Knowing how to start an LLC in South Carolina is essential if you want to get your business started. Thankfully, the process to do so is not particularly difficult, and it’s covered below.
As you follow along, you will learn more about all the legal requirements that form a part of the process.
Additionally, you’ll get a rundown of the different costs involved, as well as the necessary resources, and even a high-level overview of what to do if dissolution time should come.
|State||South Carolina||North Carolina||Georgia||Tennessee||US Average|
|LLC Filing Fee||$110||$125||$100||$300||$130.38|
|LLC Annual/Biennial Fee||$0 (no fee and no information report, unless LLC is taxed as an S-Corp )||$200 (every year)||$50 (every year)||$300 (every year)||$89.34 (every year)|
|Corporate Tax Rate||5.00%||2.50%||5.75%||6.50%||5.60%|
|Nominal GDP per capita||$52,031||$62,077||$63,271||$59,969||$64, 773.08|
Before You Set Up An LLC In South Carolina
As you prepare to start your LLC, you want to have a quick synopsis of what the process looks like beforehand.
Of course, as you proceed, you will see how everything works a bit more in-depth. On that note, creating an LLC in South Carolina consists of six major steps, which are as follows:
- Picking a name for your LLC
- Finding or nominating a registered agent
- Filing Articles of organization
- Compiling any other documentation needed
- Drafting the Operational agreement
- Applying for an EIN
These are the steps that will be explored and explained. Of course, any resources that contribute to the process will also be mentioned.
This is a good time to say that learning your state’s additional requirements, if any, is important here, even before you start filing.
These six steps are often enough, but the specific nature of your business may have other requirements that you need to know and take care of.
How Much Does It Cost To Start An LLC In South Carolina?
Now, it’s time to do a quick breakdown of the different costs involved in getting your LLC started in South Carolina.
First, it helps to kick things off with the mandatory costs, after which the optional ones will be highlighted.
Note that if you’re wondering how to start an LLC in South Carolina for free, you can’t. However, as you’ll come to see later, you can theoretically maintain it for free.
The only completely unavoidable cost is the primary one, and it happens to be the South Carolina LLC filing fee, which is $110. Unlike some other states that have different charges for LLCs not registered locally (expanding LLCs), foreign LLC registration is also $110 in South Carolina.
If your business requires additional licensing and permits that bear a cost, you will also insert them here.
Depending on how you look at it, the registered agent fee can also be counted as mandatory. The typical cost for the service is $50 to $300. However, you can technically become your own agent or nominate someone else internally to circumvent the fee, though this is not recommended.
Optionally, you can reserve your desired name up to 120 days before your filing for $25. Additionally, it will cost you $2 to register other names to do business with other than your legal one.
There is also your South Carolina certificate of existence or certificate of good standing, which costs $10. Typically, banks and other lending institutions require this.
Assuming you need no external paid permits and you’ve not decided to use a registered agent service, your total would be $110.
Of course, the presence of the said permits or the hiring of a registered agent will see their costs added to this total, as well as any of the optional elements that you may be interested in.
Steps To Start An LLC In South Carolina
This is where you will learn the details of each step in the process of forming an LLC in South Carolina.
Pay close attention to the descriptions, as skipping what’s vital could result in an unfavorable conclusion later on.
- Pick a Name for Your LLC – Your LLC must have a name, which requires a bit more than you would think. First, you must abide by the LLC name requirements of the state. This includes avoiding government agency or restricted words such as “State Department” and appending “limited liability company” or one of its known abbreviations to your company name.
Uniqueness is also mandatory, as you cannot use a name that another company already does. Complete a quick search to check that the name you want is unique. It’s also recommended that you review the full list of naming stipulations. Also, ensure that the domain name you want is available for website creation later.
- Find a Registered Agent in South Carolina – Legally, you must have a registered agent affiliated with your business. The main function here is to receive all legal and official government documentation affiliated with your LLC. The agent can be any person over 18 years old with a physical address in South Carolina who is affiliated with your business. Of course, registered agent services can also be used.
It’s always recommended that you go with the latter, especially given the compliance benefits that keep you in good standing and prevent you from having to deal with late fees.
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- Articles of Organization – With the two requirements above out of the way, it’s time to file your Articles of Organization with the Secretary of State. This can be done either online or by mail, and it comes with a cost of $110. Note that going the online route guarantees a quicker processing time without transit.
- Other Required Documents – Other documentation may be mandatory depending on your location and the nature of your business. For example, if your LLC is in the health industry, you will want to visit the South Carolina Department of Health and Environmental Control’s forms page to obtain, fill, and file the form(s) relevant to you.
Make sure you check if your business requires any special permits and licenses.
