Learn How to Form a South Carolina LLC or a Corporation

South Carolina Business Facts and Environment

SC Business Facts

Overall, South Carolina is a relatively business-friendly state. The cost of doing business is reasonable when it comes to the corporate tax environment, competitive labor environment, incentives available to start a business and cooperative government structure.

South Carolina currently ranks #4 for hosting a favorable regulatory environment. Coupled with low utility and operation costs, the Palmetto State has become a viable option for business formation.

Major Companies

South Carolina is the headquarters of many major companies including Cryovac, Michelin, Sonoco, The InterTech Group, Corestaff Services, AVX and Domtar.

Startup Environment

Small businesses thrive in South Carolina and employ over 772,000 people. The Palmetto State’s Department of Commerce helps entrepreneurs by offering business grants and incentive programs to help reinforce the state’s economy. These incentives include the job tax credit, no wholesale tax, no local income tax and no state property tax.

Step 1: Decide on a Business Structure

There are 3 basic options: a DBA, a Corporation or an LLC. Click here to learn more about business entities.

• A DBA or “Doing Business As” (also known as a “Fictitious Business Name” or FBN) is not really a separate structure, but just a different name that an individual or partners use as their business name.
• A Corporation is a separate entity (provides liability protection to the owners) that has a structure that includes shareholders, directors and officers. More complex than a DBA but the entity of choice for large companies and startups that intend to raise funding. Some professions are required to choose what is known as a “Professional Corporation” or PC (doctors, lawyers, architects, etc.).
• An LLC or “Limited Liability Company” is a newer type of business that is both a separate entity but provides very easy management (doesn’t require directors or officers) and taxation. Has largely replaced the DBA and Corporation in popularity recently as it provides liability protection but with much less complexity (and taxation) than a Corporation.

Step 2: Pick a Business Name

Choosing a business name is easier said than done – many legal and business problems can arise from picking the wrong name (you can always change it later but the less times you have to do that the better). In Step 3 we’ll show you how to search for the name in South Carolina, but we highly recommend you do the following before searching South Carolina state databases:

• Make sure you’ve covered the basics: unique, easy to understand/pronounce (practice saying it out loud: “Thanks for calling XYZ”) and can survive over time (“DVD World” is not timely). Here are some of our tips on business identity including logo and trademarks.
• Search the web for your proposed name. Search Google, Bing and DuckDuckGo as a “first sweep” for any potential conflicts, especially in your state or local jurisdiction. NOTE: If you intend to operate nationally or even internationally it will be even more important that your name be unique. This should cover many cases where a company name is being used but not officially trademarked (see next tip).
• Do a trademark search with the US Patent and Trademark Office (USPTO). This will be a very good indicator if your name will have any conflicts. There’s an art to trademark searches (trademark specialists will charge you handsomely to do a thorough search) but in our experience if you can use Google at a fairly advanced level you can reasonably clear a name yourself.

TIP: search misspellings, plurals, variations of spelling, sound-alikes and other versions of your chosen name to be sure it’s not already registered.

• Make sure your company name choice is available by searching the South Carolina Business Entity Database. NOTE: Make sure to search variations of spelling, plurals and misspellings.

Restrictions on South Carolina Business Name & Business Purpose

• Your South Carolina LLC name must contain the words “Limited Liability Company” or “Limited Company”, or the abbreviations “L.L.C.”, “LLC”, “LC” or “L.C.”.
• South Carolina corporation names must must contain the word “corporation”, “incorporated”, “company”, or “limited” or the abbreviation “corp.”, “inc.”, “co.”, or “ltd.”.

Step 3: Register the Business

Each state has its own requirements for registering a business. Now that you’ve chosen a business structure and selected your business name, here are the requirements to register your business in South Carolina.

How to form an LLC in South Carolina

• File the “Articles of Organization” with the South Carolina Secretary of State.
• Once the articles are filed and approved you will then need to properly organize the LLC (this also applies to “1-person LLCs”) by holding an “Organizational Meeting” which takes contributions from the members, issues Member Certificates, adopts the company Operating Agreement and more.

How to Incorporate in South Carolina

• File the “Articles of Incorporation” with the South Carolina Secretary of State.
• Hold an “Organizational Meeting” to determine the percentage of ownership for each shareholder as well as resolve to do tasks like open a company bank account, pay back pre-incorporation expenses, elect S-Corporation status and more.
• Corporations can elect S-Corporation status with the IRS by filing IRS Form 2553. Click here to learn more about S-Corporations.

NOTE: When registering a new company the Secretary of State can take several weeks to file the paperwork. You can expedite the process by hand delivering the documents directly to them or one of their field offices and paying an additional fee.

TIP: Check our order form to see how long South Carolina is currently taking to process regular and expedited orders.

How to File a DBA in South Carolina

• South Carolina does not require the registration of a DBA.

Optional Considerations when registering a South Carolina business

• Hire a professional Registered Agent. Many people list their home or business address on the Articles of Organization or Incorporation. This can cause issues because it becomes public record (you’ll get lots of junk mail). A professional Registered Agent will provide their address and forward any important documents to you, this is also convenient if you have to move (you don’t have to file forms or pay fees, just update your address with your agent).

Ready to register a business in South Carolina?

• We specialize in registering businesses in South Carolina.

