How to File an LLC in South Carolina

Whether you’re starting a new business or are ready to make your successful side hustle official, many entrepreneurs choose to form an LLC to register their business with the state. 

Even though you can form other types of business, such as an S Corp or C Corp, an LLC offers personal liability protection and considerable flexibility for small business owners, making it the preferred choice for many. 

South Carolina is a small business-friendly state and a great place to start an LLC. To form your South Carolina LLC, you must go through a filing process with the Secretary of State, which involves multiple steps and essential paperwork. 

Starting a South Carolina LLC may appear complicated initially. Still, in this guide, you’ll find a step-by-step breakdown of everything you need to do to successfully form and operate your LLC in compliance with state law. 

Key Takeaways:

• To form your South Carolina LLC, you must go through a filing process with the Secretary of State, which involves multiple steps and essential paperwork.

• Unlike many other states, you’re not required to file an annual report to keep your business in good standing, and multiple business and tax incentives are available.

• Having an LLC in place protects you from personal liability in case of litigation, such as a lawsuit or debt collection. 

What Is an LLC Formation?

LLC — an abbreviation for “limited liability company” — is a business structure that offers essential benefits to small businesses. Compared with an S or C Corp, it’s also significantly more flexible. Here are the main advantages of LLC formation. 

LLC Protects Your Personal Assets 

Once you form your LLC, your personal and business assets become separate. Having an LLC in place protects you from personal liability in case of litigation, such as a lawsuit or debt collection. 

For example, if someone sues your business, only your business assets can be seized[1]. Your personal assets, such as your property and monetary funds, are under liability protection. 

It works the other way around, too. If someone sues you personally, your LLC assets are safe from litigation, and only your personal assets are on the line. 

LLC Gives You a Flexible Tax Status

Since the government sees LLCs as a “disregarded entity,” LLC owners can choose how they want their business to be taxed. For tax purposes, your LLC can be seen as a sole proprietorship (only for single-member LLCs), a partnership (only for multi-member LLCs), an S Corp, or a C Corp. 

Many LLC owners take advantage of pass-through taxation, which is when you report your LLC profits and losses on your personal income tax return instead of filing a separate return for your business. 

The pass-through structure helps you avoid double taxation, which is when you’re taxed twice, first on your LLC income and then on your personal income. 

You Have Discretion Over How Your LLC Is Structured 

Your LLC can be either member-managed or manager-managed. 

Your LLC is member-managed if LLC’s owners — otherwise known as members — run its day-to-day operations. If you appoint a manager to run your business, your LLC will be manager-managed. 

You can also create an operating agreement to govern your business. It’s a vital formation document that outlines rules for how your LLC will function, such as how often members and managers need to meet, voting rights, and steps to resolve disputes. 

How Do You Form an LLC in South Carolina? 

LLCs are recognized under state law, and each state has a slightly different process for LLC formation. To start an LLC in South Carolina, you need to file your paperwork with the South Carolina Secretary of State and cover a state fee. 

There are multiple benefits to forming an LLC in South Carolina, including business incentive programs and the fact that South Carolina doesn’t require you to file an annual report and pay an annual filing fee. Depending on the nature of your business, there are also sales tax incentives and exemptions that you may qualify for. 

Is It the Right Time for Me to Form a South Carolina LLC? 

Some entrepreneurs wait to start an LLC until their business is more established. This is a common misconception. The sooner you start an LLC, the sooner you’ll be able to take advantage of its benefits. You’re not required to have a successful business to incorporate. 

Step-By-Step Guide to Starting Your South Carolina LLC

You must follow a state-specific process to form an LLC in South Carolina. In this section, we’ll give you step-by-step instructions on how to form your LLC with the South Carolina Secretary of State and successfully run it for years to come. We’ll cover: 

• How to choose a name for your South Carolina business

• How much you can expect to spend on filing fees

• Essential requirements for your South Carolina LLC

• What kind of paperwork you need to fill out 

Carefully follow the steps below to incorporate your South Carolina LLC correctly and successfully. 

Step 1: Choose a Business Name for Your South Carolina LLC

The first step to forming your South Carolina business is to choose your LLC name. You have almost complete creative freedom when choosing your company name, but there are a few requirements you need to keep in mind. 

1. Your LLC name must differ from other business names already registered in the state. The name of the business entity not being available for use in South Carolina is the most common rejection reason for business filings in the state[2], so be sure to do a name search to verify availability. 

