Want to learn how to form an LLC in South Carolina? The Palmetto State is a great place to start a business, especially if you operate in the aerospace, manufacturing, automotive or live sciences industries.
We’re here to help you get your South Carolina business underway. Use this guide to walk through each step of forming your Limited Liability Company in South Carolina, from choosing a business name to filing the appropriate formation documents.Ready? Then let’s begin!
Pick a Name for Your South Carolina LLC
The first thing to do when forming your South Carolina LLC is to choose a name. While this may sound like an easy task, there are a couple of things you should bear in mind. First, make sure you choose a name that your target customers and clients will find easy to pronounce and remember.
Second, it is vital to ensure that the chosen name for your South Carolina LLC complies with the following naming rules and guidelines in the United States:
- Your South Carolina LLC name must include one of the following phrases: “LLC,” “L.L.C.,” or “limited liability company.”
- Your chosen LLC name must be unique and distinguishable from any other South Carolina LLC.
- Restricted words (e.g., Trustee, Attorney, Bank, etc.) will need additional paperwork and a licensed professional, such as a lawyer, to be part of your South Carolina LLC.
- Your chosen business name must not include names that can confuse your South Carolina LLC with government agencies.
Third, make sure your chosen LLC name is available in South Carolina by doing a South Carolina LLC Name Search on the state website.
We also recommend checking to ensure your LLC name is available as a web domain and purchasing it immediately if so.
Hire a Registered Agent
A registered agent is any business entity or individual responsible for receiving and forwarding legal correspondence and documents on your LLC’s behalf.
South Carolina legally requires all LLCs to nominate a registered agent. However, there are no restrictions on who can be your LLC’s registered agent. They only need to meet the official requirements for being a registered agent in South Carolina. This includes being at least 18 years old and having a permanent street address in South Carolina. They must also be available during the regular business hours.
While you can nominate yourself as a registered agent, it’s not ideal. For example, you must use your address on public records, which can compromise your privacy. That is why we recommend hiring one of the following registered agent service providers in South Carolina:
Northwest is our top pick for a South Carolina registered agent service provider. Costing only $125 per year, they offer a comprehensive registered agent package that includes compliance alerts, pre-filled state forms, annual report reminders, document storage, scanned documents, and mail forwarding.
On top of that, Northwest is reputable for its incredible customer support. Their professional support experts are always available to help you with any issue related to compliance and registered agent services.
Northwest is also a great choice for owners of multiple businesses. If you use Northwest in four or more states, you get a discounted annual fee of $100.
Another top registered agent company for your South Carolina LLC is ZenBusiness. It is rated #1 on sites such as MarketWatch, Forbes, and Investopedia, which is a testament to its excellence.
As your registered agent service provider, ZenBusiness will give you access to document scanning, email notifications, fast turnaround, and a personalized dashboard. On top of that, ZenBusiness has a $5K Grant Program that aims to help would-be entrepreneurs start and grow their businesses.
The annual fee for the ZenBusiness registered agent package is $199.
Our third recommendation for a registered agent company in South Carolina is IncFile. This reputable service provider has helped over 800,00 businesses stay compliant with state and federal governments over the years.
When you purchase IncFile’s registered agent package, you will get tailored SMS and email alerts, access to all your correspondence on a custom dashboard, and automatic mail forwarding. Additionally, you will get regular compliance reminders. So you will never worry about missing compliance deadlines.
IncFile’s annual fee is only $119 per year, and you can also hire them for other LLC formation services like writing an operating agreement, filing an article of organization, tax consultation, foreign qualification, and more.
File an Article of Organization
After hiring a registered agent, the next step in forming your South Carolina LLC is to register your business with the South Carolina Secretary of State.
The simplest and fastest way to register your business is by filing an Article on Organization online via the South Carolina Online Business Formation System. You must create an account with your chosen LLC name and an active email address. You will also need to pay the filing fee of $110.
Alternatively, you can register your South Carolina by mail. Download and fill out the South Carolina LLC Articles of Organization Form, and then send it together with a check or money order for the state filing fee of $110 to the following address:
Office of the Secretary of State: South Carolina
Attn: Corporate Filings
Suite 525 Columbia
1205 Pendleton Street, SC 29201
Draw Up an Operating Agreement
In South Carolina, drafting an operating agreement for your LLC is not a legal requirement. However, you should see it as an important step in forming your South Carolina LLC, as having a well-written operating agreement can prevent future disputes and conflicts among LLC members.
An operating agreement is a legal, internal document that defines the division of losses and profits in the LLC, liability clauses, and the management intricacies of your LLC. It ensures that all LLC members are in agreement regarding how the LLC will be run.
