Forbes: This Business Banking Fintech Crossed $1 Billion in Assets on the Platform

How to Start an LLC in South Carolina (May 2024 Update)

Meow Technologies, Inc.

Meow Technologies, Inc.

A limited liability company (LLC) combines the tax benefits of a partnership with the liability protections of a corporation. Forming an LLC shields your personal assets from business debts and claims, only exposing the business's assets. LLCs also provide flexibility in ownership, management structure, and taxation options.

With so many advantages, it's no wonder LLCs have become a go-to choice for small business owners and entrepreneurs. If you’re looking to launch a business in South Carolina, starting an LLC is likely the best route to take. While the process may seem complicated, it only takes six straightforward steps to set up your South Carolina LLC.

This guide will walk you through each requirement in detail, including choosing a business name, designating a registered agent, filing formation documents, creating an operating agreement, obtaining licensing, and staying compliant. With a little work upfront, your South Carolina LLC will be off and running in no time!

Choosing an Available Business Name

The first official step is to pick a unique name for your South Carolina LLC. Your chosen name needs to comply with the state's naming guidelines and check for availability against current names.

LLC names in South Carolina must include the words "Limited Liability Company," the abbreviation "L.L.C." or "LLC," or the abbreviations "LC" or "L.C." You also can't use restricted words that imply your LLC is a bank, university, or government agency unless you meet strict licensing criteria.

Before settling on a name, verify availability by checking the Secretary of State's database. If your desired name already exists, you’ll have to select a new one. You're free to reserve a name for 120 days for a $25 fee while preparing your additional paperwork.

Many LLCs also use a “doing business as” name or DBA as their public-facing brand name, while the official LLC name meets the state guidelines. Typically no registration is needed for your DBA.

Appointing a Registered Agent

South Carolina requires all LLCs to designate a registered agent, which is a person or business entity that agrees to accept service of process and official documents on behalf of the LLC. This agent must have an in-state physical address (no P.O. boxes allowed) and be available during normal business hours.

You have three options when selecting a registered agent:

  • Yourself
  • Another LLC member or manager
  • A third-party registered agent service

Using a professional service can provide an extra layer of privacy since their address will be on public record rather than your home or office address.

Filing the Articles of Organization

To legally form your LLC, you must file Articles of Organization with the Secretary of State, either online or through the mail. Preparing your Articles of Organization isn’t as complex as it sounds – it’s basically just filling out a form with some key information.

You’ll need to provide your LLC’s name, registered agent and their address, the principal address for your LLC, the names and addresses of each organizer, details on management structure, duration period of the LLC, and member liability status.

The filing fee depends on your submission method, but ranges from $110-$125. Once the Secretary of State approves your documents, you will receive an official certificate of organization signifying your LLC now exists as a recognized legal entity.

Creating an Operating Agreement

While not technically required, creating an operating agreement for your South Carolina LLC is highly recommended. This document establishes internal business practices and policies that aren’t listed in your formation paperwork.

Typical provisions include member percentages/ownership breakdown, voting procedures, management structure, profit/loss distribution, buy-sell clauses, and measures for dissolving the LLC. Having these details mapped out ahead of time can prevent disagreements down the road.

Your operating agreement acts as an instruction manual for how your LLC will function and gives you greater credibility in court if disputes arise. It's meant to be an internal guiding document rather than filed with any government agency.

Obtaining an EIN

Most LLCs need a Federal Employer Identification Number (EIN) for tax and banking purposes. Also known as a Federal Tax ID Number, EINs allow LLCs to open business bank accounts, apply for business licenses, hire employees, and file taxes appropriately.

Sole proprietorships can use Social Security numbers instead, but multi-member LLCs must have an EINeven if they don't plan to hire employees. The EIN formally identifies your business entity to the IRS for tax reporting and deductions.

You'll need to provide details on your LLC's ownership structure and purpose. When applying online, you can obtain your EIN instantly after submitting your information.

