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Cost to form an LLC in South Carolina - $125 online filing, $110 by mail
Filing Time - It normally takes less than 2 weeks for the LLC paperwork to be approved in South Carolina when filing by mail and 1-2 days when filing online.
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The Limited Liability Company (LLC) is a popular business entity choice structure for many businesses starting in South Carolina. The LLC provides personal liability protection and has the potential to save money on taxes. With a little research, you can learn how to form an LLC in South Carolina without an attorney.
Unlike a sole proprietorship or partnership where the small business owner can be personally liable for lawsuits against the business, the LLC is a separate legal structure, protecting for the business owner’s personal assets.
Related: How Does an LLC Protect You?
Besides the liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration and management flexibility.
Forming an LLC in Alabama is fairly straightforward, but it’s nice to have some support in case you have questions or get stuck. IncFile and Inc Authority provide LLC formation guidance for only the cost of the state fees!
To form a Limited Liability Company in South Carolina, file the Articles of Organization with the South Carolina Secretary of State. The LLC filing fee is $125 when filing online and $110 when filing by mail.
Approval for the LLC is typically around 1-2 business days when filing online and less than 2 weeks when filing by mail.
HOW TO FILE THE ARTICLES OF ORGANIZATION AND FORM A SOUTH CAROLINA LLC
The steps for filing online or by mail are largely the same. The screenshots show how to file online.
- Begin by registering for an account on South Carolina Secretary of State’s website. If you prefer to fill out and mail the application, download the Articles of Organization Form.
- Next, select the “Start a New Business Filing”.
Step 1: Business Name Search
First, we search the Secretary of State’s database to see if the name we want to use is available. You can also check on available LLC names in South Carolina before going through the filing process to be sure the one you want is available. The reason for this search is that the name of the LLC also has to differ from other entity names registered with the Secretary of State.
Enter the name you want to search for and click “Search” to see if the name has been reserved. If the name is available, a message comes up that says “This name is available” If you get that message, click on the “Add New Entity” button.
Before settling on a name, you may want to do a domain name search to try and match your business name and website address.
Step 2: Form Selection
Is the organization a South Carolina entity? – If you are filing an LLC for the first time and located in South Carolina, you will generally select “Domestic Entity”. If the LLC was formed in another state and wanting to do business in South Carolina, select “Foreign Entity”.
Choose a business type to see a list of forms – Open the drop-down menu and select “Limited Liability Company”.
Available Forms – Select the Start Filing buttor for “Articles of Organization” to form a new LLC.
Step 3: Contact Information
Enter the contact information for the person filing the Articles of Organization.
Step 4: New Entity Name
The name you checked earlier will automatically fill this field. Enter the name exactly as you like and enter the cororate ending. This ending describes the type of business entity. Available endings include:
- Limited Liability Company
- Limited Company
- Ltd. Co.
A comma may be used after the business name and before the corporate ending. “Cowboy Cleaners LLC” and “Cowboy Cleaners, LLC” are both acceptable.
Step 5: Registered Agent Information
To have an LLC in South Carolina, a Registered Agent must be identified. The Registered Agent can either be a resident of South Carolina or a Registered Agent service. The agent must have a physical address in the state (PO Boxes are not allowed) and act as a point of contact to receive legal documents, tax notices, summons, subpoenas, etc on behalf of the LLC.
Even though the business owner can be the registered agent, their name and address become public record and with that comes a loss of privacy. This is more important for some entrepreneurs, especially when they are doing business from home.
Step 6: Initial Designated Office
Enter the street address, city, state and zip code of the initial designated office. This address can be the physical address of the LLC or it can be the address where the business records are stored. The initial office has to be an address in South Carolina but can not be a PO Box.
Step 7: Management
This section is asking whether the LLC is Member-Managed or Manager-Managed.
- Member-Managed LLCs have an active involvement in the management of the LLC.
- Manager-Managed LLCs are hired by the members to run the LLC, similar to a CEO of a corporation.
Most LLCs are member-managed and would not check the box.
Step 8: Member(s) Liable for it’s debts?
Most filers skip this step, but if one or more of the members will be liable for the debts and obligations of the LLC, check the box.
Step 9: Company Term
In this section, you can indicate how long the LLC will remain in existence. Most LLCs will choose a Perpetual duration and skip this step, however some businesses (usually investment related) will have a specific closure date. If you have a specific end date in mind, click the “Term Company” box and enter the date.
Step 10: Delayed Effective Date
If you want the LLC to start immediately as most filers will, leave this step blank. If you want to LLC to start later, enter a date less than 90 days in the future to start. The main reason for delaying the LLC start date is when the filing is being done close to the end of a calendar year and the business isn’t going to have any activity until the start of the year. By delaying until the following year they will reduce the number of end-of-year filings.
Step 11: Organizer Information
An LLC Organizer is someone involved with the formation of the Articles of Organization. The Organizer may or may not become a member, such as a mentor, attorney or accountant, but any of the initial members can be listed as an organizer.
Only one organizer is required, but more can be listed if desired.
Last, either an organizer or filer must select the drop-down menu for the “Who is signing this form” question.
Step 12: Summary of Forms
An LLC that plans to elect corporation tax status will need to file form CL-1. If the LLC plans to be taxed like a disregarded entity (sole proprietorship) or partnership can continue. The tax status will be filed with the IRS when the EIN is filed. By default, single-member LLCs are taxed like a sole proprietorship while multi-member LLCs are taxed like partnerships.
Step 13: Pay and File
If certified documents are required, check the boxes for “Certificate of Existence” or the “Articles of Organization”. Non-certified documents will be available once the entity is filed. Certified documents can be obtained at any time in the future.
Companies like IncFile and IncAuthority help guide you to make sure it’s done right and you only pay the normal state fees.
Check out our reviews of popular LLC formation services to learn more.
Tasks After Forming Your LLC
Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.
Prepare an Operating Agreement
The operating agreement is a document that governs the framework of an LLC. This document covers items like ownership rights, member responsibilities, how profits and losses are distributed and more.
Most states do not require an LLC to have an operating agreement but it is still worth considering. Without an operating agreement:
- The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit
- Member’s personal liability protection may be diminished
- Members may not have a full understanding of their roles and responsibilities which could lead to costly disputes in the future
Obtain an EIN
The EIN or Employer Identification Number is a unique 9-digit number for a business. Similar to a social security number for an individual, the EIN identifies business entities for tax purposes.
The EIN will be needed in order to open a bank account, register for business licenses and permits, file tax returns, pay payroll taxes and more.
Related: How to Apply for an EIN
Open an LLC Bank Account
Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.
Several documents will be needed to open a business bank account such as:
- A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
- Copies of the original formation paperwork from the state showing the creation of the LLC.
- Driver’s licenses of the members.
- Depending on the age of the LLC, a South Carolina Certificate of Good Standing may be needed to prove the LLC is active and in good standing with the state.
Apply for Business Licenses and Permits
Depending on what your business does and where it is located, there will likely be a variety of business licenses and permits to register for before starting. Some common registrations include:
- Business License – Some cities require businesses to obtain licensing before they can start. In some cases, even home-based businesses must have licensing in order to legally operate.
- Professional License – Certain services such as barbershops, accountants, salons and others must be licensed.
- Retail License – In order to sell products and certain services, registration with the South Carolina Department of Revenue will be necessary.