South Carolina LLC Formation: Everything You Need to Know
South Carolina LLC formation involves choosing a business name, filing the Articles of Organization, and obtaining necessary licenses and permits to operate the business.3 min read
South Carolina LLC formation involves choosing a business name, filing the Articles of Organization, and obtaining necessary licenses and permits to operate the business.
Forming a South Carolina LLC: An Overview
Forming an LLC comes with several benefits. For instance, it protects you from personal liability for business loans and liabilities. The South Carolina Code of Laws under the Uniform Limited Liability Company Act governs the formation and operation of LLCs in South Carolina.
There is minimal paperwork involved in forming an LLC in South Carolina. You just need to complete a few forms. Begin by choosing a unique name for your LLC. Reserve it if necessary. Next, file the Articles of Organization with the Secretary of State. You must also obtain the required business permits, IDs, and licenses before commencing your operations.
Choose a Business Name
Choose a unique name suitable for your business. It must end with something like Limited Liability Company, LLC, or L.L.C. Also, it must be different from and not confusing with the names of existing businesses registered in South Carolina.
Conduct a Name Search
Perform a name search to confirm whether your proposed business name is available for registration. The business name database of the Secretary of State is accessible online. Additionally, you may want to check whether a matching domain name is available for developing a business website.
Reserve Your Name
If your business name is available for registration, you may want to reserve it with the Secretary of State so that no one else uses it while you prepare and file your Articles of Organization. In South Carolina, you can reserve a business name for 120 days. To do this, you need to submit a name reservation application and pay a $25 fee.
Also, consider registering your trademark. This offers an additional layer of protection if others try to sell goods or services in your name.
File the Articles of Organization
The next step is to prepare and file Articles of Organization. You can download and print a form from the Secretary of State's website, and submit it personally in the office, send it by mail, or even submit it online. For online submission, you must create a user account.
You must provide the following information in the Articles of Organization:
- Name of your LLC
- Your business address
- Name and physical address of your statutory agent, who has consented to receive service of process on behalf of your company
- Names, addresses, and signatures of all the organizers
- Names and addresses of all the managers
- If you would like to create the LLC from a later date, the effective date from which it would come into effect
- Whether you are forming the LLC for a specific duration
- Whether the LLC is member-managed or manager-managed
- Liability of the members
The state filing fee for Articles of Organization is $110. Additionally, you must pay $15 for as Electronics Records Access fee. The office of the Secretary of State takes about 7-10 working days to process your Articles of Organization.
Note that you must appoint a state-registered agent for service of process before filing your Articles of Organization.
Prepare an Operating Agreement
An LLC operating agreement is an internal document that outlines the governance and operating procedures of your company. Although the state of South Carolina does not require that you draft an operating agreement, it is safe from a legal standpoint to have one. This document should include the following information:
- Ownership percentage of each member
- Voting power, rights, and responsibilities of members
- Procedures for the company's day-to-day functioning
- Procedures for convening and holding meetings
- Rules for the sale and transfer of members' interests in the company
Complete Other Requirements
After you have formed an LLC, get an Employer Identification Number (EIN). However, in the case of a single-member LLC, you can use your Social Security Number in place of an EIN. If your company collects sales tax or has employees, you must obtain a state tax ID from the state Department of Revenue.
Finally, obtain all the necessary licenses and permits applicable to your industry. In South Carolina, you usually need to get a business license from the municipality in which you operate your business.
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