Complying with Licenses, Permits, Taxes and More

Local Business Licenses

While there’s no statewide general business license, most cities and counties in South Carolina do require local business licenses. Check your local municipal website for details on obtaining one, including any zoning permits or other approvals you might need. Costs and requirements can vary based on your LLC’s activities.

State Tax Registration

You may need to register your new LLC with the South Carolina Department of Revenue, especially if you plan to hire employees or collect sales tax. The DOR registration allows you to obtain any tax licenses your LLC needs and file state taxes appropriately. You can register online through the state’s business portal.

Federal and State Taxes

LLCs themselves don’t pay federal income taxes. Instead, earnings and losses “pass through” the business to the LLC owners. The individual owners then report that activity on their personal tax returns. LLCs default to being taxed as partnerships if multi-member, while single-member LLCs default to sole proprietorships.

You can elect an alternate tax status like S-Corp or C-Corp by filing with the IRS. Just remember that state taxes mirror federal taxes for LLCs. So you would file South Carolina taxes the same way you file federal based on your LLC’s structure.

Ongoing Obligations

Staying compliant with annual filings and reports is crucial to keep your LLC in good standing. Unlike some states, South Carolina has no formal ongoing filing requirements. You won’t need to submit annual reports or pay annual state fees. But do be sure to keep up with your tax filings, licensing renewals, and registered agent services.

Frequently Asked Questions

How much does it cost to form an LLC in South Carolina?

The state charges a $110-$125 filing fee to establish an LLC, depending on online vs paper submission. You also may need to pay a small fee to reserve your business name and minimum incorporation fees if using an LLC formation service. Ongoing costs will include registered agent fees, licensing, taxes, and legal/accounting help.

What are the main advantages of starting an LLC?

LLCs offer liability protection by separating your personal assets from business assets, flexibility in management and ownership decisions, pass-through taxation benefits, and credibility with customers. LLCs tend to provide more structure than sole proprietorships but less paperwork than corporations.

Is South Carolina a business-friendly state for LLCs?

South Carolina offers a very favorable environment for starting and running an LLC. There's no income tax on pass-through earnings, no corporate income tax, and no ongoing state fees. The LLC formation process is affordable and straightforward. SC does well in overall business climate rankings.

How long does it take to form an LLC in South Carolina?

If you submit your Articles of Organization online, expect approval within 1-2 business days. Filing by mail adds processing time, so allow 3-4 weeks total if using paper submission. You can complete all steps to legally form your LLC in under two weeks in most cases.

Conclusion

Launching a South Carolina LLC only takes six simple steps, even with having to name your business, appoint a registered agent, file formation paperwork, create an operating agreement, obtain licensing, and stay compliant.

Following this guide eliminates the complexity of getting your LLC off the ground. While legal and tax considerations still apply, you can formally establish your LLC's business structure in a quick and straightforward manner.

Make sure to thoroughly research additional requirements in your local county and municipality. Revisit your operating agreement as your business evolves. Stay in good standing by submitting timely filings and renewals.

Starting an LLC can feel intimidating, but South Carolina aims to create a welcoming environment for new businesses to help drive the state’s ongoing growth. Follow these best practices as you get your organization up and running. Before long, you’ll be reaping the many advantages of operating as a South Carolina LLC!

Meow Technologies is a financial technology company, not a bank or FDIC-depository insured institution. Likewise, Meow Technologies is not an investment adviser and none of the information presented herein should be relied upon as financial advice or a recommendation to make any financial decision nor should it be considered to be tax or legal advice. The information is the opinion of Meow Technologies for educational purposes and may not be suitable for all companies. Products, like the one described herein, are offered through Meow Technologies and are not advisory services which are only offered through Meow Advisory, LLC.** The FDIC’s deposit insurance coverage only protects against the failure of an FDIC-insured bank.**

