South Carolina is known for its stunning landscapes, warm climate, and southern hospitality. However, in addition to this cultural charm, the state is a great place to start and grow a business.
Entrepreneurs are drawn to South Carolina for its location on the east coast, low cost of living, and business-friendly policies that foster innovation and growth.
When choosing a business structure, the Limited Liability Company (LLC) is one of the most popular choices. An LLC is a business structure that combines the liability protection of a corporation with the ease of a sole proprietorship or a partnership.
This is especially beneficial to small business owners, new businesses, independent contractors, and international entrepreneurs who wish to enter the U.S. market.
This guide will cover the process to form an LLC in South Carolina, starting with the selection of a name and ending with the compliance of state requirements.
Why opt for South Carolina to register an LLC?
Understanding potential benefits comes before filing any paperwork. These benefits include:
1. South-Carolina-friendly policies
The state of South Carolina provides some of the lowest operational costs and heavy tax benefits. These policies make it one of the most favorable states to do business in. The underwriting formalities and costs make a lot of entreprenuarial ventures much easier than in California and New York.
2. Growing Economy
Several Industries are represented in South Carolina’s growing economy. These include but are not limited to:
Manufacturing – the newly formed and growing automobile and aerospace branches of manufacturing welcome big players like BMW and Boeing locating their operations in the state.
Tourism and Hospitality – several million people visit Charleston, Myrtle beach and Hilton head every year. This huge consumer base promotes businesses in the region.
Startups – the cities of Columbia and Greenville are becoming innovation and tech centers with several startup businesses and co-working centers.
Agriculture and Logistics – South Carolina is one of the top states for International trade with the Port of Charleston. This makes South Carolina the most favorable for International trade.
3. Low Expenditure
Though states like South Carolina house more sizable cities, the cost of living is still more affordable in South Carolina, with reasonable filing expenses. This acts to alleviate the monetary strain that new entrepreneurs feel.
4. Relaxed Processes for Obtaining Business Licenses
Some states require a general business license that covers the whole state, however, South Carolina is not one of those states. More easily is the case, only a handful of municipalities and counties request basic, local governing licenses. This adds to the ease of operations for small business owners.
Instructional Content on how to Form an LLC in South Carolina
Step 1: Choose a Name for Your LLC
Your LLC name is your brand, and as such, it is an important aspect of the business to get right. Your LLC name in South Carolina is governed by the following rules:
- Name must be distinguishable – the name you come up with must not be the same as or too closely related to an already registered entity in South Carolina.
- Remember to include an Identifier – the name of the entity must include the words Limited Liability Company, LLC, or L.L.C.
- Restricted Words – Certain words (for example “Bank,” “University,” or “insurance”) need to be specially cleared.
It is possible to confirm the name of your choosing through the use of the South Carolina Secretary of State’s Business Name Search Tool.
💡 Pro Tip: If you would not like to wait to register your business name, you are free to reserve it for a period of 120 days by filing an Application to Reserve a Name. This comes with a fee of $25.
Step 2: Designate A Registered Agent
Each LLC headquartered in South Carolina is required to have a registered Agent. A registered Agent is a person or a company that is responsible to receive vital legal and tax documents.
Key Considerations:
- The registered agent must have a real physical location in South Carolina. They cannot have a post office box on file.
- The Registered Agent must be open at their physical location during standard working hours.
The Agent can be:
- A natural person domiciled in South Carolina.
- A corporate structure that is registered in South Carolina.
A significant number of out-of-state and international entrepreneurs retain dedicated Registered Agent services to guarantee professionalism and confidentiality.
Step 3: Submit Articles of Organization
The LLC in South Carolina is created by officially filing and paying for the Articles of Organization. This can be done through the physical mail, or completed electronically.
Filing Fee: $110
Form Required: Articles of Organization (Form DOM/PLLC)
Information Needed:
- The name of the LLC along with the primary appointment.
- The name and address of the Registered Agent.
- If the LLC is managed by a member or a manager.
- If the LLC can last for a specific number of years or last indefinitely until dissolved.
Once the state approves the form, a Certificate of Organization is issued, officially stating that the LLC now exists.
Step 4: Formulate an Operating Agreement
Though Operating Agreements are not mandated by state law, they are highly beneficial for all LLCs. This document states important inner workings of your company, helping to eliminate unnecessary issues in the future.
For the Operating Agreements, Operating Agreements include:
- Member equity fractions.
- How the profits and losses are shared.
- Distribution of voting and decision rights.
- Obligations and duties of the Manager.
- Policies concerning the addition and the subtraction of the members.
- Policies of the termination.
Your LLC will be subjected to the default state regulations without an Operating Agreement and such regulations might not serve your business optimally.
Step 5. Acquisition of an Employer Identification Number
An EIN is an employer identification number and is given by the IRS. It is the social security number of the company. It is needed in the following occasions:
- When the LLC is composed of more than one person.
- When payroll is to be set.
- When the company is to set up a corporate banking account.
