How to Form an LLC in South Carolina
A South Carolina limited liability company (LLC) is a business entity that offers its owners significant liability protection and, by default, pass-through taxation. The management structure of an LLC is flexible and straightforward. To start an LLC in South Carolina, you’ll need to file Articles of Organization with the South Carolina Secretary of State and pay $110 ($125 online). But first, you need to name your business and appoint a registered agent. Once the state processes your paperwork (within 1-2 business days of receipt if you file online and a few weeks if you file by mail), you’ll officially have an LLC. Then you’ll need to take a few extra steps to get your LLC ready for business. We’ll take you through the whole process here.
Ready to Form a South Carolina LLC?
Get Started
Name Your LLC
Designate a Registered Agent
Submit LLC Articles of Organization
Write an LLC Operating Agreement
Get an EIN
Open a Bank Account
Fund the LLC
File reports + taxes
1. Name Your LLC
First things first—your LLC needs a name. And not just any name. South Carolina’s rules for naming an LLC are outlined in S.C. Code § 33-44-1205, but here are the basics. Your LLC name must:
- Include an LLC indicator like “Limited Liability Company,” “LLC,” or “Ltd. Co.”
- Be “distinguishable” (unique) among registered and reserved business names in South Carolina.
Already have a business name? Check to see if it’s available.
Can I reserve a business name in South Carolina?
Yes. If you’re not ready to form your LLC yet but you don’t want another business to take your name, you can reserve it for up to 120 days. To do so, you’ll need to submit the Application to Reserve a Limited Liability Company Name to the South Carolina Secretary of State with a $25 filing fee.
What’s the difference between my LLC’s name and a DBA?
Your LLC’s legal name is the one listed on your Articles of Organization. A DBA (Doing Business As) name is any name other than your LLC’s legal name under which your LLC does business.
Some LLCs use DBAs to market to a specific audience or roll out a niche product. For example, a business called Palmetto Farms L.L.C. may do business under the DBA name “Bonnie Kathleen’s Flower Arrangements” to break into the wedding industry.
South Carolina does not require or offer DBA registrations at the state level. If you want to protect your DBA from being adopted by another business, you can register your DBA as a trademark in the state of South Carolina. To do so, you’ll need to file an Application for Registration of a Trademark or Service Mark.
Find out more about How to get a DBA Name for Your Business.
What’s the difference between a DBA and a Fictitious Business Name in South Carolina?
In many states, the terms DBA and Fictitious Business Name (FBN) are interchangeable. This is not the case in South Carolina.
In South Carolina, FBNs are used only by out-of-state (foreign) LLCs when the LLC’s name is not available to be used in South Carolina. A foreign LLC that uses an FBN must register that name with the Secretary of State by filing the Adoption of a Fictitious Name form with the South Carolina Secretary of State for $2.
2. Designate a Registered Agent
A registered agent is someone appointed to accept legal mail—called service of process—on behalf of your LLC. Appointing one is a legal requirement for all South Carolina LLCs. Your South Carolina registered agent could be you, someone else, or a registered agent company. You’ll need to list your registered agent’s name and physical address on the Articles of Organization (the paperwork you’ll use to register your LLC).
Learn why the pros use a registered agent service.
What does a registered agent do?
The duties of a registered agent are defined in S.C. Code § 33-5-101. In a nutshell, your registered agent must:
- Have a physical address in South Carolina.
- Be present at that address during regular business hours.
- Accept legal mail in person on behalf of your business and get it to you quickly.
Can you be your own registered agent in South Carolina?
Yes. If you’re willing to list your street address on the public record and plan on being present at that address during business hours, you can act as your own registered agent.
Can I change my registered agent after I start an LLC?
Yes. You can change your registered agent in South Carolina at any time. Just file a Notice of Change of Registered Agent form with the South Carolina Secretary of State for $10.
3. Submit LLC Articles of Organization
The Articles of Organization form is the paperwork you’ll fill out and submit to the state to officially establish your LLC.
Note: All of the information on this form will become part of the public record.
South Carolina’s Articles of Organization require the following information:
Company Name. Include the words “limited liability company” or an abbreviation.
Registered Agent Address. Must be an actual street address.
Registered Agent Name. Whoever will accept important legal mail in person for your business.
Organizer Information. Whoever completes and submits this form—this doesn’t need to be someone within your LLC, but whoever it is will need to list their name and address.
Duration (Optional). If you want your LLC to dissolve after a set amount of time, check the box and specify the length of time here. Hint: Most LLCs skip.
Management. Check the box if your LLC will be manager-managed.
Manager Information. Manager-managed LLCs must list the name and address of each manager.
Liability. Check this box to make any members personally liable. Hint: Most LLCs skip.
Effective Date (Optional). If you want, you can delay the start of your LLC for up to 90 days. Hint: Most LLCs skip.
Extra Provisions (Optional). Attach anything extra (for example, a business purpose) here.
Organizer Signature. Each person completing and submitting this form must sign and date the form.
Once you’ve completed the form, you’ll file it with the South Carolina Secretary of State either online ($125) or by mail ($110). You’ll save a bit of money filing by mail, but you’ll lose time—mailed filings take up to two weeks to process (not including mailing time) while online filings are approved within two business days of receipt.
