Setting up your new South Carolina business as an LLC can make doing taxes a lot simpler. In addition, if your business runs into any legal troubles, it can also help protect your personal assets.
Forming an LLC in South Carolina is straightforward once you understand the steps involved, and it’s affordable too. As I’m familiar with this process myself, I’ve broken it down into 6 simple steps you can follow to get started.
6 Steps to Start an LLC in South Carolina
1. Name Your LLC
Before you prepare your paperwork, you first need to choose a business name.
The name should comply with South Carolina’s naming guidelines for LLCs, which are as follows:
- Your business name must include an acceptable form or abbreviation of the words “Limited Liability Company.”
- Your business name cannot be currently in use by another South Carolina business. You can search the South Carolina Secretary of State’s business entity database to check whether it's available.
Once you settle on a business name that’s available, consider reserving it for 120 days by submitting an Application to Reserve a Limited Liability Company Name with the South Carolina Secretary of State Corporations Division.
This is an optional step – however, for just a $25 filing fee, you can guarantee that no other business will use your chosen name while you submit your LLC paperwork.
In South Carolina, you don’t have to use your LLC’s official business name when you’re doing business. Instead, you can use any name of your choice, known as a “DBA” – short for “doing business as.” If you choose to use a DBA, you need to register it with the counties your LLC does its business in.
2. Appoint a Registered Agent
In South Carolina, every LLC is legally required to designate a registered agent. A registered agent is an individual or business entity that can accept state and federal legal documents and court summons on behalf of your LLC.
The registered agent you appoint can be any individual (including yourself or any other member of your LLC) that has either a residence or business address within South Carolina.
You can also appoint a business entity that offers a registered agent service, as long as it has a street address within the state.
3. File Your Articles of Organization
The Articles of Organization are the documents that will officially establish your LLC as a legal entity. You can file the articles online or by mail with the South Carolina Secretary of State. The filing fee is $110.
For your Articles of Organization, you’ll need to fill out some basic information about your LLC, including the following:
- The full business name of your LLC, including its designation (the words that make it clear it’s an LLC)
- The initial business address that your LLC will use
- Your registered agent’s name and address
- Whether your LLC will be manager-managed or member-managed, including names and addresses of managers if applicable.
- The name and address of at least one of your LLC’s organizers
- The signature of each listed organizer
4. Write an Operating Agreement
In South Carolina, writing an operating agreement isn’t a legal requirement for LLCs. However, I’d recommend drafting one for your business anyway, as they bring several benefits.
An operating agreement is a document that lays out how your business will be run. This includes its management structure, the rights and responsibilities of its members, and its financial rules. In the event that your business runs into a conflict and a member of your LLC wants to leave, this document can help you resolve this and guide how you’ll move forward.
Having an operating agreement can also help you retain your personal liability by showing that your LLC is a legally separate business entity.
Without an operating agreement in place to clearly state your business policies, South Carolina state laws will govern how your LLC operates, and this could cause you certain legal and operational challenges.
5. Comply with South Carolina Tax Obligations
Once your South Carolina LLC is formed, you need to fulfill certain tax obligations to make sure your business is in full compliance with the state.
Depending on the type of business you plan to run, you may need to register your LLC with the South Carolina Department of Revenue. Some examples of LLCs that need to register are those that collect sales tax on retail products and services, and any LLCs with full-time employees.
To register your LLC to pay state taxes, simply navigate to the South Carolina Business One Stop website.
6. Get an Employer Identification Number (EIN)
All newly formed LLCs with more than one member must get an Employee Identification Number (EIN). You can apply for an EIN with the IRS for free, either online or by mail.
If you’re planning to operate as a one-person LLC, an EIN isn’t a necessity. However, getting one could be worth it as it can help you separate your personal and business finances.
Getting an EIN also brings several other benefits, such as allowing you to open a business bank account, file taxes as a company, and hire employees when you need to.
The Next Steps After Forming an LLC in South Carolina
Follow these steps to help ensure your business runs smoothly.
1. Set Up Your Payment Framework
You need a robust payment system to help your South Carolina LLC thrive. Pay.com is a reliable way for your business to start accepting online payments through credit and debit cards, digital wallets, and many other payment methods.
Signing up with Pay.com is easy, and once you’re all set, you can use our simple no-code solution to create a custom checkout page for your website. You can also choose to integrate our payment components into your website through our advanced developer API.
If your business doesn’t have a website, no worries. Pay.com lets you send custom Pay Links to your clients directly via text or email. You can even accept customer payments over the phone using the Pay Virtual Terminal.
2. Obtain South Carolina Licenses and Permits
Unlike many other U.S. states, South Carolina doesn’t require any state-wide business license. However, you need a local business license for most cities in South Carolina, and nine of its 46 counties. The nine counties that require business licenses are Beaufort, Charleston, Dorchester, Horry, Jasper, Marion, Orangeburg, Richland, and Sumter.
You also may need to get certain licenses and permits for your LLC depending on the kind of business you plan on running; this includes sales tax permits, zoning permits, and food service permits.
3. Purchase Business Insurance For Your LLC
In the event your LLC is faced with a lawsuit or employee accident, purchasing insurance beforehand can protect your company’s assets and cover these unforeseen costs.
The type of insurance you should pick will depend on the number of employees you have, the type of business you run, and several other factors. General liability insurance, health insurance, workers’ compensation, and commercial property insurance are some of the most common examples.
The Bottom Line
If you follow the steps I’ve outlined in this article, forming an LLC in South Carolina is a simple and straightforward process. Once your LLC is set up, you can start enjoying the various benefits this brings, including protecting your personal assets and simplifying your tax returns.
With Pay.com as your payment service provider, your LLC can start accepting a variety of payment methods as soon as it’s formed. Our industry-leading payment systems are scalable and secure. Pay.com is compliant with Level 1 PCI DSS, using cutting-edge security solutions such as multi-factor authentication.
Sign up with Pay.com now, and let us take care of your payments – spend your time perfecting your business instead.