How to Start Your Own LLC in South Carolina

LLCs separate personal and business liabilities, meaning your personal assets are generally shielded if the business faces lawsuits or debts. Moreover, LLCs are typically pass-through tax entities, allowing profits and losses to flow directly to members' personal tax returns, avoiding corporate-level taxation unless you choose otherwise.

Below is a step-by-step guide to forming an LLC in South Carolina and ensuring you remain compliant with state and federal requirements.

1. Name Your South Carolina LLC

Choosing a strong and legally compliant business name is critical, as it forms the foundation of your branding and legal identity. Start by clarifying your business concept and mission, as this will guide your naming choices. Once you have potential names, test them with trusted colleagues or friends to see which resonates best. You should also perform an online search to ensure the name is available as a domain and not being used by a competitor. Online business name generators can provide inspiration but should not replace human judgment, since they may overlook nuances relevant to your industry.

South Carolina law requires your LLC name to include "Limited Liability Company" or an accepted abbreviation such as LLC or L.L.C. The name must also be distinguishable from other registered businesses in the state and cannot suggest affiliation with government agencies. Words such as "bank," "insurance," or "university" require state approval to be included.

After narrowing your options, check the U.S. Patent and Trademark Office to ensure your name isn't federally trademarked, protecting you from potential legal disputes if you expand nationally.

If you want to secure the name before filing, South Carolina allows you to reserve it for 120 days for a $25 fee by mailing the Name Reservation Form to the Secretary of State:

Address:
Secretary of State
Attn: Corporate Filings
1205 Pendleton Street, Suite 525
Columbia, SC 29201

Doing Business As (DBA)

If you plan to operate under a different name than your LLC, you'll need to register a DBA or fictitious business name. In South Carolina, DBAs are registered at the county level, not with the state. Fees typically range from $10 to $20 depending on your county. DBAs are useful for diversifying product lines or branding separate business activities under one LLC. Keep in mind, DBAs must not conflict with existing registered business names, and trademark protection is recommended for nationally recognized DBAs.

2. Choose a Registered Agent

Every South Carolina LLC must designate a registered agent, an individual or entity authorized to receive official legal and tax correspondence on behalf of the company. The registered agent ensures that your LLC receives important documents such as lawsuits, subpoenas, or tax notifications promptly.

Requirements for a registered agent in South Carolina include being at least 18 years old, having a physical address in the state (P.O. Boxes are not allowed), and being available during normal business hours. Many LLC owners hire professional registered agent services for convenience, especially if they travel frequently or operate multiple businesses. You may also serve as your own registered agent if you meet the above requirements.

3. Determine Your Management Structure

South Carolina allows two types of LLC management: member-managed and manager-managed.

In a member-managed LLC, the owners (members) directly oversee daily operations and decision-making. This structure is ideal for small LLCs where all members are actively involved in the business.

Manager-managed LLCs appoint one or more managers—who may or may not be members—to run daily operations. This structure works well when some members prefer to be passive investors rather than involved in routine management. If the Articles of Organization do not specify management type, South Carolina defaults to member-managed.

4. File Articles of Organization

Forming your LLC officially requires filing Articles of Organization with the South Carolina Secretary of State. You can file online or by mail using the form available on the Secretary of State's website. The Articles of Organization must include:

• LLC name and principal office address
• Registered agent name and address
• Organizer information

The filing fee is $110, and online filings are usually processed within one business day. Mail submissions may take up to two weeks. Once approved, your LLC officially exists as a legal entity in South Carolina.

Secretary of State Contact:
Address: 1205 Pendleton Street, Suite 525, Columbia, SC 29201
Phone: 803-734-2158
Website: South Carolina Secretary of State

5. Draft an Operating Agreement

Although South Carolina does not legally require an operating agreement, having one is highly recommended. This document formalizes the LLC's internal governance, ownership rights, voting procedures, profit distribution, and dispute resolution methods.

A solid operating agreement typically includes:

• LLC name and principal address
• Member information and ownership percentages
• Management and voting structure
• Procedures for adding/removing members
• Allocation of profits and losses
• Rules for dispute resolution and amendments

Even single-member LLCs benefit from an operating agreement, as it strengthens your legal position and clarifies business operations. Many attorneys can customize an agreement to fit your LLC's specific needs, or you can start with online templates and refine them with professional advice.

6. Obtain an Employer Identification Number (EIN)

An EIN from the IRS is required if your LLC has more than one member or hires employees. It functions as a Social Security number for your business, allowing you to open a bank account, hire employees, and file taxes.

The responsible party, typically an individual who controls the LLC, must provide their name and Social Security or ITIN number. You can apply online, by mail, or by fax through the IRS.

7. Obtain Business Licenses and Permits

Business license requirements in South Carolina vary by city, county, and industry. While the state does not require a general business license, most municipalities issue local licenses, and some industries require specific professional licenses.

If your business sells taxable goods or services, you must register for a Sales Tax License with the South Carolina Department of Revenue. Depending on your operations, you may also need permits for health and safety, zoning, signage, or fire compliance.

Consulting a business attorney or professional service can help ensure that all federal, state, and local requirements are met, protecting your LLC from fines or operational interruptions.

8. Determine Your Tax Status

By default, an LLC in South Carolina is a pass-through entity, meaning the business itself does not pay income taxes. Instead, profits and losses pass through to the members' personal tax returns.

Default Tax Treatment

Single-Member LLCs are treated like sole proprietorships, with income reported on Schedule C of the owner's tax return, subject to self-employment taxes.

Multi-Member LLCs are taxed as partnerships by default. The LLC files an informational return (Form 1065), and each member reports their share of profits and losses on their personal return.

Optional Corporate Tax Elections

LLCs can elect corporate taxation by filing IRS Form 8832 (C-Corp) or Form 2553 (S-Corp). C-Corporation taxation may help if members want to retain earnings within the business but comes with potential double taxation on dividends. S-Corporation status allows members to pay themselves a reasonable salary subject to payroll taxes, while additional profits distributed to shareholders avoid self-employment taxes.

Additional Steps for South Carolina LLCs

Open a Business Bank Account

Maintaining separate accounts for personal and business finances is crucial. A business bank account helps streamline bookkeeping, ensures liability protection, and makes tax preparation simpler. Banks will typically require your EIN and Articles of Organization.

Apply for a Business Credit Card

A business credit card helps establish business credit and can be used for startup expenses, providing financial flexibility without affecting personal credit.

Get Business Insurance

Insurance protects your investment from risks. Common types include general liability, professional liability (E&O), workers' compensation, property, equipment breakdown, commercial auto, and a business owner's policy (BOP) which combines coverage.

Keep LLC Records

Store formation documents, operating agreements, contracts, licenses, and financial records securely. Proper recordkeeping ensures compliance and protects your LLC in case of legal disputes.

South Carolina LLC FAQs