- For the acquisition of several restrictive permits.
EIN can be gotten from the IRS portal without any fee. For those who do not reside in the United States, the application can be made using the SS4 form by fax or mail.
Step 6: Register for South Carolina state taxes and business licenses.
Depending on the type of business you are about to commence, you may have to register with state agencies:
Sales and Use Tax – a business that sells or offers taxable services to clients in South Carolina must register.
Employer Taxes – a business that hires employees must register for state withholding tax and unemployment insurance tax.
Industry Specific Licenses – certain professions, including contractors and those in health services and the financial sector, need additional licenses to operate.
Local Business Licenses – other South Carolina cities, including Charleston and Columbia may require a business license even if the state does not.
Most state tax registrations are under the jurisdiction of SCDOR.
Step 7: Opening a Business Bank Account.
A business bank account is a crucial requirement to ensure that personal and business finances are properly segregated. This account eliminates the mixing of personal and business funds, thereby providing protection to personal assets..
Some of the benefits include:
- Ease of accounting, thereby reducing tax liability, financial statement user costs, and value-added tax turnover.
- Opportunity for the business to borrow funds in the future.
A business account can easily be opened if you have the following documents:
- Business documents like the approved articles of organization.
- IRS issued Ein.
- Business operating contracts, if available.
Step 8: Maintain Your South Carolina LLC
Annual Report – Under South Carolina law, standard LLCs do not have to submit annual reports, however LLCs taxed as corporations might be required to submit Form Cl-1 to the Dept of Revenue.
Taxes – LLCs can be taxed as S-Corps or C-Corps, or, by default, LLCs can be taxed as pass-through entities.
Changes to Registered Agent – When your Registered Agent changes, the agent’s name must be provided to the state.
Good Standing – For an LLC to remain in good standing, to prevent it from being defaulted, the LLCs state filings, fees, and taxes must be maintained.
Costs of Forming LLCs In South Carolina
Here’s a list of the estimated costs:
- Articles of Organization Filing Fee – $110
- Name Reservation (Optional) – $25
- Registered Agent Service – $50 to $200 a year is hired
- Operating Agreement – Free if self drafted; an attorney is retained legal fees
- EIN – Free of charge via the IRS
South Carolina is one of the lowest states in the country to form an LLC in, due to the low fees.
Benefits of Starting an LLC in South Carolina
Limited liability protection – in an event of loss in business or while facing a lawsuit your personal assets are also in danger, which can also be safeguarded.
Pass-through taxation – Incomes are submitted under the personal tax returns of the members thus, avoiding the taxation of the corporation.
Free structure – Offers a choice whether to be a member ‘manager’ or ‘managed’ within the business.
Ongoing obligations – Compared to a corporation, there are little to none ongoing obligations to fulfill.
Almost Immediate Report Exemption – Lessens the administrative work, which in turn lowers the yearly expenses.
How Bizstartz Helps Expand Your Business to the U.S.
Although starting an LLC in South Carolina is simple, there are many restrictions to the people who are not citizens of the United States. These restrictions can be anything such as opening an American Bank Account, paperwork, or compliance regulations. This is where Bizstartz is useful.
Bizstartz mainly focuses on aiding the founders from U.S. and outside. We provide the aid in ensuring timely and legal compliance for starting the business within U.S. Here is what we offer for LLC Business Formation in South Carolina.
Filing of the Organizing paperwork – We complete and submit your Organization Document to the Secretary of the State of South Carolina for LLC formation.
Registered Agent Service – If you need a local representative, we can provide you with a qualified registered agent as required by leag regulations.
EIN request assistance – Obtaining Employer Identification Number (EIN) provides dedicated assistance, even for non-U.S. citizens, to secure it from the Internal Revenue Service (IRS).
Drafting of the Operating Agreement – Customized operating agreements are developed for the unique structure and objectives of each client’s LLC.
Assistance in setting up a USA Business Bank Account – We help international entrepreneurs in opening a USA business bank account and advise on the right alternatives.
Timely and Continued Support – We help your LLC remain compliant from year to year by providing assistance on BOI filing and tax compliance.
Tailored Support – Our team helps entrepreneurs, whether this is your first venture in the U.S. or you are advancing from overseas, to shift their focus towards business expansion.
With Bizstartz opening an LLC in South Carolina is fast, simple, and comes with minimal headaches.
Closing Thoughts
Forming an LLC in South Carolina comes with great opportunities for business growth for emerging entrepreneurs because of the low cost, low restrictions and great business support. South Carolina is great for small, emerging U.S. and international businesses because the requirements are simple, the fees are low and restrictive.
Here at Bizstartz, we assist our clients all over the world with the establishment of US LLCs, obtaining an EIN, opening bank accounts, and compliance management. Regardless of the location of our clients, be it South Carolina, another US state or abroad, we ensure that the entire procedure is seamless and uncomplicated.
To begin the LLC registration process in South Carolina, we advise clients to let us help them fill all the gaps involved.
