and address: This is the person or business responsible for your LLC’s legal documents.
- Business purpose: A brief description of what your LLC does.
- Number of members: How many members are in your LLC.
- Delayed effective date: If you want your LLC to start later, include this date.
- Names and signatures of organizers: At least one member must sign.
If you’re looking to form a foreign LLC in South Carolina, you must file an Application for a Certificate of Authority and obtain a certificate of good standing from the initial filing state.
Step #2: File Online or by Mail: You can file your Articles of Organization online through the South Carolina Business Filings website or by mailing the completed form to:
South Carolina Secretary of State’s Office
Attn: Corporate Filings
1205 Pendleton Street, Suite 525
Columbia, SC 29201
If you’re mailing your form, include a self-addressed stamped envelope for your approval copy.
Step #3: Pay the Filing Fee: The filing fee is $125 when filed online and $110 by mail.
Once your articles are filed, the state will review and approve them. This process usually takes one to two business days for online filings and three to four business days for mail filings.
Once your application is approved, you will receive a stamped copy confirming your LLC is authorized to operate in South Carolina. After approval, your LLC is officially recognized, and you can start your business activities, obtain your EIN, open a bank account, etc.
Step 4: Prepare an Operating Agreement for your LLC
An operating agreement is an essential document for your South Carolina LLC. This internal document outlines how your LLC will be run. It sets rules for management, profits, and what happens if a member leaves.
Although having an operating agreement is not a legal requirement in South Carolina, it is highly recommended. It helps protect your interests and can make running your business smoother.
Why is it necessary?
- Clarifies Roles: It defines the roles of each member. This helps prevent misunderstandings.
- Protects Limited Liability: An operating agreement can strengthen your LLC’s limited liability status.
- Sets Rules: It details decision-making processes and profit sharing.
Key elements to include:
- Member Information: List all members and their ownership percentages.
- Management Structure: Specify whether your LLC is member-managed or manager-managed.
- Voting Rights: Outline how votes are taken and what constitutes a majority.
- Distributions: Explain how profits will be distributed among members.
- Meeting Procedures: Outline how often meetings will occur and how members will be notified.
- Amendment Process: Describe how changes can be made to the agreement in the future.
You can create this document on your own or seek legal assistance. Make sure all members review and agree to the terms. Having clear guidelines can save you time and trouble down the road.
Step 5: Obtain an EIN for Your LLC
An Employer Identification Number (EIN) is a unique identifier for your business. It is necessary for various reasons, such as opening a business banking account, applying for specific permits, and making vendor contracts.
How to Apply for an EIN:
- Online: Visit the IRS website. This is the fastest way to get your EIN.
- By Mail: Fill out Form SS-4 and send it to the IRS. This option takes longer.
- By Fax: You can also fax the completed Form SS-4.
- Phone: U.S. residents can call the IRS at 1-800-829-4933 to apply.
How Much Does It Cost To Get EIN?
Obtaining an EIN is free. However, some services charge $100 or more to help you with the entire process.
How Does it Take to Obtain my EIN?
- Online: Get it immediately.
- By Mail: Expect 4 to 6 weeks.
- By Fax: Usually within four business days.
Step 6: File a BOI Report
After forming your LLC, you must file a Beneficial Ownership Information (BOI) report. This step is crucial for compliance with federal regulations.
Who Should File?
If your LLC is not exempt, you must file a BOI report. Exempt entities generally include larger businesses and certain government bodies.
When to File:
- Companies created before January 1, 2024, have until January 1, 2025.
- New companies formed between January 1, 2024, and January 1, 2025, must file within 90 days.
- LLCs formed after January 1, 2025, must report within 30 days.
How to File:
- Visit the FinCEN BOIR e-filing page.
- Choose from the options available:
- Initial Report
- Correct Prior Report
- Update Prior Report
- Newly Exempt Entity
- Select “Initial Report” for new filings and click NEXT.
Information Needed:
- Business Name and Address: Your LLC’s official name and primary location.
- Owner Information: Names, addresses, and dates of birth for each beneficial owner.
- Identification Numbers: This could include Social Security numbers or tax ID numbers.
Provide accurate and complete information to avoid delays. Filing this report is a legal requirement and helps maintain transparency in business operations.
What are the Different Methods To Start a South Carolina LLC?
There are several ways to create an LLC in South Carolina. Each method has its own benefits and drawbacks, so choosing the one that best suits your needs is essential.
Here are the main options you can consider.
DIY LLC Formation in South Carolina
Starting your LLC on your own is straightforward. You are responsible for all responsibilities. You must file the Articles of Organization with the South Carolina Secretary of State.
All by yourself, no third party!
Pros:
- Cost-Effective: You save money by not hiring anyone.
