Key Takeaways

  • South Carolina requires corporations to file an annual report with their corporate tax return, but most LLCs do not unless taxed as a corporation.
  • To file annual report South Carolina forms, corporations typically use Form SC 1120, while S corporations use SC 1120S, and partnerships file SC 1065.
  • LLCs taxed as corporations must also submit Form CL-1 within 60 days of incorporation.
  • Online filing is available through the South Carolina Department of Revenue and is the fastest way to meet compliance deadlines.
  • Missing deadlines may lead to penalties of 5% per month and even administrative dissolution of the business.
  • Nonprofits, LLPs, and limited partnerships have separate filing and renewal requirements, including charity registration renewals.

South Carolina Annual Report

You should file your company's first South Carolina annual report less than 60 days from the day the business started. It registers your company with the S.C. Department of Revenue. Keep filing annual reports as part of your business's tax return.

Who Must File an Annual Report in South Carolina

Not every South Carolina business is required to file an annual report. Corporations are always required to submit one, while most LLCs are exempt unless they elect to be taxed as corporations. Specifically:

  • Corporations must file Form SC 1120 each year with the Department of Revenue.
  • S corporations use Form SC 1120S.
  • LLCs taxed as corporations must file the Initial Report of Corporations (Form CL-1) within 60 days of formation and then continue with annual returns.
  • Partnerships file Form SC 1065.
  • Nonprofits file Form SC 990-T with the Department of Revenue and must also renew with the Secretary of State’s Public Charities Division.

South Carolina Annual Reports for LLCs

Most LLCs are taxed as sole proprietorships or partnerships, so they don't have to submit an initial or annual report. However, an LLC that's taxed as a C-Corporation or an S-Corporation should file Form CL-1, the Initial Report of Corporations. The filing fee for the initial report is part of the fee for the articles of incorporation when you start your business. After that, use Form SC 1120 or Form SC 1120S to file your annual report with the South Carolina Department of Revenue. You'll need a South Carolina State Tax ID Number to submit the report.

Step-by-Step: How to File Online

Businesses can file annual reports online through the South Carolina Department of Revenue’s MyDORWAY portal. Filing online is encouraged because it is faster, provides instant confirmation, and reduces the risk of delays. Steps include:

  1. Log into your account on the MyDORWAY portal.
  2. Choose the appropriate tax return form (SC 1120, SC 1120S, or SC 1065).
  3. Complete the required sections, including financial information and registered agent details if applicable.
  4. Submit payment for any taxes owed.
  5. Save and print the confirmation for your business records.

Paper filing is also an option, but it is slower and may extend processing times.

How LLCs Are Taxed

The IRS taxes single-member LLCs like sole proprietorships, and multi-member LLCs are treated like partnerships. You can also choose C-corporation or S-corporation  taxation. An S-corporation setup for your LLC will help you save on self-employment taxes if your net income or your income after expenses is more than about $65,000 per year. Speak to an expert to find out which one is best for you.

Costs for Filing the Annual Return and Renewal

There's no fee for annual reports, but the fee for renewing your business license is $100 for most companies. It's $50 for non-profit corporations, and they don't need to file an annual report.

Common Mistakes to Avoid When Filing

Business owners sometimes face penalties because of preventable errors when they file annual report South Carolina forms. Common mistakes include:

  • Forgetting to file within 60 days of incorporation for corporations and LLCs taxed as corporations.
  • Submitting the wrong tax form (e.g., filing SC 1120 when SC 1120S is required).
  • Failing to maintain a current registered agent address.
  • Not paying the correct filing or renewal fee.
  • Overlooking the need to separately renew nonprofit registrations with the Secretary of State.

Carefully reviewing your filings and deadlines can help you avoid unnecessary fines and business disruptions.

South Carolina Business Compliance

The South Carolina Secretary of State doesn't have any requirements for an annual report, but businesses must file annual returns with the Department of Revenue. If these filings become delinquent, the Secretary of State could dissolve your company. Most corporations in the state should file SC 1120, the Corporation Tax Return. It includes an annual report. If your LLC is taxed as an S corporation, file form SC 1120S with the Department of Revenue. Nonprofits should file form SC 990-T instead.