2. Your business name must include the words “limited liability company” or “limited company” or one of the acceptable abbreviations (LLC, L.L.C., LC, L.C., or LDT). 

3. Your South Carolina LLC name can’t be misleading or inappropriate. Don’t include words that suggest a government affiliation, such as “Treasury” or “State Department.” 

Once you find a business name you like, you can reserve it with the Secretary of State for $25 until you’re ready to form your new business. Name reservations are valid for 120 days. 

Most businesses will need a website at some point, so it’s a bright idea to ensure your domain name is available before registering your business with the state. 

What Is a DBA? 

You don’t have to keep using your official LLC name to conduct business forever. You can also file for a doing business as (DBA) name in the county where your company operates. Each country has its own DBA application process, so check with your local County Clerk. 

Do I Need to Trademark My South Carolina LLC Name? 

Some business owners decide to trademark their LLC name on a federal level to secure their exclusive right to use it. Not trademarking your business name means that someone can use your name to start a business in another state. 

For example, if you run a “Rise & Shine Coffee Shop” in South Carolina, someone across the state border in North Carolina or Georgia can also start a “Rise & Shine Coffee Shop.”

Applying for a federal trademark is a smart way to protect your brand identity and prevent people from imitating your brand. 

However, your LLC filing should come first. In most cases, having your LLC be the trademark’s owner makes sense, and it needs to be established as a legal entity first. 

Step 2: Fill Out South Carolina Articles of Organization

To officially incorporate your LLC in South Carolina, you must file Articles of Organization. It’s a principal formation document establishing your limited liability company as a business entity. 

Your South Carolina Articles of Organization must include the following information: 

• LLC name, address, and mailing address

• LLC’s registered agent’s name and address

• Names and addresses of the LLC’s organizers (or at least one of them)

• Whether your LLC will be member-managed or manager-managed

• If manager-managed, names and addresses of the managers

• LLC term date or duration 

• Your LLC effective date (or an indication of delay) 

• Any additional information that is foundational to your LLC 

The information you provide in your Articles of Organization is crucial, so spend enough time filling out this formation document. 

How Much Does It Cost to Start an LLC in South Carolina?

You must include your LLC filing fee with your Articles of Organization. It costs $110 to start an LLC in South Carolina. South Carolina doesn’t require annual reports to keep your LLC in good standing, so you typically won’t have to worry about covering state fees every year. You may have to pay other state taxes depending on your LLC’s tax status. 

If you’re filing for a foreign LLC (in other words, if you have an existing business you initially registered in another state and you’re expanding to South Carolina), the filing fee is still $110. 

How Long Does It Take to Form an LLC in South Carolina?

If you file your Articles of Organization online, they will process your filing within 24 hours. If you mail your application, the South Carolina Secretary of State typically takes two to three business days to process, depending on the workload volume. 

Can I Change My Articles of Organization?

Your Articles of Organization is a foundational legal document, but it doesn’t mean it can’t change. If you need to make any alterations, such as providing a new address or switching over to a new registered agent, you can file an Articles of Amendment to keep your information current. 

Step 3: Hire a South Carolina Registered Agent

Every South Carolina LLC must have a designated registered agent (RA). Your registered agent’s primary responsibility is to receive legal documents and essential correspondence on behalf of your business. Some examples of the kind of mail your registered agent may have to obtain include IRS letters and service of process notices. 

As long as you’re over 18 and have a South Carolina street address (not a P.O. box), you can serve as your own registered agent. However, many business owners decide to hire a South Carolina registered agent because going with a professional service offers significant advantages. 

Here’s what you need to know about being your own registered agent vs. hiring a registered agent service. 

Hiring a Registered Agent Service Gives You More Freedom 

South Carolina state law requires your registered agent to be present at their indicated street address during business hours. If you’re serving as your own registered agent, you won’t be able to leave your office or home (if you run your business from home) Monday through Friday, 9 am-5 pm. 

Hiring a registered agent service means you’ll be free to structure your days however works best for you instead of being tied to one location for most of the day. 

Get a Registered Agent Service for Your Peace of Mind

Misplacing or losing documents can significantly and negatively impact your business, not to mention bring on potential legal consequences. As a busy business owner, losing track of papers is easy because you always have a never-ending to-do list. 

Having a registered agent service to take care of your essential documents means that you’ll be able to focus on running your business knowing that your mail is taken care of and there’s nothing significant missing your attention. 

