- Step 1. Naming Your South Carolina LLC
- Step 2. Choosing a Registered Agent
- Step 3. File Your Articles of Organization
- Step 4. Create an Operating Agreement
- Step 5. Get an EIN/Tax ID Number
- Step 6. Keeping Your LLC Running
- South Carolina LLC Resources
- Final Thoughts
- South Carolina LLC FAQs
Step 1. Naming Your South Carolina LLC
As you start to think about what name you would like to have for your South Carolina LLC, there are some things to keep in mind.
Legally Required Designation
Under South Carolina LLC law, the name that you choose for your LLC must contain the phrase “limited liability company” or one of the abbreviations below:
- Limited Company
Before filing any documents to establish your LLC, you should search the South Carolina business database for available names to be sure that you have chosen a completely unique name for your business that doesn’t copy or infringe on the names of any other South Carolina LLC or DBA name.
If you want to reserve an LLC name ahead of time, you will need to file the Application to Reserve a Limited Liability Company Name with the South Carolina Secretary of State; this application will hold your LLC name for up to 120 days, but it costs an extra $25 to file and will need to be mailed in to the address found on the form.
When choosing your LLC name, you may also want to go ahead and secure a domain name for your business. Even if you don’t want a business website at first, purchasing the domain name ahead of time can help preserve it for future use and save you stress.
There are several words that are restricted from use in your LLC’s name as they run the risk of confusing your business with a government entity. These words include, but are not limited to:
- State Department
Your LLC name cannot include words like “Attorney”, “Bank,” or “University”, and certain designations may require the presence of an accordingly licensed professional in your business and additional paperwork
Using an Assumed Name (DBA)
In South Carolina, it is possible for you to operate your LLC’s business under an assumed name. This means that while your LLC has an official, registered name, you can present the LLC to the public under a fictitious name.
This is also called a DBA or “doing business as” name. It can be helpful for business owners who registered their LLC with their real name but don’t want the public knowing their full real name.
If you wish to use an assumed name for your LLC, you will need to register the name with the South Carolina county clerk office in the areas you are doing business in. The filing fee and required documentation can vary by county, so you will need to do research on the county clerk’s website to find all of the necessary information.
This article can also give you some tips on using a DBA name in South Carolina.
Step 2. Choosing a Registered Agent
Also called an Agent for Service of Process, every LLC in South Carolina must have a registered agent appointed. The registered agent will be the individual or business entity responsible for accepting all tax documents, official notices, and government communications, acting as a contact point between your LLC and the state of South Carolina or federal agencies as necessary.
Your registered agent can be any person or entity, including yourself or a registered agent service, that is authorized to do business in South Carolina. As long as the individual or business has a South Carolina street address and is available during regular business hours, they are eligible to be your registered agent.
Step 3. File Your Articles of Organization
The Articles of Organization are what officially establish your LLC as a legally running business entity. There are several things that need to be included in the Articles of Organization, and your LLC will not be approved for formation without them.
Make sure to include all of this information on your Articles of Organization and double-check it before filing the form.
- Your LLC’s full name
- Your LLC’s registered agent name and address
- The LLC’s principal office address
- Whether your LLC is member-managed or manager-managed. Include the manager’s name and address if manger-managed
- The end date of your LLC, if it isn’t perpetual
- The LLC’s desired effective date, if you want don’t want the LLC to be effective upon filing
- Names and addresses for a minimum of one LLC organizer
- The signature of every listed organizer for your LLC
You must complete the Articles of Organization and file them with the South Carolina Secretary of State. There is a $110 filing fee for this document, though there may be additional fees for online credit/debit card processing or expedited services.
You can file the Articles of Organization online by visiting the Secretary of State’s website and selecting the “new business” option listed there. The website will guide you through the steps and once you enter all of the required information, you will be prompted to pay and file.
If you want to file your Articles of Organization by mail, you will need to print out the form, fill it in, and then mail it to the address below. You must include a check made out to the South Carolina Secretary of State for the filing fee of $110 in your envelope.
South Carolina Secretary of State’s Office
Attn: Corporate Filings
1205 Pendleton Street, Suite 525
Columbia, SC 29201
Step 4. Create an Operating Agreement
Although an operating agreement is not required by South Carolina, it is a good idea to create one for your LLC anyway. An operating agreement will set out guidelines for how your LLC is managed, members’ rights, and what to do in the case of a lawsuit or other legal issue.
