What is a Limited Liability Company?
Frequently asked questions about starting and running an LLC, or limited liability company.
Many small business owners decide to form a limited liability company (LLC). An LLC is a popular business structure because it combines the limited liability of a corporation with the lack of formalities of a partnership or sole proprietorship. With an LLC, you can also choose how your company is taxed.
Follow these steps to create an LLC in South Carolina. For more information on how to form an LLC in any state, see our article on how to start an LLC. You can also use our online LLC formation service to register your LLC.
When choosing your business name, you must follow the state's laws for LLC names. When you select a name for your business, you must follow the state's laws for LLC names. South Carolina's LLC naming laws are similar to those of other states and specify what you can and can't name your LLC.
LLC name must be distinguishable. Your LLC's name must be distinguishable from the names of other business entities already on file with the South Carolina Secretary of State (SOS). You can check the SOS's business name database to see whether your proposed name is available to use. (S.C. Code § 33-44-105 (2024).)
LLC name must include an entity designator. Under South Carolina law, an LLC must include the words "limited liability company" or "limited company," or the abbreviation "L.L.C.," "L.C.," "LLC," or "LC." You can abbreviate the words "limited" as "Ltd." and "company" as "Co." (S.C. Code § 33-44-105 (2024).)
Name reservation. If you've picked out a name for your business but aren't ready to file your formation paperwork with the SOS, then you can reserve your name until you're ready to file. You can reserve a name for 120 days by filing an Application to Reserve a Limited Liability Company Name with the SOS's Corporations Division. You must file the reservation by mail. As of 2024, the filing fee to reserve an LLC name is $25. (S.C. Code § 33-44-106 (2024).)
Using an assumed name. When doing business, you don't have to use your LLC's legal name registered on its articles of organization. Instead, you can use an alternative name—sometimes called an "assumed name," "DBA" (short for doing business as), "trade name," or "fictitious name." In South Carolina, you don't have to register your assumed name with the SOS. Only limited partnerships and out-of-state companies that use a name in South Carolina that's different from their registered legal name must register their assumed name. Typically, you'll list your DBA with your city or county when you apply for a business license.
Every South Carolina LLC must have an agent for service of process in the state—often called a "registered agent." A "registered agent" agrees to accept legal papers on the LLC's behalf—for example, if the LLC is sued.
The registered agent can be:
The registered agent must have a physical street address in South Carolina. (S.C. Code § 33-44-108 (2024).)
A South Carolina LLC is created by filing Articles of Organization with the SOS. The articles must include:
(S.C. Code § 33-44-203 (2024).)
You can file the articles online or by postal mail. To file online, you must register and create a username and password. As of 2024, the filing fee for South Carolina Articles of Organization is $110.
An LLC operating agreement isn't required in South Carolina. However, you should create one for your company. An operating agreement is an internal document that establishes how your LLC will be run. It's not filed with the state.
This foundational document sets out the rights and responsibilities of the members and managers, including how the LLC will be managed. At a minimum, the operating agreement should include the following:
Besides creating a framework for your company operations, an operating agreement can help preserve your limited liability. It can show that your LLC is truly a separate business entity from the owners.
In the absence of an operating agreement, state LLC law will govern how your LLC operates.
Your LLC will likely need to comply with tax and regulatory requirements, including applying for business licenses and permits and registering for other business taxes.
Obtaining an EIN. If your LLC has more than one member, you must obtain a federal employer identification number (EIN) for your company, even if it has no employees. If you form a single-member LLC, you must obtain an EIN only if your LLC will have employees or you elect to have your LLC taxed as a corporation instead of a sole proprietorship (disregarded entity). You can obtain an EIN by completing an online EIN application on the IRS website. There's no filing fee.
Applying for business licenses. Depending on your business activities and location, your LLC could need to obtain local and state business licenses. For more on which licenses, permits, and registrations you might need, see our article on how to get a small business license in South Carolina.
Registering with the South Carolina Department of Revenue. In some cases, for example, if you have employees or will be selling goods and collecting sales tax, you'll need to register with the South Carolina Department of Revenue (DOR). You can register your business online using MyDORWAY. For more information on state LLC tax registration, check out our article on LLC annual report and tax filing requirements in South Carolina.
Here are some other questions you might have about your South Carolina LLC.
If you're just starting your business or have already been operating as a sole proprietor, you should consider forming an LLC. LLCs limit an owner's personal liability for business debts and lawsuits and offer a lot of flexibility when it comes to ownership, management, and taxation of the business.
To learn more about LLCs and decide if it's the right business structure for you, see our article on LLC basics.
