How To Form an LLC in SC: Everything You Need to Know
Entrepreneurs have likely wondered how to form an LLC in SC. An LLC, or “limited liability company,” is a type of business structure that is quite appealing to a business because of the many advantages it has.3 min read
How to Form an LLC in SC
Entrepreneurs have likely wondered how to form an LLC in SC. An LLC, or “limited liability company,” is a type of business structure that is quite appealing to a business because of the many advantages it has.
A limited liability company protects its owner(s) from personal liability. If the LLC has certain debts or legal liabilities, the owner will not be held personally liable, and the creditors will not be able to reach the owner’s personal assets. The very narrow exceptions to this rule are if the owner acted unethically or negligently.
LLCs also require less paperwork than corporations. There are less rigid formalities when forming an LLC, and although it is still regulated by the state, the state does not require the LLC to do as much as a corporation.
To create an LLC in South Carolina, there are a few basic requirements that are easy enough for an individual to do on their own. However, if you are unsure or have any more questions, you should contact an attorney in South Carolina who specializes in LLC formation.
Forming an LLC in South Carolina: Five Easy Steps
1. Choose a name for your business
Choosing a name for your LLC is probably one of the hardest steps in the formation process. First, you need to make sure that there is not already an existing business with the same name or a name that is substantially similar. To do this, you can run a search through South Carolina’s business name database.
Once you have chosen a name that is not already in use, you must incorporate an identifier term such as “LLC,” “Limited Co.,” or “Ltd.” somewhere in the name. An LLC’s name cannot have the word “incorporated” or “Inc.” in the title because it is misleading to the public.
You should also think about securing a domain name. Even if you are not going to be creating a website right away, many businesses need to have an online presence to be successful. In addition, you will want to buy the domain name as soon as possible to prevent other competitors from buying it first. If the domain you want is available, you can reserve it for up to three months for a nominal fee of $25.
2. Designate a registered agent
To be a valid LLC in South Carolina, you must designate a registered agent. A registered agent can be an individual or another corporation, but they must be residents of the state. The purpose of a registered agent is to accept legal documents on the LLCs behalf, and thus, a physical street address must be on file with the South Carolina Secretary of State.
3. File Articles of Organization with the South Carolina Secretary of State
To register your LLC in the state of South Carolina, you must file Articles of Organization. South Carolina provides a fillable form on its official website. Articles of Organization contain basic information about the LLC, such as the LLC’s name, address, owners, purpose, etc. To file the Articles of Organization, South Carolina requires a one-time $110 filing fee. You can expect your LLC filings to be processed typically within two business days.
4. Create an Operating Agreement for your LLC
An operating agreement lays out the LLC’s rules and procedures. For instance, it can include things such as each manager’s financial obligations, daily responsibilities, the procedures for adding new owners, etc. While the formation of an operating agreement is not required by state law, it is highly advised and a seen as a matter of professionalism to do so. In fact, if an LLC has an operating agreement, South Carolina will recognize it as a governing legal document.
5. Obtain an Employer Identification Number for tax purposes
An Employer Identification Number (“EIN”) essentially just identifies your LLC for tax purposes. You can think of it as a social security number for your business. An EIN will be required when the LLC files its taxes and may be required if it opens up a bank account.
If you need help with forming an LLC in South Carolina, you can post your legal need (or post your job) on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.