It can also help you open a bank account, secure funding for your LLC, and prove that your LLC is a legitimate business entity, further protecting your personal assets and finances.
If you do not have an operating agreement, South Carolina will dictate how your LLC is managed in the event of a dissolution or lawsuit, and this might not be in your best interests.
You will not file your operating agreement with the state, but you should keep it on hand and treat it like any other important business document.
Step 5. Get an EIN/Tax ID Number
After your LLC has been established, you will need to get a Tax ID number, also known as an EIN (Employer Identification Number). This number is required by the IRS for LLCs that are multi-member, even if there are no employees, or for single-member LLCs that choose to hire employees or opt to have their business taxed as a corporation.
The EIN will help the IRS identify your business on tax documents and will act similar to a social security number for your LLC. You will need it to hire employees, file your federal or state taxes, and most banks will require it if you are to secure loans or open an account with them.
Filing for your EIN through the IRS is completely free, and you can fill out the application either online or through the mail. If don’t have a social security number you will need to apply for the EIN through the mail—this will be a required step for foreign filers.
The free EIN application can be found on the IRS website here. This is the quickest way to request the EIN, and you will receive your number as soon as the application is completed.
If you want to request your EIN by mail, you can fill out this form and mail it to the address below. International EIN applicants should leave section 7b blank if they do not have a social security number. After mailing the form off, you have the option of calling the IRS at (267) 941-1099 to follow up on your application.
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Step 6. Keeping Your LLC Running
Once you have filed your Articles of Organization, there are a few things that you will need to keep up with to ensure that your LLC is running smoothly and legally.
Pay Annual Registration Fees
South Carolina does not require LLCs that are being taxed as a sole proprietorship or a partnership to file annual reports or pay annual registration fees.
However, if you opt to have your LLC taxed as an S Corporation or a C Corporation, you will have to file Form CL-1 with the South Carolina Department of Revenue within 60 days of you filing your articles of organization. There is a $25 fee with this form.
Separate Your Business Finances
Though it isn’t required to keep a business bank account for your South Carolina LLC, it is a good idea to do so. Keeping your LLC’s finances and assets separate from your personal ones is a great way to indicate that your business is a completely distinct, legally operating entity.
It can also help protect your personal assets and finances in the case that your LLC is sued. Your LLC’s assets will be the ones named in the lawsuit and your personal ones will be safe.
When opening up a business credit or debit account, you will need to have your EIN (when applicable), your Articles of Organization, and possibly your Operating Agreement on hand. Different banks require different documents, so make sure to check with the bank what is needed before showing up to open an account.
You should also be careful to select a bank account type that will be suited for your business. Certain accounts may require minimum amounts or have credit spending requirements that may or may not benefit your LLC. Take time to compare and contrast available accounts to see what is best for your LLC’s needs before opening one.
Keep up With Federal and State Taxes
In order to keep your LLC running, you will need to keep up with South Carolina state taxes and any federal taxes that you may own. We talk more about these requirements below.
South Carolina State Business Taxes
LLCs that are taxed as S or C Corporations will have to file either Form SC 1120 or Form SC 1120S annually to pay the state’s 5% flat fee corporate tax. These forms are due to be filed with the Department of Revenue by the 15th day of the third month after the end of your LLC’s fiscal year.
For businesses that count the end of the year (December 31st) as the end of their fiscal year, this is March 15th. You will need a state tax ID number, which can be applied for here, before filing either of these forms.
If your LLC is a sole proprietorship or a partnership, however, it will not be subject to any state business taxes.
South Carolina Sales Taxes
If your LLC will be involved in selling goods or services, you will be required to collect sales and use tax and report this to the state, making payments as necessary. You will register for this tax with the Department of Revenue, where you can also pay your taxes online.
State Employer Taxes
If your LLC has employees, you will be required to pay state withholding and unemployment insurance (UI) taxes.
To pay your state employer withholding taxes, you will need to register with the South Carolina Department of Revenue online. State unemployment insurance taxes can be registered and paid for with the South Carolina Department of Employment and Workforce.
Both of these websites will also provide additional information about when taxes are due and how to go about calculating these employer taxes.