Creating an operating agreement is straightforward, and there are various free sample templates online. You only need to download one and fill in the relevant details. If you find it daunting and time-consuming to create your operating agreement, you can purchase an LLC formation package that includes an operating agreement.
Acquire Licenses and Permits
Before operating your LLC, you must get the necessary licenses and permits.
A business license for your LLC is a legal document that permits you to start conducting business activities within the location under its jurisdiction. The licensing and permit requirements you require vary depending on the location and industry of your business.
The cost of a business license and permit in South Carolina ranges from $50 to $$300. You can learn more about your licensing and permit costs and requirements by checking the South Carolina Secretary of State website.
Get Your Federal Tax ID
Some South Carolina LLCs are required to acquire a Federal and State Tax ID. This is the equivalent of your business’ Social Security Number. It is also known as Employer Identification Number (EIN) and is used by the IRS to identify LLCs for tax purposes.
All LLCs that are taxed as a separate business entity and have hired employees are legally required to obtain a Federal and State Tax ID.
Even if your LLC does not fall under the above categories, we still recommend acquiring a Federal and State Tax ID, as it offers many more benefits, such as making it easier to open a bank account.
You can obtain your Federal and State Tax ID from the IRS website. The application process is straightforward and free of charge. You will only need to provide basic details about your LLC, such as business name and location.
Open a Business Bank Account
Another vital step in forming your LLC in South Carolina is opening a business bank account. It is essential for liability protection as it separates the member’s personal finances from the business funds. A business bank account will also make your business dealings easier, boosting your LLC’s liquidity and legitimacy.
Most financial institutions demand a Federal and State Tax ID and certification of formation to open a business bank and credit account. Some banks may also need you to make a certain deposit amount while opening your business bank account.
If you are still wondering where to open your business bank and credit account in Carolina, you could consider one of the following financial institutions:
- First National Bank of South Carolina
- Farmers & Merchants Bank of SC
- South Carolina Federal Credit Union
Buy South Carolina Business Insurance
One of the most important things you can do as an LLC owner is purchasing the appropriate insurance policy.
While South Carolina state does not need LLCs to acquire general liability insurance, we recommend getting one as it will protect your LLC in case of lawsuits over things like property damage and personal injuries related to your business activities.
Every South Carolina LLC with four or more employees must acquire a workers’ compensation insurance policy. It pays for any claims for on-the-job injuries, illnesses, or even death.
If your LLC owns business cars, you will need auto insurance to offer protection against liability in the event of a wreck.
The state does not require a property insurance policy. However, it can be a stipulation of a landlord if you are renting a commercial space. This policy will protect your property, assets, and equipment in case of natural disaster, theft, or fire.
You can get a competitive quote for all your business insurance needs by visiting a comparison site like Insureon.
Speed Things Up with an LLC Formation Package
Forming an LLC in South Carolina on your own isn’t a task for everyone. It can be time-consuming, daunting, and complex. Fortunately, purchasing a comprehensive LLC formation package can speed up and streamline the process.
LLC formation companies, such as ZenBusiness, have packages that give you access to all the stages of forming your LLC in South Carolina. For instance, the company’s Starter formation package is free of charge and includes all the essential LLC formation services, such as the article of organization, operating agreement, etc. You will only need to cover the ensuing state filing fee.
FAQs About Forming an LLC in South Carolina
How Long Will It Take to Form My South Carolina LLC?
It will take one to two working days to form an LLC in South Carolina if you file your Article of Organization online and four weeks if you file it by fax/mail. Unfortunately, there is no expedited processing for forming LLCs in South Carolina.
How Much Does It Cost to Set Up an LLC in South Carolina?
The primary cost of forming an LLC in South Carolina is $110, which is the fee for filing your Article of Organization. You will also need to cover other costs related to hiring a registered agent, purchasing proper business insurance, etc.
Can I Act as my Own Registered Agent in South Carolina?
Yes. You can nominate yourself to act as your own registered agent in South Carolina, provided you meet the state requirements of being one. For instance, you must be 18+ years of age with a physical street address in South Carolina. You must also be available to work during regular business hours in the state.
Can I Form a Single-Member LLC in South Carolina?
Yes. The state laws allow entrepreneurs to form single-member LLCs in South Carolina. In fact, the steps for forming a single-member LLC in South Carolina are similar to those listed in this article.
Get Your South Carolina Business Started Today
If you follow the steps in this guide, forming your South is straightforward. But if you find any step complex, daunting, or time-consuming, you can hire an LLC formation company to simplify and speed it up for you. Whichever method you choose, we wish you the best of luck.