Limited Liability Partnerships or LLPs should resubmit the application for registration yearly in person or through the mail. Pay the filing fee to the South Carolina Secretary of State. All partnerships, including LPs or limited partnerships, must also turn in the Partnership Return SC 1065 to the Department of Revenue once per year. Corporations should file the SC 1120 Corporate Tax Return instead.

Every year, nonprofits need to register with the Public Charities Division of the Secretary of State's office. They should file the Registration Statement for a Charitable Organization along with the Annual Financial Report Form online, by mail, or by fax.

Recordkeeping and Audit Preparation

In addition to maintaining copies of Articles of Incorporation and annual reports, South Carolina corporations should also:

  • Retain shareholder and board meeting minutes.
  • Keep proof of annual report submissions and tax payments.
  • Maintain financial statements and supporting records for audit purposes.
  • Ensure charitable organizations maintain donor records and financial disclosures to stay compliant with the Public Charities Division.

Good recordkeeping ensures smooth audits, helps demonstrate compliance, and protects the corporation in case of disputes.

Role of the Secretary of State vs. Department of Revenue

Business owners are often confused about whether filings go to the Secretary of State or the Department of Revenue (DOR). The distinction is important:

  • Secretary of State: Handles business formation, registration renewals for LLPs, limited partnerships, and nonprofit organizations, as well as charitable organization reporting.
  • Department of Revenue: Collects taxes and receives annual reports for corporations, S corporations, and LLCs taxed as corporations.

Failing to file with the correct office can delay processing or result in penalties.

Due Dates for Taxes in South Carolina

Here are the most common due dates for filing state taxes in South Carolina:

  • March 15th for corporations
  • April 15th for the Secretary of State and May 15th at the Department of Revenue for nonprofits
  • The date an LLP formed for the Secretary of State and April 15th for the Department of Revenue
  • April 15th for LPs or limited partnerships

Penalties for a Delinquent Annual Report

For every month your tax return is late, the Department of Revenue imposes a 5 percent penalty. The South Carolina Secretary of State can even dismantle your corporation and revoke its charter if you don't file your return and make the necessary payments. This would make doing business in South Carolina illegal.

Who Should File Tax Returns and Annual Renewals?

Renewals and annual reports should be signed by the CFO and the CEO. A corporate officer needs to sign returns meant for the Department of Revenue, and the incorporator and a corporate officer must sign form CL-1.

South Carolina Corporation Requirements

After forming a corporation, you should store copies of corporate records:

  • The company's Articles of Incorporation
  • Amendments
  • Bylaws
  • Resolutions adopted by the board of directors
  • Permanent records of actions by the shareholders without a meeting
  • Written communications to shareholders for the last three years
  • An alphabetical list of the names and addresses of all shareholders with the number and types of shares they have
  • The names and business addresses of the directors and officers
  • The last annual report filed
  • Federal and state income tax returns for the past 10 years.

Frequently Asked Questions

  1. Do LLCs in South Carolina have to file an annual report?
    Most LLCs do not. However, if your LLC elects to be taxed as a corporation, you must file Form CL-1 initially and then continue with annual corporate returns.
  2. How do I file an annual report online in South Carolina?
    You can file through the MyDORWAY portal by selecting the correct form (SC 1120, SC 1120S, or SC 1065), completing the information, and submitting payment.
  3. What happens if I miss the deadline?
    The Department of Revenue imposes a 5% penalty per month late. Continued noncompliance can lead to dissolution of your business by the Secretary of State.
  4. Do nonprofits need to file annual reports?
    Yes. Nonprofits file Form SC 990-T with the Department of Revenue and must also renew annually with the Public Charities Division of the Secretary of State.
  5. Is there a fee to file annual reports in South Carolina?
    There is generally no separate annual report fee, but corporations must pay a $25 license fee and applicable income/franchise taxes. Nonprofits pay reduced fees for registration renewals.

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