Ready to Start Now? Let Us Do The Work

Sure, you could do all the steps above or you could spend 5-10 minutes on our order form and let us take care of it while you work on more important things.

• Learn more about our business formation service
• Read our verified reviews and 100% Satisfaction Guarantee
• Contact our friendly support team if you have any questions

Step 4: Obtain Your Federal Employer Identification Number

Your EIN is like your Social Security Number for your company. It’s required for Corporations and LLC’s and optional for DBA’s (if you don’t have any employees, then it’s required). However, if you are a DBA and don’t obtain an EIN you will be forced to use your Social Security Number on many documents so it’s typically recommended you obtain the EIN to prevent identity theft.

To obtain an EIN you can apply online with the IRS or via IRS Form SS-4.

TIP: We will obtain your EIN for you if you we form your company.

Step 5: Open Company Bank and Credit Accounts

To keep business and personal expenses separate, you should open a separate account for your business. In addition, getting business credit cards is how you begin to build a company credit profile (corporation or LLC required) and can later qualify for larger loans and lines of credit. To open the account simply call your chosen bank and inquire on the steps to open a business bank account. Typically you’ll need a) your filed paperwork b) your EIN c) a company resolution authorizing your company to open the account (signed by the owners, members, officers or directors, etc.).

TIP: Our business formation service includes a free banking resolution for your use

Step 6: Set-up An Accounting System

Setup your Accounting and Record-keeping system and learn about the taxes your new company is responsible for paying.

Company documents generally are required to be kept for 3 years, including: a list of all owners and addresses, copies of all formation documents, financial statements, annual reports, amendments or changes to the company. All Tax and Corporate Filings should be kept for at least 3 years. View our “Accounting & Financial Management” section for help with setting up an accounting system and purchasing accounting software.

Step 7: Obtain Licenses and Permits

Now that you’ve registered your business name you may need to obtain a business license for your company depending on the type of service you offer. This authorizes your company to do business in your city or county. Typically this also involves registering for state taxes and permits (the city may require them as part of the business licensing process).

TIP: We can help you identify the necessary forms to obtain your business license.

Step 8: Hire Employees (if applicable)

If you intend to hire yourself or others as a full or part-time employee of your company, then you may have to register with the appropriate State Agencies or obtain Workers Compensation Insurance or Unemployment Insurance (or both). View our “Employees & Payroll” section for help with hiring employees and processing payroll.

Step 9: Obtain Business Insurance

There are many types of insurance for businesses but they are usually packaged as “General Business Insurance” or a “Business Owner’s Policy”. This can cover everything from product liability to company vehicles. A decent policy can run as little as $300/year and offers a great extra level of protection. Click here to view our preferred provider of business insurance online.

Step 10: Systemize and Organize

Prepare the business as if someone needed to take it over and run it for you. This means have a method to process orders, pay bills, pay employees, pay taxes, maintain your permits, etc. Basically, try to make the operational aspect of the business as automated and efficient as possible so you can concentrate on growing your business. View our “Manage Your Company” section for help with systemizing and automating your business.

Step 11: Branding and Marketing

Now that you’ve set-up the company for success, you need to get the word out. Create a marketing plan for your products and services that targets your ideal customer. View our “Marketing & Sales” section for help for more information.

Step 12: Annual and Ongoing Requirements

DBA: South Carolina does not have a DBA requirement.

LLC: South Carolina LLCs do not file an annual report.

Corporation: Every year you will be required to file an Annual Report on the 15th day of the fourth month following your Corporation’s fiscal year end.

Ready to start a business in South Carolina?

• Our South Carolina filing services will help you get started as quickly as possible.

Important South Carolina Contacts

South Carolina Secretary of State
1205 Pendleton Street, Suite 525
Columbia, SC 29201
Phone: 803-734-2158

South Carolina Taxation Department

• South Carolina Department of Revenue

South Carolina Labor and Employment Department

• Department of Employment and Workforce

South Carolina Startup Resources

1. Small Business Administration (SBA)

• South Carolina District Office

2. SCORE South Carolina

• South Carolina SCORE fosters vibrant small business communities through mentoring and education.

3. South Carolina Legal Statutes

• South Carolina Business Corporation Act of 1988 – note this is the broad code that includes various other topics including business corporations.
• South Carolina Uniform Limited Liability Company Act of 1996 – the specific act that applies to South Carolina LLC’s.
• South Carolina Code of Laws Title 40 – Professions and Occupations – this includes regulations on South Carolina’s professions and businesses

4. South Carolina Chambers of Commerce

• South Carolina Chamber of Commerce
• Columbia Chamber of Commerce

5. SCBOS (South Carolina Business One-Stop)

• South Carolina Business One Stop (SCBOS) is a free, government-provided online source for existing and emerging businesses.

6. Angel.co South Carolina Startups

• A list of South Carolina Startups and South Carolina angel investors registered with Angel.co. Good research resource.

7. South Carolina Business News

• SC Biz News
• Columbia Business Report
• South Carolina – Business Publications – SCIway

8. South Carolina Department of Commerce

9. South Carolina Small Business Development Centers (SC SBDC)

10. South Carolina Green Business

• The Midlands Green Business program is designed to recognize South Carolina businesses that adopt sustainable and eco-friendly business practices.