Get started with Meow

Apply Now

Put your company's idle cash to work

TwitterLinkedIn

Resources

Legal

*Disclaimer: Meow Advisory LLC is a registered investment adviser. Registration as an investment adviser does not imply any level of skill or training.
For accounts opened through Atomic Brokerage LLC: Meow Advisory LLC has an engagement with Atomic Brokerage LLC (“Atomic Brokerage”), a registered broker-dealer and member of FINRA and SIPC , to bring you the opportunity to open a brokerage account. Brokerage services for customers of Meow Advisory LLC are provided by Atomic Brokerage. For more details about Atomic Brokerage, please see the Form CRS, General Disclosures, and the Privacy Policy. Check the background of Atomic Brokerage on FINRA’s BrokerCheck.
For subadvisory services for accounts opened through Atomic Invest LLC: Meow Advisory LLC has an engagement with Atomic Invest, LLC (“Atomic Invest”), an SEC-registered investment adviser, to bring you the opportunity to open an investment advisory account. Investment advisory services are provided by Atomic Invest. Companies which are engaged by Atomic Invest receive compensation of 0% to 0.85% annualized, payable monthly, based upon assets under management for each referred client who establishes an account with Atomic Invest (i.e., exact payment will differ). Atomic Invest also shares a percentage of compensation received from margin interest and free cash interest earned by customers with Meow Advisory LLC. Meow Advisory LLC is not a client of Atomic Invest, but our engagement with Atomic invest gives us an incentive to refer you to Atomic Invest instead of another investment adviser. This conflict of interest affects our ability to provide you with unbiased, objective information about the services of Atomic Invest. This could mean that the services of another investment adviser with whom we are not engaged could be more appropriate for you than Atomic invest. Advisory services through Atomic Invest are designed to assist clients in achieving a favorable outcome in their investment portfolio. They are not intended to provide tax advice or financial planning with respect to every aspect of a client’s financial situation and do not include investments that clients may hold outside of Atomic Invest. For more details about Atomic Invest, please see the Form CRS, Form ADV Part 2A, the Privacy Policy, and other disclosures. Brokerage services for Atomic Invest are provided by Pershing Advisor Solutions LLC (“PAS”), a registered broker-dealer and member of FINRA and SIPC.
Neither Atomic Invest nor Atomic Brokerage, nor any of their affiliates, is a bank. Investments in securities are Not FDIC insured, Not Bank Guaranteed, and May Lose Value. Investing involves risk, including the possible loss of principal. Before investing, consider your investment objectives and the fees and expenses charged by Atomic Brokerage and/or Atomic Invest.
See the Legal Section within the Meow website for additional agreements.

U.K. Gilt pricing quoted net of fees. ~5% U.K. Gilt yield is sourced from Investing.com December 2023 6-month United Kingdom 6-Month Bond Yield. ~5% Treasury Bill yield is sourced from treasurydirect.gov December 2023 12-week U.S. Treasury Bill auction.

**Disclaimer: Meow Technologies is a financial technology company, not a depository, bank or credit union, and your account at Meow is not, itself, an FDIC-insured product.

Meow currently partners with three banking providers. Banking services are provided by Third Coast Bank SSB; Member FDIC, Grasshopper Bank, N.A; Member FDIC, and FirstBank, a Tennessee corporation; Member FDIC.

By opening a Maximum Checking account through Meow and if you choose to receive banking services provided by Grasshopper Bank, N.A, you deposit your funds into a deposit account at Grasshopper Bank, N.A. which sweeps those funds into deposit accounts across a network of Federal Deposit Insurance Corporation (“FDIC”)-insured banks, for up to the current standard maximum deposit insurance amount (“SMDIA”) of $250,000 per eligible depositor, per destination institution, for each ownership capacity or category, subject to applicable terms and conditions, including Grasshopper's ICS Deposit Placement Agreement. Grasshopper Bank, N.A. uses a third-party vendor and agent to help administer this sweep process. Visit https://www.intrafi.com/network-banks/ for a list of the banks and savings associations with which we/Grasshopper, N.A. have a business relationship for the placement of deposits at destination institutions, and into which your deposits may be placed (subject to applicable terms with you, and any opt-outs by Grasshopper, N.A. or you). The current maximum deposit insurance amount for your funds is up to $125 million in FDIC insurance through the sweep network of Grasshopper Bank, N.A, subject to change at any time with notice from Meow and/or pursuant to applicable law. Terms and restrictions apply. Subject to applicable rate sheet. Interest rate on checking products quoted in Annual Percentage Yield (APY). Interest rates and yields are effective as per the date on the applicable rate sheet. See applicable terms and restrictions and refer to the applicable rate sheets for additional information.

