Forming an LLC (Limited Liability Company) in South Carolina is easy and affordable. The following are few procedural steps on how to start an LLC in South Carolina. LLCs can be formed in two ways, domestic and/or foreign. If you are planning to set up an LLC in states other than South Carolina, visit How to Start an LLC.
On this page, you’ll learn about the following:
- Why an LLC in South Carolina
- How to Start a South Carolina LLC
- After Starting your South Carolina LLC
- 3 Top Businesses of South Carolina
Why an LLC in South Carolina
In the last decade, it is noticed that the GDP of South Carolina has jumped manifolds, and the reason behind this is the businesses it is catering to. Now when we think of reasons why so many LLCs have shifted to the state, one fact is clear that the 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, then this incentive program is made for you. There are some incentive programs in this program, like the job development program in which an entrepreneur will be provided a credit on the basis of jobs that they are creating. This fund will help out a business in leveling their cost of expansion of the business.
Along with that, a property tax exemption is also available under this program under which 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 the form of tax credits for the jobs they are creating at the altar. The range credit is from $1000 to $9000, which depends on the job that 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 LLC 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 for the development of their company and the state also.
- 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, then they get a tax rebate on that property for at least 5 years.
How to Start a South Carolina LLC
Suppose you’re planning to invest in some profitable business or maybe about to set up your business in South Carolina. In that case, forming an LLC in South Carolina is the simplest option for you.
An LLC or a Limited Liability Company a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. This section gives you a step-by-step guide on How to Start an LLC in South Carolina.
Step 1: Decide a Name for Your LLC
If you are to start an LLC in South Carolina, the first thing you do is decide on a business or company name, and how to name your LLC may be tricky. Thus, you have the option to choose a name that complies with the South Carolina business naming requirements. It must also be easily searchable for potential clients. Here is a step-by-step guide to follow when naming your South Carolina LLC.
Why do you need a proper business name?
If you want your LLC to have special identification, your company name is essential. However, many people face lots of issues by avoiding focus on choosing a business name for their LLC business formation filings.
Because of this, here are some of the major benefits of choosing the best LLC corporate names.
- To help establish a company’s presence in the market, a proper business entity type will help you. This also creates a new identity that will resemble your LLC.
- After you’ve properly chosen the name for your LLC, you will have no problems finishing the registration process.
- You can only get the EIN number when you have your name registration certificate with you.
What are the requirements when deciding a name for your LLC?
A name search is vital to make sure your business’ name is unique. Check the availability of your name with Business Entity Search on the South Carolina Secretary of State’s website. Reserve the name by completing the Name Reservation Request Form for Domestic Entities.
- Don’t include words that could confuse people about your company. Words like ‘treasury, state department.’
- You should also avoid restricted words like ‘bank, attorney, university,’ because they may require a lawyer and more paperwork.
- As for a business website and your URL name, check if your name is still available for domain use with NameCheap.
Reserve a business domain
Even if you don’t have plans to set up a website today, it will help if you buy a domain to avoid others from using your name for their website, so do visit NameCheap for your domain name and Kinsta for web hosting.
If you have decided on your URL name and have reserved it, set up a professional email account with Google GSuite.
Step 2: Assign a Registered Agent in South Carolina
A registered agent, or business entity, is a person that will act or work on your behalf. This person or business will receive significant tax forms, legal documents, a notice of lawsuits, and other official government correspondence in South Carolina. Choosing South Carolina-registered agents for your LLC is required.
Make sure your registered agents are residents of Alabama. It could also be a business. Here are the recommended agents and employees for you:
These five LLC formation services are recommended agents’ registered services as they are authorized to conduct business in South Carolina. Compare them to check the best yet cheapest option for you. Besides, they can guarantee you professional service because they have been in the business for years.
Step 3: File Articles of Organization in South Carolina
A Certificate of Name Reservation is needed to file Articles of Organization, as other states call it. You need to make reports of this certificate with the South Carolina Secretary of State, which costs $110. You may file them online or by mail.