- Operating Agreement – As is often the case elsewhere, forming an LLC in South Carolina does not legally mandate that you have an operating agreement. Nevertheless, having one in place is a great way to ensure that all members are aligned, and it can settle disputes in the future if they arise.
- Get an EIN – You’re going to need to get a South Carolina LLC EIN next. This is an acronym that stands for Employer Identification Number. The IRS grants these to businesses, which helps it to identify them for tax compliance purposes as a Social Security number would do for an individual.
You may hear the term being interchangeably used with Federal Employer Identification Number (FEIN) or Federal Tax Identification Number (FTIN). Beyond IRS identification, your EIN is a legal requirement to hire employees, manage your taxes at the state and federal level, and open a business bank account. Apply for your EIN for free from the IRS either online or using the mail/fax option.
The Forms You Need To Register An LLC In South Carolina
The mandatory forms you are going to need to register your LLC in South Carolina are as follows:
Optionally, the following are also part of the equation:
|Did You Know? |
South Carolina has one of the lowest fictitious name registration rates at $2. Typically, the rate lies in the double digits. The state does not have an annual reporting requirement, which is atypical in LLC maintenance.
LLC Taxes In South Carolina
Typically, when you establish a business, you must make considerations for both federal and state-level taxes.
Both levels treat taxes the same way in South Carolina by default. LLC members get to benefit from the pass-through taxation style, which means that taxes are filed at an individual level, instead of at the business level, which prevents double taxation.
When LLC members believe it is advantageous, they can adopt an alternative tax structure, such as that of a C corporation or an S company. When forming an LLC in South Carolina, you should consult with a tax professional to determine the best course of action.
Special stipulations may apply, such as withholding taxes from employee paychecks If you have a staff compliment.
How Long To Form An LLC In South Carolina
The defining factor here is approval after the filing of your Articles of Organization. If you decide to file online, then things are on the quicker end at one to two business days.
Alternatively, filing via the mail includes the lead time of transportation, which means a one to two-week wait.
How Much Does It Cost To Run An LLC In South Carolina?
The big consideration here is what the operational cost is going to be annual. In the absence of the annual filing requirement that’s present in other states, the only charge that you will likely incur is the yearly charge that an external registered agent service would have.
Of course, if you keep this function in-house, then it means you could theoretically operate an LLC in South Carolina with no mandatory costs. If your business has any special requirements that come with yearly charges, they must be considered here.
What To Do After Formation
While you certainly deserve to be congratulated on completing the first step of learning how to create an LLC in South Carolina. You still have work to do to get the company up and running. Things you still have to do include the following:
- Create a logo – Your logo needs to be memorable and represent your business well. It’s recommended that you use a freelancer or a graphic artist who can listen to your requirements and give you a professional design in return.
- Build a website/eCommerce store – A web presence is mandatory in today’s business world. If you have products or services, then you need an eCommerce store built. At the very least, you should have a website that potential customers can visit. It must be engaging and you may want to think about getting this done professionally.
- Bank account – Your bank account allows you to retain business funding and transact business with others. Consider establishing multiple accounts, one of which is for day-to-day operational expenditure.
- Business insurance – Get insurance that’s in line with the nature of your business. For example, while general liability insurance may be good across the board, you may have a motor vehicle fleet that needs commercial insurance as well.
- Accountant hiring – For adequate book maintenance and keeping within the confines of compliance with auditory requirements, think about hiring an accountant.
- Outsourcing strategy – You don’t need to handle every single business function in-house, especially since some of them can take away from where the focus should truly be. Consider what is more effective in the long run to outsource and do so.
Resources To Start A Successful LLC In South Carolina
Here is a look at the most important resources that you’ll need to get your LLC started:
- Business Name Verification
- Name Reservation
- Fictitious Name Registration
- Articles of Organization
- EIN Application
- Foreign LLC Registration
- Certificate of Existence
Start Marketing Your LLC In South Carolina
Marketing in South Carolina is non-negotiable. It’s very unlikely that whatever industry you operate in doesn’t already have competition. Therefore, you need to establish your point of differentiation, which would indicate the value that you bring to your customers.
After doing so, you want to use marketing strategies such as adequate product placement, social media, content marketing, etc., to get people interested. A dedicated marketing team or an outsourced entity is recommended here.
How To Dissolve An LLC In South Carolina
Should you get to the point where the LLC’s existence is no longer desirable, you must dissolve it promptly, so there are no penalties or tax liabilities. Refer to your Articles of Organization and your operating agreement for any internal processes that need to be carried out.
Apart from that, you need to close your business tax accounts and file the South Carolina Articles of Dissolution.
Now, you should have no doubts about how to start an LLC in South Carolina. The insights you got above include the steps you need to take, associated costs, resources you need, how taxation works, and what to do after the business has been formed. We even covered how to handle dissolution if that time should come.
Good luck starting your new LLC.