- Control: You have complete oversight of each step.
- Learning Opportunity: You gain knowledge about the process.
Cons:
- Time-Consuming: It may take longer if you are unfamiliar with the process.
- Complexity: You must ensure all forms are correctly filled out.
- Privacy issue: If you serve as your registered agent, you risk having your address out there.
- Lack of Guidance: You might miss the necessary steps.
Using a Professional/Online LLC Formation Services
Many online services can help you form your LLC. These platforms guide you through the entire process, handling most paperwork.
Pros:
- Convenient: They manage the filing, saving you time.
- User-Friendly: Most platforms have easy-to-understand instructions.
- Support Available: Many offer customer service for questions.
- Privacy benefits: Most services allow you to use their address for free, so your address doesn’t get compromised
Cons:
- Costs: You’ll pay a service fee.
- Variable Quality: Some services may not be as reliable as others.
Hiring an Attorney
Working with an attorney is another option for forming your LLC. This method ensures you have professional legal guidance throughout the process.
Pros:
- Expertise: An attorney knows the legal requirements and can avoid pitfalls.
- Customization: Your LLC can be tailored to your specific business needs.
- Support with Complex Situations: Ideal for businesses with unique circumstances.
Cons:
- Higher Costs: Legal fees can be expensive.
- Dependence on Others: You may rely heavily on the attorney’s schedule.
- Potential Delays: The process may take longer due to attorney workloads.
What is The Cheapest Alternative Way to Form an LLC in South Carolina?
If you’re looking to start an LLC in South Carolina on a budget, the most affordable option is to do it online. By filing the Articles of Organization directly with the South Carolina Secretary of State, you can keep costs between $110 and $125, depending on your filing method.
This DIY approach helps you avoid the extra fees of hiring a service or lawyer, saving you money for other business expenses.
However, while DIY is cost-effective, it requires some effort. You’ll need to understand all the forms and regulations, and missing a detail could delay your application or create problems later.
Consider using a registered agent if you prefer not to handle everything yourself.
They can make the process smoother by ensuring you receive important documents and helping you stay compliant with state requirements. Although this adds a bit to the cost, it can provide valuable support and peace of mind.
Who Provides the Best LLC Services in South Carolina?
There are a myriad of South Carolina LLC services from which to choose. Choosing the wrong one can affect your South Carolina LLC formation timeline—I know this from my experience using a few and researching a dozen over the years.
Here are some top-rated options you should consider:
Best South Carolina LLC Service | Google Rating | LLC Formation Cost | Registered Agent Fee |
---|---|---|---|
Northwest Registered Agent | 4.7/5 | $39 | Free for 1 year |
Doola | 4.6/5 | $0 (plus state fees) | $297/year |
Tailor Brands | 4.4/5 | $0 (plus state fees) | $199/year |
ZenBusiness | N/A | $0 (plus state fees) | $199/year |
Besides, the fact that other services bill you for their registered agent in the first year, and Northwest offers it for free, is a HUGE plus for me.
Northwest Registered Agent stands out in South Carolina LLC formation due to its commitment to transparency, customer service, and privacy. Using their address helps protect your personal information, making them a reliable choice.
How Much Does It Cost To Form an LLC in South Carolina?
Starting an LLC in South Carolina involves a few essential costs. The primary expense is the state filing fee for your Articles of Organization, which is $110 when filed online and $125 when filed by mail and covers the formation of your LLC.
Here’s a breakdown of the entire South Carolina LLC costs:
Requirement | Cost |
---|---|
Articles of Organization filing fee | $110 (mail), $125 (online) |
Name Reservation (optional) | $25 |
LLC Formation Service (optional) | $39 (via Northwest) |
Registered Agent Fee (optional) | $0 (via Northwest) |
Total Estimated Cost | $110 – 190 |
When forming a new company in South Carolina, it is ideal to budget about $110-$190 for the first year. Then, if you want to go further, you can get other bells and whistles like a virtual mailbox, custom website, trademark services, premium EIN services, etc.
The most significant (and essential) expense for every South Carolina business owner is filing the Articles of Organization, which costs $110 or $125, depending on the filing method.
Pros and Cons of Forming an LLC in South Carolina
South Carolina LLC Pros
South Carolina LLC Cons
6 Important Things To Do After Creating Your South Carolina LLC
Once you create your LLC in South Carolina, you must take critical steps to ensure everything runs smoothly. This section covers essential tasks like obtaining licenses, managing taxes, and establishing an online presence.
1. Research the Best Licenses and Permits for Your Business
Each business type may need specific licenses or permits to operate legally. Start by identifying what your LLC needs. For example, if you run a restaurant, you need food service permits and health department approvals.