Federal Tax Requirements
You may also be required to pay federal taxes, so make sure to check with a professional accountant or financial advisor if you are confused about your LLC’s tax structure and federal obligations.
What you pay in federal taxes depends on the type of tax structure that your LLC has established. Sole proprietorships and partnerships will most likely be expected to file an individual tax return with the IRS, while corporations will need to pay additional corporate taxes. If you want to know more about the different tax structures available for your LLC, check out this article.
If you want your LLC to be taxed as a corporation, such as an S Corporation or a C Corporation, you will need to fill out IRS Form 8832 to be treated as a C-Corp or IRS Form 2553 to be treated as an S Corporation. After the form has been processed, you will be expected to file a separate corporation tax return with the IRS each year.
When being taxed as a sole proprietorship or partnership LLC, you should be aware that you will most likely be expected to pay self-employment tax at a rate of 15.3% in addition to any income tax.
You can read more about this tax on the IRS website. Keep in mind that it may be necessary to pay estimated taxes quarterly to avoid fines from the IRS at the end of the fiscal year.
Acquire Necessary Permits and Licenses
Depending on the type of business that your LLC conducts, you may or may not have to acquire an additional state or business permit or license. There is no statewide business license requirement in South Carolina, but individual cities or counties may have different rules and requirements.
You can check the South Carolina Business One Stop for more information regarding local licensing requirements. Using this website, you will also be able to find out if your business falls under the umbrella of professions that need specialized licenses, like financial or legal services, and what the necessary requirements are.
Similarly, additional federal permits or licenses may be required depending on the type of business your LLC is. This may be things like health or food service permits. You can find out more information about federal licensure requirements through the US Small Business Administration’s website.
South Carolina LLC Resources
This list of South Carolina LLC resources can help you out and provide a quick reference guide as you start to set up your LLC in the state.
- Available business name search
- Domain name search
- Reserve an LLC name
- Online file Articles of Organization
- IRS EIN free application
- Form CL-1 for LLCs electing to be taxed as a corporation
- Form SC 1120 or Form SC 1120S for filing state corporate tax
- Apply for a state tax ID number
- South Carolina Department of Revenue
- South Carolina Department of Employment and Workforce
- IRS self-employment tax information
- South Carolina Business One Stop
- Small Business Administration Website
For many small business owners in South Carolina, it can be overwhelming to start thinking about establishing an LLC with your existing or new business. However, the steps to creating a legally functioning LLC are simpler than you think, and once you get started you will surely be able to move through the process easily. As long as you pay careful attention to each of the steps and the requirements needed to keep your LLC operating smoothly and legally, you’ll have your business up and running in no time at all.
South Carolina LLC FAQs
Read through these frequently asked questions about South Carolina LLCs to discover the answer to any lingering questions that you may have.
It will cost you $110 to file the Articles of Organization and officially establish your LLC in South Carolina. You may end up paying an additional $25 to reserve your LLC’s name for 120 days before filing, and there may be additional fees for expedited services and mailing costs.
The cheapest way to start your South Carolina LLC is to file the Articles of Organization for $110 online, without reserving an LLC name ahead of time or paying for any expedited services.
How much your South Carolina LLC will have to pay in taxes depends on its unique tax structure. Sole proprietorships and partnerships will not pay any additional state business tax, but LLCs that are taxed as corporations will be subject to an extra 5% business tax, in addition to any federal taxes owed.
You may also end up paying more taxes if your LLC has employees, as both withholding and unemployment insurance taxes are required from you.
In South Carolina, it is not required for you to file an annual report or pay an annual registration fee, as long as your LLC is taxed as a sole proprietorship or a partnership. LLCs that are taxed as corporations will have to file Form CL-1 and pay $25 within 60 days of establishing their LLC.
It can take anywhere between 1 and 14 days to fully establish your South Carolina LLC. Online filing has the quickest turnaround and expedited services can have your LLC running in a day or two. Filing by mail takes longer, and it may take up to 14 days for your LLC to be fully established this way.
If you are finished doing business under your LLC, you will need to file the Articles of Termination with the Secretary of State. You can do this by printing and filling out the form found here, before mailing it to the address below. There is a $10 filing fee associated with this form.
South Carolina Secretary of State’s Office
Attn: Corporate Filings
1205 Pendleton Street, Suite 525
Columbia, SC 29201