Here are the steps you need to take to form a limited liability company (LLC) in South Carolina. For more information on how to form an LLC in any state, see Nolo's article How to Form an LLC.
Under South Carolina law, an LLC name must contain the words "Limited Liability Company" or "Limited Company," or the abbreviations "L.L.C.," "LLC," "LC," or "L.C." The word "Limited" may be abbreviated as "Ltd." and the word "Company" may be abbreviated as "Co."
Your LLC’s name must be distinguishable from the names of other business entities already on file with the South Carolina Secretary of State. Names may be checked for availability at the South Carolina Secretary of State business name database.
You may reserve a name for 120 days by filing an Application to Reserve a Limited Liability Company Name with the South Carolina Secretary of State Corporations Division. The reservation must be filed by mail. The filing fee is $25.
Every South Carolina LLC must have an agent for service of process in the state. This is an individual or business entity that agrees to accept legal papers on the LLC’s behalf if it is sued. The registered agent may be a South Carolina resident or a business entity authorized to do business in South Carolina. The registered agent must have a physical street address in South Carolina.
A South Carolina LLC is created by filing Articles of Organization with the Secretary of State. The articles must include:
An LLC operating agreement is not required in South Carolina, but is highly advisable. This is an internal document that establishes how your LLC will be run. It is not filed with the state. It sets out the rights and responsibilities of the members and managers, including how the LLC will be managed. It can also help preserve your limited liability by showing that your LLC is truly a separate business entity. In the absence of an operating agreement, state LLC law will govern how your LLC operates.
The operating agreement should include the following:
If your LLC has more than one member, it must obtain its own IRS Employer Identification Number (EIN), even if it has no employees. If you form a one-member LLC, you must obtain an EIN for it only if it will have employees or you elect to have it taxed as a corporation instead of a sole proprietorship (disregarded entity). You may obtain an EIN by completing an online EIN application on the IRS website. There is no filing fee.
If you are 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 is the right business structure for you, see What is a Limited Liability Company (LLC)?
It is important to make sure that your LLC's name is distinguishable from the names of other existing businesses on file with the South Carolina Secretary of State. You can conduct a name search for free on their website to make sure your proposed name is available.
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 will often cost you hundreds, if not thousands, of dollars in the process. Nolo's Online LLC formation service can complete all of the paperwork and filings for you, with packages starting at just $49.00. To learn more about the costs associated with forming and running an LLC, see How Much Does It Cost to Form an LLC?
South Carolina does not require LLCs to have operating agreements, but it is highly advisable to have one. An operating agreement will help protect your limited liability status, prevent financial and managerial misunderstandings, and ensure that you decide on the rules governing your business instead of state law by default. For more information, see The LLC Operating Agreement.
There is no state-wide business license required in South Carolina. But nearly all cities and counties require businesses to obtain a local business license. More information and links to city and county websites are at the South Carolina Business One Stop (SCBOS) website.
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). In most cases, you can begin the process online at the South Carolina Business One Stop (SCBOS) website. For more information on state LLC tax registration, see Nolo's article South Carolina LLC Annual Filing Requirements.
To do business in South Carolina, all LLCs organized outside of the state must register with the South Carolina Secretary of State. Foreign LLCs must appoint a registered agent for service of process. The agent may be a South Carolina resident or a business entity authorized to do business in South Carolina.
To register, you must file an Application for a Certificate of Authority to Transact Business with the South Carolina Secretary of State and pay a $110 filing fee.The application must be filed by postal mail.
The completed application must be accompanied by a certificate of legal existence or good standing from the foreign LLC’s home state that is not more than 30 days old.
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 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 Nolo’s article, How Single-Member LLCs Pay Federal Income Tax.
If you provide a licensed professional service in South Carolina and want to form an LLC, you will be required to form a professional limited liability company (PLLC). 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. Under South Carolina law, LLCs can be formed to provide professional services. However, only one specific type of service may be provided and all the owners of the LLC must be licensed or registered to perform the professional service for which the LLC was organized.
To learn more about forming a South Carolina PLLC, see our article, How to Form a Professional LLC in South Carolina.
If you reach the point where it is time to close your business and cease all operations, then you will want to properly dissolve your LLC to limit your liability for lawsuits and government fees. Learn about the steps you will need to take.