Having an LLC in SC is a better and cheaper option than having other business structures. A limited liability company (LLC) reduces the owners’ personal liability and protects their personal assets. One can start an LLC in two ways, domestic LLCs or foreign LLCs (LLCs in more than one state). By following some basic steps, you can easily form an LLC in South Carolina.
On this page, you’ll learn about the following:
- How to Start an LLC in South Carolina
- After Starting your South Carolina LLC
- South Carolina Foreign LLC
- Why an LLC in South Carolina
- Top 3 Businesses in South Carolina
- South Carolina LLC Formation Review
How to Start an LLC in South Carolina
An LLC or a Limited Liability Company is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection. 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
Deciding on a business name is the first step to start an LLC. In South Carolina, before you name your LLC, it is important to note a few things. Firstly, make sure the name is available to use. If the name is available, then check if the name complies with all the South Carolina business naming requirements. Once you pass through them, you can successfully name your business.
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.
Requirements when deciding a name for your LLC
LLC Name Search: A business name search is required to check if the desired name is available or not. If the name is available then the business owner has to fill up a name reservation form and send it to the Secretary of State, South Carolina. To do the name search, one has to visit the Business Entity Search page on the official Secretary of State website. Send the name reservation form to the below address by mail to reserve your LLC name in South Carolina. The cost of a name reservation is $25.
Important Quick Links:
Secretary of State
Attn: Corporate Filings
1205 Pendleton Street Suite 525
Columbia, SC 29201
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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 forms, formation documents, any internal document, a notice of lawsuits, and other official government correspondence in South Carolina. Choosing a South Carolina registered agent for service of process for your LLC is required.
Make sure your registered agents are residents of South Carolina with a physical street address. It could also be a business. Here are the recommended agents and employees for you:
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$49 + State Fees
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Note that availing of the services of professional registered agents would be your best option since you are guaranteed that whoever is handling your legal affairs knows their stuff well. You will enjoy peace of mind and focus only on running your business, as the ‘professionals’ take care of all legal matters.
These LLC formation services are recommended registered agent 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. LLC cost in South Carolina includes other taxes and fees. You may file them online or by mail.
This South Carolina 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. To know more about online filing, visit the South Carolina Certificate of Formation.
Step 4: Create Your South Carolina LLC Operating Agreement
A limited liability company 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.
When it comes to an LLC operating agreement South Carolina does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all your details of business operation. This document would be useful if you decide to dissolve South Carolina LLC later.
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 and taxes in general. It is like a Social Security number dedicated to a business’ taxes. The EIN is necessary for any active business or any form of business for that matter.
To obtain EIN (aka FEIN) one has to fill up a form (Online or by mail) and submit it to the IRS. Before sending the form, ask for EIN Assistant. Enter details of your LLC, and finally complete the form and send it to the address given.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
Note: You don’t need 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.
And that’s all! Congratulation, you are now done with all the necessary steps to form your South Carolina LLC. If you still haven’t used a professional service from here, I strongly recommend having one to handle the remaining tasks.
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 bank account
- File South Carolina business permits & licenses
- Get liability for business and professional liability 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 South Carolina foreign 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.
South Carolina Foreign LLC
To register a South Carolina foreign LLC, one has to file the foreign LLC formation certificate with the Secretary of State, South Carolina. Forming a foreign LLC allows you to operate your business in more than one state in the USA as a single business entity. Check South Carolina Foreign LLC to know more about having a foreign LLC.
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. Also, the reduction in tax liabilities and various business funding options is why South Carolina is a good option for LLCs. The other 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, this incentive program is made. There are some incentive programs in this program, like the job development program in which an entrepreneur will be provided credit based on jobs that they are creating. This fund will help out a business in leveling its cost of expansion of the business.
Along with that, a property tax exemption is also available under this program. 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 tax credits for the jobs they are creating at the altar. The range credit is from $1000 to $9000, depending on the job 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 in developing their company and the state.
- 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, they get a tax rebate on that property for at least 5 years.
Top 3 Businesses in 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 deployed under agriculture in the state is 4.9 million hectares 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 manufacturing to supplying automobile vehicles and their parts. If you look at the sector’s history, 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 businesses in the state are:-
- Car renting business
- Uber driver
- WordPress developer
South Carolina LLC Formation Review
Time needed: 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 be unique, easy to find, and available in the state.
- 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.
If you are a resident of South Carolina, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $110 (domestic LLC) and $110 (foreign LLC), LLC costs in South Carolina include fees for Annual Reports every year. LLCs are liable to pay sales tax of 6% every year.
It takes 24 hours to get an LLC in SC if you file it online. For the mail filing, it takes 5 to 7 days to get an LLC.
Every year all the LLC have to submit an Annual Report to the South Carolina Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for the LLCs, it is a default tax structure. Once you will obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens.
LLCs are easier to establish than other business structures. Small businesses, especially start-ups can easily start their LLC in South Carolina at a bare minimum cost. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. The formation of limited liability companies requires much lesser documents and legal processes. Share your queries with us, leave a comment below.