Before we get into this guide on how to start an LLC in South Carolina and all the steps it takes, you can hit the cheat code button and get some help from a professional service like ZenBusiness.
ZenBusiness will make your journey on starting a South Carolina LLC much easier than going through all the steps below. Don’t get me wrong, it’s worth the energy to understand what the South Carolina Secretary of State’s office is going to need form you to setup your Limited Liability Company but it’s much easier to have a company that has done this for many other South Carolina LLC business owner.
Before we jump in, I like to provide a few business ideas for your South Carolina LLC since you are most likely living there today if you’re reading this.
So, what is South Carolina known for and what business would I start?
- Golf Course Services
- Beach Services
- Tourist Shop in the Historic District
There is so much history to South Carolina and it feels like the best option for a business name there would be to get into the three categories above.
It’s amazing the business entity you could pull together quickly. Alright – let’s get into the steps it takes to spin up a South Carolina LLC.
Name Your South Carolina LLC
The first step is to name your limited liability company. This can be done by visiting the South Carolina Secretary of State Business Filings website and scrolling down to the bottom of the page where it says “Begin Business Filing”.
The best way of searching is going straight to the South Carolina Secretary of State site here: https://businessfilings.sc.gov/BusinessFiling/Entity/Search
From there, you’ll want to select “Name Search” on the next page and search to see if your LLC name is available in the state of South Carolina.
You’ll want to make sure that you follow the South Carolina naming guidelines:
- The name must contain the phrase “Limited Liability Company” or one of its abbreviations “LLC” or “L.L.C.”
- The name cannot be deceptively similar to any other business entity name on file with the Office
- The name cannot contain language that would indicate that the LLC is organized for a purpose not allowed by state law
- The name cannot be reserved or unable to be filed due to a pending application
- An LLC’s name can be changed at any time. The new name must be available and follow the same rules as above.
As you’re thinking about your business name, it’s just as important to make sure you’re checking if you can conduct business in this name but also that the business name is available digital aka your website domain.
I’d recommend using GoDaddy to check to see if your golfing or beach South Carolina LLC name is going to be usable for you. If so, I’d lock it down and get the domain. It’s not required by South Carolina law to do this but I like to tell people that your Limited Liability company name is almost as important as getting it approved by the state.
If you’re going to have more than one member in your LLC you will need to make sure they are ok with the name you’re picking but as a one of the LLC owners, I’d highly recommend you do this before you get to the next step.
Once you have your LLC name figured out and the website domain is locked down, you’re going to need to figure out your what type of registered agent you’re going to use.
Choose your registered agent
Your next step is to choose a registered agent for your South Carolina LLC. A registered agent is an individual or business entity that agrees to accept service of process (SOP) on behalf of your LLC.
This means that if your LLC is ever served with papers related to a legal matter, your registered agent will be the point of contact. The papers will be delivered to your registered agent’s address, and then it will be the registered agent’s responsibility to forward them to you.
You are allowed to act as your own agent in South Carolina, but we don’t recommend it.
There are a few reasons for this.
First, as the LLC owner, you’re probably going to want to keep your home address private for safety reasons.
Second, if you’re ever served with SOP while you’re out of town, there will be no one available to accept it on your behalf. This could result in a default judgment against your LLC.
Third, if you act as your own registered agent, you’ll need to be available during business hours to accept SOP. This means you won’t be able to take vacations or even step out for lunch without the risk of missing an important legal document.
For these reasons, we recommend hiring a professional registered agent service like Northwest Registered Agent.
Professional registered agent services have people available during business hours to accept SOP on your behalf, and they can forward documents to you no matter where you are in the world. This gives you the freedom to live your life without worrying about missing important legal documents.
Plus, when you use a professional registered agent service, your home address will remain private because it will be listed as the registered agent’s address on public record.
If you do decide to use a professional registered agent service, we recommend Northwest Registered Agent. We’ve used them for our own businesses, and we’ve been very happy with their service.
They offer the first year of their registered agent service included when you use their service to help you incorporate your South Carolina LLC. I highly recommend you use them for setting up your South Carolina registered agent.
Once you’ve setup your South Carolina registered agent, you’re going to need to make sure you’ve submitted your South Carolina LLC articles of organization.
Prepare and File Articles of Organization
The next step is to prepare and file your LLC’s Articles of Organization with the South Carolina Secretary of State.
Your Articles of Organization is a simple document that officially forms your LLC. In South Carolina, you can file your Articles of Organization online, by mail, or in person.
To file online, you’ll need to create an account with the South Carolina Secretary of State’s Business Filing System. Once you have an account, you can login and begin the process of filing your Articles of Organization.
To file by mail or in person, you’ll need to download the Articles of Organization form from the South Carolina Secretary of State’s website. Once you have the form, you can fill it out and mail it to the address listed on the form, or you can bring it in person to the South Carolina Secretary of State’s office.
Once your Articles of Organization have been filed and accepted, your LLC will officially be formed! This is the most exciting step for me because it makes it official!