Contact the South Carolina Secretary of State’s website or local business offices for guidance.
Consider these common license types:
- Business license: Required to operate in your local area.
- Sales tax permit: Needed if you sell taxable goods.
- Professional licenses: Required for certain professions like law or medicine.
Make sure to apply for all necessary permits early to avoid fines.
2. Create Business Accounts for Your South Carolina LLC
Maintaining separate business accounts is crucial for managing finances. Open your LLC’s dedicated business bank account to keep personal and business finances distinct. This separation protects your assets and simplifies tax filing.
When choosing a bank, compare account fees, services, and features.
You may also need to:
- Apply for a business credit card: It helps track expenses and can build business credit.
- Set up bookkeeping: Consider software or hire an accountant to manage finances.
Having clear financial records supports better decision-making and prepares you for tax season.
3. Understanding South Carolina Tax Requirements and Managing Your Taxes
Every LLC in South Carolina must meet certain tax obligations. Familiarize yourself with state and local tax requirements to avoid penalties.
You must also file your LLC’s South Carolina business tax application.
Your LLC might need to pay:
- State income tax: Depending on your business income.
- Sales tax: Applicable if selling goods or services.
- Employment taxes: If you hire employees, you must withhold income taxes.
Keep detailed records of all income and expenses. This practice will make filing smoother and help you spot any tax obligations.
Consider consulting with an accountant for tailored advice and to optimize your tax strategy. They can help ensure you meet all requirements and take advantage of available tax benefits.
4. Get Business Insurance for an LLC
Just as you wouldn’t leave your home without coverage, your LLC also needs the right business insurance to guard against potential risks and liabilities.
Insurance protects your company’s assets and ensures financial stability in case of unforeseen issues or legal claims.
Your insurance needs will vary based on your business operations.
For example, general liability insurance covers risks such as slip-and-fall accidents or property damage if your LLC operates from a physical storefront.
Conversely, if you run your business as a consultant and work remotely, you might only need professional liability insurance to cover potential service errors or omissions. Assessing your business needs helps you choose the appropriate coverage to protect your LLC.
Consult with an insurance agent to tailor your coverage. This investment can save you from significant out-of-pocket expenses in case of a claim.
5. Setup Your Business Online Presence (optional)
In today’s digital age, your business’s online presence can significantly benefit it. Create a professional website to showcase your products or services.
When building your website, consider these aspects:
- Domain name: Choose a memorable name that reflects your business.
- Social media profiles: Create accounts on platforms relevant to your audience.
- SEO: Use basic search engine optimization techniques to increase visibility.
An online presence can help attract customers and enhance your brand. Update your content regularly and engage with followers to build a loyal community.
South Carolina LLC vs. S Corp vs. Partnerships vs. Sole Proprietorship vs. Corporations
When you want to start a business in South Carolina, you have different choices for your business structure. Each type has its features and benefits.
Choosing the proper structure depends on your business needs and goals. Before deciding, you should consider factors like taxes, liability, and management.
Sole Proprietorship
A South Carolina sole proprietorship is the most straightforward way to start a business. Imagine you’re running a lemonade stand on your own. You make all the decisions and keep all the profits.
However, there’s no legal separation between you and your business. If your lemonade stand faces financial trouble or legal issues, your assets, like your car or home, could be at risk.
It’s easy to set up and manage, but it does leave you personally responsible for any business debts.
Partnership
A South Carolina partnership involves teaming up with one or more people to run a business.
Think of it as joining forces with a friend to open a café. You share the profits and responsibilities, and you both make business decisions.
However, like a sole proprietorship, each partner is personally liable for any business debts or legal issues. If the business encounters financial trouble, your assets could be at risk, too.
Partnerships are relatively easy to set up but require clear agreements between partners to avoid conflicts.
LLC (Limited Liability Company)
An LLC offers a blend of flexibility and protection.
Picture it as a protective umbrella over your lemonade stand. This structure separates your assets from your business, so if your LLC faces legal issues or debts, your personal belongings are generally safe.
LLCs are more formal than sole proprietorships or partnerships but offer management and tax treatment flexibility. They are ideal for small—to medium-sized businesses that want liability protection without the complexity of a corporation.
S-Corporation
An S Corporation is a more structured business form.
Think of it as a business where owners are shareholders, much like a small-scale company with multiple investors. It protects liability and allows profits to pass through to your tax return, avoiding double taxation.
This means you report the income and losses on your tax return, which can be beneficial for tax purposes. However, S Corps have stricter operational requirements and formalities compared to LLCs.
Corporation
A South Carolina corporation is the most complex structure, suitable for larger businesses aiming for significant growth. Imagine a big company with many shareholders.