How can I keep my personal information off the public record?
The best way to keep your personal information off the public record (and out of the hands of aggressive marketers and data brokers) is to keep it off this form altogether.
To do that, you need to find a registered agent who will list their business address in place of your own everywhere possible on this form. We’re that registered agent.
What’s the difference between a member-managed and manager-managed LLC?
When it comes to management, there are two types of LLCs: member-managed and manager-managed.
- In a member-managed LLC, members (owners) share the daily responsibilities of running the LLC. Think hiring and firing employees, opening and closing bank accounts, ordering inventory, and any other important tasks your business might require.
- In a manager-managed LLC, the members hire one or more managers to handle the LLC’s daily operations.
For help with deciding which management structure will work for you, see our page on LLC Member Vs Manager.
How do I file the South Carolina Articles of Organization?
You can submit your Articles of Organization to the South Carolina Secretary of State online or by mail. If you file by mail, send two copies of your Articles (each exactly the same and signed by your organizer(s)).
By mail:
South Carolina Secretary of State’s Office
Attn: Corporate Filings
1205 Pendleton Street, Suite 525
Columbia, SC 29201
Online:
4. Write an LLC Operating Agreement
Your operating agreement is the blueprint for how your LLC functions. It’s where you put the structure and rules of your LLC into writing—important stuff like how much each member invested, how voting works, and even what you’ll do if you need to dissolve the business.
Check out our attorney-drafted South Carolina LLC Operating Agreement.
Does South Carolina require an LLC to have an operating agreement?
South Carolina’s state statutes don’t require an LLC to adopt an operating agreement. Per S.C. Code § 22-44-103, LLC members “may enter into an operating agreement.” That said, any lawyer worth her salt will recommend that you adopt a strong, written operating agreement for your LLC. An operating agreement is essential for protecting your limited liability status, resolving conflicts, and even opening a business bank account.
What should be included in an operating agreement?
Your operating agreement should plan for every major situation your LLC is likely (and maybe even unlikely) to face. Commonly, operating agreements address:
- initial investments
- profits, losses, and distributions
- voting rights, decision-making powers, and management
- transfer of membership interest
- dissolving the business
Does a single-member LLC need an operating agreement?
Yes. Without an operating agreement, a single-member LLC can appear perilously similar to a sole proprietorship (a business type without liability protection). And although you won’t need to resolve a miscommunication with yourself, you will need an operating agreement to open a bank account.
5. Get an EIN
An EIN (employer identification number) is a nine-digit number assigned to your LLC by the IRS for tax identification purposes. You can apply for an EIN from the IRS for free either online or by mail. Filing online is fastest, but you’ll need to file by mail if you don’t have a social security number.
Do I need an EIN for my South Carolina LLC?
Yes. Legally speaking, your LLC only needs to obtain an EIN if it has employees or elects to be taxed as a corporation. However, you’ll need an EIN to open a business bank account. And your EIN spares you from the need to give out your social security number out to vendors and other business associates.
What To Do After Forming Your South Carolina LLC
6. Open a Bank Account
Your LLC needs a bank account. Why? To keep your business finances separate from your personal finances.
Your limited liability is only as solid as the separation between you and your business. The second you let business spending and personal spending intermingle, you’re putting your limited liability status in jeopardy.
When you open a bank account for your South Carolina LLC, be sure to bring the following:
- South Carolina LLC Articles of Organization (a copy is fine)
- the LLC’s operating agreement
- the LLC’s EIN
- an LLC Resolution to Open a Bank Account (if your LLC has more than one member).
If your LLC has more than one member, use our free LLC Resolution to Open a Bank Account.
7. Fund the LLC
You’ve got a shiny new LLC and business bank account—time to get some money in there.
Each member should make an initial contribution to the LLC to pay for their percentage of ownership (called membership interest). Typically, initial contributions are made the good old fashioned way—with money. However, sometimes members contribute property or services to pay for membership interest. Keep in mind that should your members choose to invest this way, they may trigger a tax event.
What is LLC membership interest?
Membership interest is the percentage of the LLC that a member owns.
Usually, membership interest is directly correlated to initial contributions. So if you invested $700 in your LLC and your only other member invested $300, you would hold 70% membership interest in the LLC while the other member would hold 30%.
Membership interest is often tied to voting power. In the above example, you would have decision-making power in the LLC (unless another arrangement is spelled out in the operating agreement).
8. File State Reports & Taxes
South Carolina doesn’t require LLCs with default tax classification to file an annual report. Hoorah!
But if your LLC has elected to be taxed as an S-Corp or C-corp, you will need to file an annual report with the South Carolina Department of Revenue by March 15th each year.
How are South Carolina LLCs taxed?
By default, South Carolina LLCs are taxed as pass-through entities. This means that the revenue from the LLC “passes through” the business and is distributed among the owners, who report the revenue as income on their personal tax returns. The revenue generated by South Carolina LLCs is subject to the federal self-employment tax (15.3%). LLCs can also file with the IRS to be taxed as an S-Corp or a C-Corp.
Learn more about S-Corp Vs LLC tax designation.