Whether or not you’ve setup a Foreign LLC, sole proprietorship, S Corp or are just setting up a South Carolina LLC – it’s going to be important that you have a LLC operating agreement. Let’s get into what it is and why it’s so important.
Create an operating agreement
After you’ve setup your South Carolina LLC and have received your South Carolina business license, it will be important for you to create an operating agreement.
Your operating agreement is a legal document that outlines the ownership and operating procedures of your LLC. It’s not required by law in South Carolina, but I highly recommend that you create one.
Your operating agreement will do a few things:
- It will prove that your LLC is a separate legal entity from you, which will protect your personal assets in the event that your LLC is sued.
- It will solidify the roles and responsibilities of each member of your LLC, which can help prevent disagreements down the road.
- It will outline what happens in the event that a member wants to leave the LLC, dies, or becomes incapacitated.
While your LLC operating agreement is not required by law, it’s an important document to have because it will protect you and your business in the long run.
Some of the more important pieces that you’re going to need to plug in are:
- If you put personal assets into the business
- Business dept you may have
- What happens if there is a dispute between LLC members
There are plenty of other items you could plug into this and it can be updated over time but it’s your operating guide for the business. Some small business owners reference back to this when they hire employees. It’s great as a small business to have this as a business tool to help as your business operates and changes over time.
Once you decided with your business partner what the operating agreement is goin got look like for your South Carolina LLC – you’ll need to get your IRS employer identification number.
Get an EIN
The next step is to obtain your Employer Identification Number (EIN) from the IRS.
Your EIN is a nine-digit number that is used to identify your business for tax purposes. You’ll need it to open a business bank account, file your LLC’s annual taxes, and apply for business licenses and permits.
You can apply for your EIN online, by mail, or by fax.
If you apply online, you will need to have a valid Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN), or Employer Identification Number (EIN).
The internal revenue service makes it easy for you to apply for this but oddly it only works during business hours. It is an online form but for whatever reason – it only works during business hours. Don’t ask me why – that’s just the way it is.
Here’s the best place to start: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
If you apply by mail or fax, you will need to fill out and submit Form SS-4.
Once you have your EIN, you can move on to the next step: opening a business bank account.
Open A Business Bank Account
Now that you have your EIN, you can open a business bank account for your LLC. I recommend that you look at a few options that we put together for the best small business bank accounts.
My favorite is Novo.co and you can check out their business checking account here and they will help you open business bank accounts if you need more than one.
If you’re going to setup a business structure that has a physical street address, you’ll most likely need to include that in your application for the bank account.
You’re also going to need your Federal Tax Identification number that you just applied for in the EIN section prior to this.
Your business finances are a very important piece of your business. The last thing you need is business debts that are going to cause issues for you because of a business credit card.
Get Small Business Insurance
The last item on the list for setting up your South Carolina LLC is to get small business insurance.
This will protect you from any potential liabilities that may arise from running your business.
There are a few different types of insurance that you should consider:
Product liability insurance – This will protect you in the event that someone is injured by a product that you sell.
Professional liability insurance – This will protect you in the event that someone is injured as a result of your professional advice or services.
Business property insurance – This will protect your business property in the event that it is damaged or destroyed.
You can get quotes for small business insurance here.
Once you have all of these items taken care of, you will be well on your way to starting your LLC in South Carolina!
File an Annual Report
The final step in starting and maintaining your LLC in South Carolina is to file an annual report.
Your annual report is due on the first day of the month in which your LLC was formed.
For example, if your LLC was formed on January 1, your annual report would be due on January 1 of the following year.
You will need to include your LLC’s name, address, and the names and addresses of all members and managers in your annual report.
You will also need to include the name and address of your registered agent.
Annual reports can be filed online, by mail, or in person.
Online filing is the quickest and easiest way to file your annual report.
You can file your annual report online here.
If you choose to file by mail, you will need to fill out and submit Form SC-1002.
Annual reports can also be filed in person at the South Carolina Secretary of State’s office.
The South Carolina Secretary of State’s office is located at:
1205 Pendleton Street, Suite 421, Columbia, SC 29201
The telephone number for the South Carolina Secretary of State’s office is: 803-734-2158
Filing your annual report is an important part of maintaining your LLC in good standing with the state of South Carolina.
Failure to file your annual report on time can result in late fees, and may even cause your LLC to be automatically dissolved.
Pay Annual Taxes
The state of South Carolina does not impose an annual tax on LLCs.
However, you may be required to pay federal taxes on your LLC’s income.
For more information on federal taxes for LLCs, please see the IRS website.
Conclusion
Starting an LLC in South Carolina is a relatively simple process.
As long as you follow the steps outlined in this article, you should have no problem getting your LLC up and running in no time!
FAQs
Is there a minimum number of members required to form an LLC in South Carolina?
No, there is no minimum number of members required to form an LLC in South Carolina.
Can I form an LLC in South Carolina if I live in another state?
Yes, you can form an LLC in South Carolina if you live in another state.
Do I need to have a physical address in South Carolina to form an LLC?
No, you do not need to have a physical address in South Carolina to form an LLC.
However, you will need to have a registered agent with a physical address in South Carolina.
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