South Carolina LLC: Everything You Need to Know
A South Carolina LLC refers to a limited liability company registered in the state of South Carolina in the United States.3 min read
South Carolina LLC
A South Carolina LLC refers to a limited liability company registered in the state of South Carolina in the United States.
A limited liability company (LLC) is a corporate structure that has a lot of benefits for a new business. It provides the tax protections of a corporation and the personal asset protection of a limited liability partnership. Some people refer to it as a hybrid corporate structure for this reason.
If you find that an LLC is for you and you have decided to register your LLC in South Carolina, then here are the steps to acquiring an LLC in South Carolina.
Step 1: Name Your LLC
This is not only the first but also one of the most important steps in filing for an LLC. To ensure your name will be a good fit, you need to do some research and thinking. Your name should be both memorable and also tell people what your business does. If you are a plumber, then that should appear in your name.
It should be easy to spell, pronounce and remember. You may want to avoid names that are hard to spell, pronounce, or are too long. It’s required to end the name with “Limited Liability Company,” L.L.C., or LLC.
Some words are limited in use for the name of a LLC. Restricted words are words that convey professional licenses like attorney, doctor, medical, or bank. If you use one of these restricted words additional licenses or certifications may be required. You also may be required to file for a professional limited liability company (PLLC).
Also prohibited are words that make it seem the company is part of the state or federal government. You may not use words like treasury, FBI, or government. In addition, you may not use a name that is already registered with the State of South Carolina. One additional step is to search the trademark database of the United States Patent and Trademark Office for similar trademarked or service marked names.
Step 2: Register an Agent
To register an LLC in South Carolina, you must have an agent in the state. This person will receive and send legal correspondence on the LLC’s behalf. A registered agent must be a person or corporation authorized to conduct business in the state of South Carolina or be a resident of South Carolina. It can be someone who is a member of the LLC, including the owner.
Step 3: Draft and File Articles of Organization
Articles of Organization answer many questions about what kind of management structure will be put in place. Your LLC can either be manager managed or member managed. Generally, member managed LLCs have a small number of members. Manager managed LLCs usually have large number of members. These are required by the state of South Carolina.
Step 4: Draft an Operating Agreement
South Carolina does not require an operating agreement, but it is highly recommended once you’ve formed a LLC. This is a legal document which clearly outlines the ownership, operating procedures, and processes for the LLC. This governing document sets out working and financial relations among the members (and between managers and members). The operating agreement should include six sections:
- Organization Structure
- Management Structure
- Voting Rights
- Capital Contributions of Members
- Distributions to Members
- Membership Changes
Step 5: Acquire an Employer Identification Number
The Internal Revenue Service provides Employer Identification Number (EIN) free of charge. This number is used to differentiate an employer from all other employers. Some have compared a business’ Employer Identification Number to a social security number for individuals.
An EIN is used when taxes are filed both at the state and federal level. Banks usually require an EIN in order to open a checking account for a LLC. This can be done online, but you can also print the form and mail it.
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