This Certificate of Formation is a legal document needed to form your business officially. It will indicate details about your LLC in South Carolina, like if it is a member-managed or managers-managed.
Before you start filings, you must already have your LLC name and registered agents or employees. You will attach a copy of your Name Reservation Certificate along with a list of the services that your South Carolina LLC will offer.
How to File Online
Go to the Secretary of State Online Service. Select “non-subscriber.” Fill out the online form. The website will alert you if your county does not support online filings after selecting your principal county
Step 4: Create Your South Carolina LLC Operating Agreement
An operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
Starting an LLC in South Carolina does not require you to have an operating agreement, but it is ideal to have one that contains all your details of business operation.
Step 5: Filing a South Carolina LLC EIN
The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify types of business for tax purposes. It is like a Social Security number dedicated to a business.
It is also called a Federal Employer Identification Number (FEIN) or a Federal Tax Identification Number (FTIN). You will need this number for tax filing and to determine tax classification options.
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935
After Starting your South Carolina LLC
After forming your LLC, there are still some things that you will need. Take note of the following:
- Get a company business account
- File South Carolina business permits & licenses
- Get liability for business insurance with coverage for employees
- File a South Carolina LLC annual report or biennial report
- Already existing LLCs that wish to operate in South Carolina must register as a foreign South Carolina LLC.
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.
3 Top Businesses of 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.
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 that is deployed under agriculture in the state is 4.9 million hectares which are 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.
There are a wide variety of automobile companies present in the state, which covers the task of manufacturing to supplying automobile vehicles and their parts. If you look at the history of the sector, 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 that 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.
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 business in the state are:-
- Car renting business
- Uber driver
- WordPress developer
South Carolina LLC Formation Review
Time needed: 1 hour and 5 minutes.
Just to recap, here are the easy steps again when forming an LLC in South Carolina. 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 include the phrase “limited liability company,” or one of its abbreviations (LLC or L.L.C.).
- Choose a registered agent
In South Carolina, it is mandatory to select a registered agent for your LLC. You can check out our list of our 5 Best LLC Services in the United States.
- File a formation certificate
Filing a formation certificate is necessary when forming an LLC. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create operating agreement
An operating agreement is not a strict requirement but something encouraged when you start an LLC.
- 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.
A “domestic LLC” is one that conducts business in a state where it was formed. Meanwhile, a “foreign LLC” is an existing LLC that extended business to another state.
For Domestic LLCs, it is vital to have a Certificate of Name Reservation and Certificate of Formation. For the foreign LLCs, you must have a Certificate of Good Standing.
The cost to form an LLC varies per state.
Seldom do L.L.C.s use D.B.A. or a ‘Doing Business As’ name nor a fictitious business name. However, if you want to have one, you make read more about DBAs here.
This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
>Your name should have “L.L.C. or LLC” or the phrase “limited liability the business.”
>Do not include words that could create confusion between your LLC and any government business.
>Words like ‘bank, attorney, university’ are restricted as well.
>Lastly, your name should distinguish from other limited liability corporations, limited partnerships, or registered limited liability partnerships.
Typically, you can file your LLC name online or by mail. Check with the state where you will set up your LLC name. Take note that the fees for business names may also vary per state.
As for a website and your URL name, check if your name is still available for URL use with NameCheap to see if your name is available as a web domain. Even if you don’t have plans to set up a website today, it will help if you buy a URL. Buying it can help to prevent others from getting your name; check out WPEngine, Kinsta, and GoDaddy for hosting and building your website.
No. Never mail these documents or payments to the Secretary of State directly.
The reason you might need an E.I.N. is that it would help for three reasons:
>Opening a business bank account
>Filing and managing federal and state taxes
>Hiring employees or agents
You are not required 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.
International EIN applicants do not need an SSN to get an EIN.
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