Below are the fees (as of 2024) you might need to pay to form your LLC in South Carolina:
Filing on your own is often the cheapest option, but completing all of the forms and filing them yourself can be complicated. Hiring a lawyer is another option, but it will often cost you hundreds, if not thousands, of dollars in the process. If you'd like help completing all the filings, try our online LLC formation service.
To learn more about the costs associated with forming and running an LLC, see our article on how much it costs to form an LLC.
No. South Carolina, unlike most states, doesn't require LLCs to file an annual (or periodic) report.
Though you won't need to file annual reports for your business, your LLC will need to file and pay applicable taxes to the local, state, and federal governments. In addition, your LLC might need to obtain and periodically renew any required general or special business licenses or permits. You'll be responsible for keeping track of these maintenance requirements to keep your LLC in good standing and legally compliant.
Starting in 2024, all LLCs were previously required to submit a beneficial ownership information (BOI) report to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of Treasury. However, in March 2025, after some constitutional challenges, FinCEN revised the BOI reporting rule so that the requirement only applies to companies created outside the U.S. So, if you form your LLC within the U.S., then you no longer need to worry about the BOI reporting requirement.
You're not required to have an operating agreement for your LLC in South Carolina. Though, it's highly advisable to have one. An operating agreement can help protect your limited liability status, prevent financial and managerial misunderstandings among members, and ensure that you choose the rules that govern your business instead of your state's default rules.
South Carolina doesn't have a statewide general license requirement for businesses. But you might need to get a license depending on your location or industry. Nearly all cities and counties require businesses to obtain a local business license. You can find more information and links to city and county websites on the South Carolina Business One Stop (SCBOS) website.
You can find extensive details about state and local regulatory requirements in our South Carolina business license article.
LLCs are considered "pass-through entities" (PTEs) by default, meaning the responsibility for paying taxes on the LLC's income passes through to the members. So, an LLC member will report and pay taxes on their share of the LLC's income on their personal tax return.
However, there are other taxing scenarios that you should be aware of. Some LLCs elect to be taxed as a corporation rather than as a partnership (a type of PTE). Alternatively, South Carolina allows LLCs to pay income tax at the entity level. If you make this election, your LLC will be taxed at the entity level on behalf of the members (owners). You'd then claim a tax credit on your personal return for the tax already paid on your behalf by your LLC. You'll need to make this election every year. You'll report and pay these state taxes to the DOR.
In addition to income tax, your LLC might be responsible for reporting and paying sales tax, withholding employee wages, and paying unemployment insurance (UI) tax. You'll register to withhold and pay wages and to report and pay sales tax through the USTC. You'll need to register to pay the UI tax to the South Carolina Department of Employment & Workforce.
See our article on South Carolina tax filing requirements for more details.
Yes. To do business in South Carolina, all LLCs organized outside of the state (called "foreign LLCs") must register with the SOS. Your foreign LLC must appoint a registered agent for service of process that's physically located in South Carolina.
To register, you must file an Application for a Certificate of Authority to Transact Business with the SOS. Along with your application, you must include a certificate of existence or good standing or a similar document from your home state that's not more than 30 days old.
You can file the certificate online or by postal mail. As of 2024, the filing fee to register your foreign LLC is $110.
Before filing, make sure your LLC's name is available in South Carolina. If your LLC's name isn't available, you must use a fictitious name to transact business in South Carolina. To use a fictitious name, you must deliver to the SOS a copy of a resolution to adopt the fictitious name. If your LLC is member-managed, then the members must adopt the resolution. If the LLC is manager-managed, the managers must adopt the resolution.
(S.C. Code §§ 33-44-1001 and following (2024).)
See our article on qualifying to do business outside your state for more guidance.
Yes. For most formation purposes, a South Carolina single-member LLC is considered the same as a multi-member LLC. The steps to form a single-member LLC in South Carolina are generally the same as those listed above.
Single-member LLCs do have additional flexibility when it comes to filing a tax return. To learn more, see our article on how single-member LLCs pay federal income tax.
Some states either require or allow people who provide professional services to form a professional business entity such as a professional limited liability company (PLLC) or professional corporation. Typically, examples of professional services include architects, attorneys, dentists, certified public accountants, and more. Generally, if you provide a service that requires you to obtain a South Carolina state license before practicing, then you are a professional service.
South Carolina doesn't recognize PLLCs. If you perform a professional service, then you can form a regular LLC. Alternatively, you can form a professional corporation.
If you reach the point where it's time to close your business and cease all operations, then you'll want to properly dissolve your LLC to limit your liability for lawsuits and government fees. To dissolve an LLC in South Carolina, you should:
(S.C. Code §§ 33-44-801 and following (2024).)
You'll also need to close your tax accounts and take any other steps necessary to close out your business. See our article on what you need to do when closing your business for more in-depth information and guidance.
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