A corporation offers robust liability protection and is a separate legal entity from its owners, meaning your assets are protected.
Corporations can raise capital more efficiently by issuing stock and can offer employee benefits. However, they come with extensive regulatory requirements, formalities, and paperwork, making them more suitable for businesses with significant resources and expansion plans.
My Final Thoughts: Forming an LLC in South Carolina
Starting an LLC in South Carolina is an exciting step toward bringing your business idea to life. Although it might seem like many steps initially, breaking them down makes the process more manageable and ensures you cover all the essential bases.
Starting an LLC in South Carolina involves a few straightforward steps:
- Choose a Name: Your LLC name must be unique and comply with state rules.
- Select a Registered Agent: Appoint a person or company to accept legal documents.
- File Articles of Organization: Submit this document to the Secretary of State.
- Prepare an operating agreement.
- Obtain an EIN: Ensure you are registered with the IRS.
- File a BOI Report
The filing fee for the Articles of Organization is $125 when filed online and $110 by mail.
South Carolina has no specific annual fee for LLCs, but you must be aware of state requirements and tax filings.
Following these steps can help you set up your LLC successfully. This structured approach helps you start your business on the right foot, and making clear decisions can lead to long-term success for your enterprise.
Learn More About Starting an LLC in South Carolina
If you need additional help to start an LLC in South Carolina, check out these valuable resources:
Frequently Asked Questions
How long does it take to get a South Carolina LLC, and can it be expedited?
If you file by mail, you can expect to receive your SC LLC approval within three to five business days. If you need it faster, South Carolina offers an online filing process that can be processed in one to two business days but costs $15 extra.
What if I already have an LLC in a different state from South Carolina?
If you already own an LLC in another state, you can apply for another one in South Carolina. You may consider registering your existing LLC as a foreign LLC in South Carolina if you plan to conduct business there.
Can You Form an LLC For Free in South Carolina?
Unfortunately, you cannot form an LLC for free in South Carolina. The filing fee for Articles of Organization is $110, which you must pay during the application process.
Can I form an LLC in South Carolina without a lawyer?
Yes, you can form an LLC without a lawyer. Many people handle it themselves. To receive official documents, you only need a registered agent with a physical address in South Carolina.
What is the process for registering an LLC in South Carolina online?
To register online, visit the Northwest Registered Agent website. The LLC filing procedure, which will guide you through submitting your Articles of Organization, is also available there.
Can I change my registered agent in South Carolina?
You can change your registered agent in South Carolina after forming your LLC. You must file the “Statement of Change of Registered Agent” form with the South Carolina Secretary of State.
How do I change my South Carolina LLC’s name?
To change your LLC’s name, you must file Articles of Amendment with the South Carolina Secretary of State. This requires a small fee, and the new name must be unique.
How do I renew my South Carolina LLC?
In South Carolina, LLCs do not require annual renewal like in other states. However, you must ensure you file any required reports and maintain good standing by paying any fees as needed.
How do I dissolve an LLC in South Carolina?
You must file Articles of Dissolution with the Secretary of State to dissolve your LLC. This formally ends your LLC’s existence and must include information about settling debts.
How do I add a member to a South Carolina LLC?
To add a member, you should update your LLC’s operating agreement to include the new member. Depending on your specific situation, you may also need to file an amendment to the Articles of Organization.
How do I add a DBA to an LLC in South Carolina?
You can add a “Doing Business As” (DBA) name by filing for a fictitious name with the county where your LLC operates. This typically involves filling out a simple form and paying a fee.
Can a minor own an LLC in South Carolina?
Yes, a minor can own an LLC in South Carolina. However, consulting with a legal expert is advisable to ensure compliance with any specific regulations or requirements.
Does LLC expire in South Carolina?
An LLC in South Carolina does not expire if it complies with state requirements, such as filing annual reports, if necessary, and paying fees. It can remain active indefinitely.
Can a non-resident open an LLC in South Carolina?
Yes, non-residents can open an LLC in South Carolina. They must have a registered agent with a physical address in the state for official communication.
Can I buy a house or car with my LLC in South Carolina?
Yes, you can buy a house or car using your LLC. The LLC must be the entity making the purchase, which might also provide some legal protections.
Can you have multiple businesses under one LLC in South Carolina?
Yes, you can operate multiple businesses under one LLC. However, this may complicate financial reporting and liability, so consider having separate LLCs for different ventures if needed.
Is South Carolina a good state to form an LLC? Is it worth it?
South Carolina has favorable laws for LLCs. The state offers flexible management structures and protection for personal assets, making it a good option for many business owners.
Can one person form an LLC in South Carolina?
Yes, a single person can form an LLC in South Carolina. This type of LLC is commonly known as a single-member LLC and is allowed under state law.
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