Starting an LLC in South Carolina is a promising opportunity due to its business-friendly environment. However, it’s not just about the promise; it’s about being prepared. Understanding the necessary steps to form your business correctly is crucial. Diving in without a clear understanding could affect the benefits of your initial business launch. By familiarizing yourself with the process and planning effectively, you can fully tap into the potential for success that South Carolina offers for new businesses.
To start an LLC in South Carolina, you’ll need to follow these steps:
Step 1: Name your South Carolina LLC
Step 2: Choose a Registered Agent
Step 3: File an Articles of Organization
Step 4: Received a Certificate From the State
Step 5: Create an Operating Agreement
Step 6: Get an Employer Identification Number
Step 1: Name your South Carolina LLC
When starting your LLC in South Carolina, you need to pick a name that follows these rules:
- The name must include “Limited Liability Company,or “LLC,”
- It should be unique and not the same as any other business registered in the state. You can check the availability of a name on the Secretary of State’s website.
- Avoid using terms that suggest your business is a government agency, like “FBI” or “State Department.”
- Words like “bank,” “lawyer,” or “credit union” might need extra paperwork and licenses.
You can refer to South Carolina’s official naming rules for a complete list of naming guidelines.
Additional considerations:
Reserve your name: You have the option to reserve a name for your limited liability company. This option is also available to foreign businesses if their original name is already taken in South Carolina, allowing them to reserve a different name. The cost to reserve a name is $25, and you must submit two copies of the application form.
Website domain: Even if you plan to build a website later, it’s wise to check if your desired name is available as a domain. Securing the domain name now will reserve it for your future use.
Step 2: Choose a Registered Agent
In South Carolina, your LLC must have a registered agent.
This registered agent is either a person or a company authorized to accept legal documents and official notices on behalf of your LLC.
The registered agent could be you, someone in your company, or a professional service. They need to meet these criteria:
- If it’s a company, it must be licensed to provide registered agent services.
- The agent needs a physical address in South Carolina.
- The agent must be available at this address during regular business hours to receive documents.
When hiring a registered agent in South Carolina, the cost ranges from $50 to $300.
Researching and asking questions about their services is important to ensure that you choose the best option for your business operation.
Step 3: File an Articles of Organization
After completing the initial steps, you can officially form your LLC by submitting the Articles of Organization to the South Carolina Secretary of State. Here’s how you can do it:
- Online Submission: The Secretary of State’s website recommends submitting documents online for faster processing and a reduced risk of rejection. You can securely pay online and save your forms to continue later if necessary.
- Mail Submission: Send your completed forms to the Secretary of State’s office at Corporate Filings, 1205 Pendleton Street, Suite 525, Columbia, SC 29201. Include two copies of the completed forms. Attach a check or money order for the $110 fee, payable to the South Carolina Secretary of State, and include a self-addressed stamped envelope to return documents.
The process involves submitting the Application for a Certificate of Authority to Transact Business for foreign businesses, with the same filing fee of $110 for domestic and foreign entities.
To prepare your Articles of Organization for an LLC in South Carolina, you’ll need to gather and include the following information:
- LLC Name: The official name of your LLC as it will appear in all legal documents.
- Registered Agent Information: Include the name and physical address of your agent in South Carolina, who will handle legal documents for the LLC.
- Delayed Effective Date: If you want your LLC to start on a specific future date, specify this date.
- Duration of the LLC: Most LLCs are set up to be perpetual, which means they continue indefinitely unless voluntarily or involuntarily dissolved. If your LLC has a specific end date (for a temporary project, for example), you must state this.
- Management Structure: Indicate whether the LLC will be managed by its members or appointed managers. If it’s manager-managed, provide the name and address of the manager(s).
- Organizer Information: The name and address of at least one organizer who will sign the Articles of Organization.
- Signatures: Each organizer forming the LLC must sign the Articles.
After you submit your Articles to the South Carolina Secretary of State, they will review your filing. Your LLC will be officially registered as a legal business entity if approved.
Step 4: Received a Certificate From the State
Once your LLC’s formation documents are approved, the state will issue a certificate confirming that your LLC officially exists. This certificate enables the LLC to obtain an Employer Identification Number (EIN), open a business bank account, and business license.
Step 5: Create an Operating Agreement
The operating agreement critically details how you will run your LLC. While South Carolina does not require filing this agreement, it is crucial for defining your business’s operations and structure. Creating a detailed operating agreement benefits you by resolving disputes related to financial management or other legal issues. Without such an agreement, the courts will settle disputes based on state law, which may not serve the LLC’s or its members’ best interests.
Here are the important information that is typically included in an operating agreement:
- LLC’s Name and Principal Address: Official name and primary business location.
- Duration of the LLC: Specifies whether the LLC is perpetual or has a defined end date.
- Registered Agent’s Name and Address: Provides details of the official responsible for handling legal correspondence.
- Information About the Articles of Organization: Reference to the foundational document filed with the state.
- Purpose of the Business: A description of what the business does.
- Members’ Rights and Responsibilities: Outlines the expectations for the members.
- Contributions by Members: Specifies each member’s initial contributions (financial, property, etc.).
- Distribution of Profits and Losses: How members share the LLC’s profits and losses.
- Members’ Voting Powers: Outlines members’ voting rights and decision-making procedures.
- Procedures for Admitting and Exiting Members: This section specifies how new members can join and how existing members can leave the LLC.
- Management of the LLC: Specifies whether members or a designated manager manage the LLC.
- Indemnification and Liability Clauses include provisions protecting members from certain liabilities.
- Buy-Sell or Buyout Provisions: Rules for handling the buyout or sale of a member’s interest due to death, disability, or other reasons.
Creating a detailed operating agreement is important for safeguarding your LLC and ensuring smooth operations.
Step 6: Obtain an Employer Identification Number
The Internal Revenue Service assigns a nine-digit Employer Identification Number (EIN) to identify your LLC for tax purposes. You can obtain your EIN online or by mail through the IRS.
An EIN serves several operations, including:
- Filing and managing taxes at the state and federal levels.
- Opening a business bank account.
- Hiring employees.
Follow these steps to start your business in Nevada quickly and easily. This guide will make setting up your LLC simpler.
LLC State Guides
How To Start an LLC in South Carolina FAQs
What is The Cost of Starting an LLC in South Carolina?
Starting an LLC in South Carolina costs $110 for the Articles of Organization. When you submit your LLC registration, this fee is payable to the South Carolina Secretary of State. Documents. Additionally, if you choose to reserve your LLC name before filing, there is a $25 reservation fee.
How Long Does South Carolina Take To Approve an LLC?
In total, mail filing approvals for South Carolina LLCs take 3-4 weeks, which accounts for the 5-10 business days (1-2 weeks) While, online filing approvals for South Carolina LLCs take 1-2 business days.
Does your LLC Need to File an Annual Report in South Carolina?
No, South Carolina does not require LLCs to file a yearly report unless they choose taxation as a C/S Corporation.