Being Your Own Registered Agent Compromises Your Privacy 

Your registered agent’s street address is public record, which can raise privacy concerns for some business owners—having your address easily accessible to anyone online is especially concerning if you run your business from home. 

Working with a professional registered agent protects your privacy and prevents people from showing up at your place of business unannounced. 

How Do I Choose a South Carolina Registered Agent? 

Swyft Filings offers a registered agent service in South Carolina to help you stay on top of your formal correspondences and keep your LLC in good standing. For just $149/quarterly, you’ll get a secure and reliable service, an online dashboard to access your mail whenever you need to quickly, and compliance alerts so you never miss essential documents or deadlines.  

Step 4: Create an LLC Operating Agreement

An operating agreement is an LLC formation document that outlines how your business entity will operate. Even though South Carolina law doesn’t require you to create an LLC operating agreement, it’s an essential document for business owners to have on file to maximize their control over their LLC. 

You can create an operating agreement whether you’re running a member-managed, manager-managed, multi-member, or single-member LLC. The state will apply default law to govern your operations and resolve disputes if you don’t have a written operating agreement. 

Information you can include in your operating agreement includes: 

• Standard operating procedures and protocols for your LLC

• Guidelines on dispute resolution

• Responsibilities and rights of LLC owners 

• Rules for dissolution, division of profits and losses, transfer of ownership, voting rights, and other important matters

If you’re unsure what to include in your operating agreement, Swyft Filings can help you create an operating agreement as a part of our LLC formation service. 

Step 5: File for an Employer Identification Number and Business Licenses

You can consider your EIN — or employer identification number — as a social security number for your South Carolina business. It’s a nine-digit number that the Internal Revenue Service uses to identify your business for tax purposes. 

South Carolina doesn’t require you to apply for an EIN if your LLC doesn’t have employees. You must apply for an EIN on the IRS’s website to hire team members. You will also need an EIN to open a business bank account. 

Do I Need South Carolina Business Licenses to Operate My LLC? 

There is no statewide licensing requirement in South Carolina. However, your county or municipality may require a business license, so checking with local authorities before operating your LLC is essential. 

You may need to obtain a sales tax license from the South Carolina Department of Revenue, a liquor license, a food permit, or a taxi license, among others. It depends on the nature and location of your business, so the best practice is to always check with your local state office first. 

Let Us Handle Your LLC Paperwork

Forming a South Carolina LLC can quickly turn complicated and overwhelming. As a busy entrepreneur, you want to get your business up and running as soon as possible without wasting time filling out paperwork and ensuring you’re not overlooking anything. 

We can help you apply for your LLC in as little as ten minutes. We’ve formed over 250,000 small businesses with our fast and convenient process that removes the complexity of LLC formation. 

Simply answer a few questions about your business, and we’ll take care of all the necessary paperwork and send you your complete LLC package as soon as the South Carolina Secretary of State approves it. 

FAQs:

How much does it cost to set up an LLC in South Carolina?

At the very least, you can expect to spend $110 on forming a South Carolina LLC. You must cover this fee when you file your Articles of Organization to incorporate your business with the state officially. If you want to reserve or trademark your LLC name or need to apply for business licenses, you’ll have to cover additional costs. 

How is an LLC taxed in South Carolina?

One of the benefits of a South Carolina LLC is that you can choose how you want your business to be taxed. Your LLC can be taxed as a sole proprietorship (for single-member LLCs), a partnership (for multi-member LLCs), an S Corp, or a C Corp. 

What are the benefits of a South Carolina LLC?

South Carolina is a small business-friendly state and offers various benefits to LLC owners. Unlike many other states, you’re not required to file an annual report to keep your business in good standing, and there are multiple business and tax incentives available, depending on the nature of your business. 

How do you dissolve an LLC in South Carolina?

To dissolve your South Carolina LLC, you must file an Articles of Dissolution with the Secretary of State. If you’re dissolving a foreign South Carolina LLC, you must file a Certificate of Cancellation of Authority to Transact Business[3]. In both cases, the cost is $10. 

Bibliography:

1. U.S. Small Business Administration. Choose a Business Structure. Accessed April 11, 2024.

2. South Carolina Secretary of State. FAQs About Business Entities. Accessed April 11, 2024.

3. South Carolina Secretary of State. Business Entities Online. Accessed April 11, 2024.