By opening a Maximum Checking account through Meow and if you choose to receive banking services provided by Third Coast Bank SSB, you deposit your funds into a deposit account at Third Coast Bank SSB. If you also hold funds in a sweep program with Third Coast Bank SSB, Third Coast Bank SSB sweeps those funds into deposit accounts across a network of FDIC-insured banks, for up to the current SMDIA of $250,000 per eligible depositor, per receiving bank, for each ownership capacity or category, including any other balances you may hold at that receiving bank directly or indirectly through other intermediaries, including broker-dealers. Third Coast Bank SSB uses a third-party vendor and agent to help administer this sweep process. Visit Third Coast Bank SSB for a list of the banks and savings associations with which we/Third Coast Bank SSB have a business relationship for the placement of deposits at receiving banks, and into which your deposits may be placed (subject to applicable terms with you, and any opt-outs by Third Coast Bank or you). The current maximum deposit insurance amount for your funds is up to $50 Million in FDIC insurance through the sweep network of Third Coast Bank, subject to change at any time with notice from Meow and/or pursuant to applicable law. Terms and restrictions apply. Subject to applicable rate sheet. Interest rate on checking products quoted in Annual Percentage Yield (APY). Interest rates and yields are effective as per the date on the applicable rate sheet. See applicable terms and conditions and refer to the applicable rate sheet for additional information.

By opening a Maximum Checking account through Meow and if you choose to receive banking services provided by FirstBank, a Tennessee corporation, you deposit your funds into a deposit account at FirstBank, which sweeps those funds into deposit accounts across a network of FDIC-insured banks, for up to the current SMDIA of $250,000 per eligible depositor, per destination institution, for each ownership capacity or category, subject to applicable terms and conditions, including FirstBank's ICS Deposit Placement Agreement. FirstBank uses a third-party vendor and agent to help administer this sweep process. Visit IntraFi for a list of the banks and savings associations with which FirstBank has a business relationship for the placement of deposits at destination institutions, and into which your deposits may be placed (subject to applicable terms with you, and any opt-outs by FirstBank or you). The current maximum deposit insurance amount for your funds is up to $125 million in FDIC insurance through the sweep network of FirstBank, subject to change at any time with notice from Meow and/or pursuant to applicable law. Terms and restrictions apply. Subject to applicable rate sheet. Interest rate on checking products quoted in Annual Percentage Yield (APY). Interest rates and yields are effective as per the date on the applicable rate sheet. See applicable terms and restrictions and refer to the applicable rate sheet for additional information.

***FDIC insurance coverage is only available to protect you against the failure of an FDIC-insured bank that holds your deposits (and does not protect you against the failure of Meow or other third party). Your account with Meow and all services provided to you are subject to the Meow Terms of Service (“Account Agreements”) and other applicable terms and no other representations or warranties, express or implied, are provided to you except as expressly set forth in those written Account Agreements. If you have any questions regarding your account, please contact team@meow.com.

FirstBank Funds Availability Notice

FirstBank’s general policy is to allow you to withdraw funds deposited in your account on the first business day after the day we receive your deposit. Funds from electronic deposits will be available on the day we receive the deposit. In some cases, we may delay your ability to withdraw funds beyond the first business day. Then, the funds will generally be available by the SECOND business day after the day of deposit.