South Carolina LLC formation guide
South Carolina LLC formation guide
Title 33 Chapter 44 LLCs are affordable ($110 formation, no annual entity fee) but come with quirky default rules, hyper-local licensing, and strict registered agent expectations. This hub is the attorney-level reference I use when forming and maintaining South Carolina LLCs.
South Carolina LLC landscape
South Carolina’s Uniform LLC Act is aging but predictable: you pay $110 to launch, there is no annual entity-level fee for default-tax LLCs, and the corporate license fee only kicks in if you elect corporate status. The catch? The statute includes optional personal liability boxes, “at-will vs. term” quirks, and local licensing that varies block-to-block.
Why clients choose SC LLCs
- No annual SOS report or franchise fee for pass-through LLCs.
- Flat 5% corporate income tax if you elect S- or C-corp treatment—lower than neighbors.
- Fast SOS approval (often 1–2 business days online).
- Courts recognize single-member LLCs but expect tight adherence to operating agreements and formalities.
Pain points that merit counsel
- Patchwork city/county business licenses (Charleston, Greenville, Beaufort, etc.).
- Outdated Act defaults: optional member personal liability, dissociation traps, and at-will classification.
- Foreign investors still need CA/NY qualification if they do business there—SC LLC isn’t a magic bullet.
- No series LLC option; asset segregation requires multiple filings or trusts.
Pre-formation checklist
Looking for corporations? I’ll publish the dedicated South Carolina corporation hub soon—reach out if you need that playbook now.
Formation workflow & first 90 days
SS-articles seem simple, but South Carolina expects precise disclosures (manager names, optional member liability statements) and county coordination. Here’s the sequence I follow.
Articles of Organization (S.C. Code §33-44-202)
| Field | Requirements | Practice notes |
|---|---|---|
| LLC name | Must include “LLC”/“L.L.C.”/“LC”/“Limited Liability Company.” | Distinguishable on SOS records; check county tax/licensing databases for conflicts. |
| Designation | Statement that entity is formed under the SC LLC Act. | Built into SOS form—don’t remove. |
| Designated office | Street address (no PO boxes). | Useful for municipal license targeting. |
| Registered agent | Name + physical street address in SC. | Agent must consent; commercial agents often charge $120–$150/year. |
| Management | Specify member- or manager-managed; list manager names/addresses if manager-managed. | Failing to list managers confuses banks; include even if also in OA. |
| Term | Optional “at-will” or specified term. | Most clients choose at-will but I flag term options for real estate ventures. |
| Member liability | Checkbox inviting members to assume personal liability for LLC debts. | Never check unless intentionally structuring recourse obligations (rare). |
| Organizer info | Name and address of each organizer. | Lawyers often act as organizers to shield member info initially. |
First 90-day implementation
County recording? SC does not mandate county recording of LLC Articles, but certain property transactions require filing certified copies with the register of deeds. Budget for certified copies up front.
Operating agreement architecture
Because the 1996 Act retains archaic defaults—personal liability options, at-will vs term, dissociation triggers—SC LLCs absolutely need bespoke operating agreements. Template swaps from other states rarely cover the oddities.
Governance choices
| Topic | Default | Attorney focus |
|---|---|---|
| Management | Member-managed equal rights. | Manager-managed boards, major-decision vetoes, targeted board committees. |
| Term | At-will unless stated otherwise. | Specify term for real estate syndications; define continuation upon death/dissociation. |
| Member liability | Members not liable unless Articles/OA say otherwise. | Confirm OA disclaims any assumption of debts and waives the statutory checkbox. |
| Dissociation | Members can withdraw at will, triggering buyout rights per statute. | Restrict withdrawals, set purchase formulas, and require board consent. |
Economic terms
- Capital contributions: document initial and future contributions with remedial dilution if unpaid.
- Allocations and distributions: targeted capital accounts for investor deals; SC default is per contributions.
- Buy-sell menu: ROFR, drag/tag, deadlock resolution (shotgun, mediation, forced sale).
- Tax elections: embed PTET (if ever adopted), S-corp protocols, withholding for non-residents.
Professionals & foreign owners
SC lacks a formal PLLC statute, but licensing boards (medical, legal, engineering) allow LLCs if all owners are licensed. Embed board-compliance statements, insurance covenants, and expulsion triggers. Foreign owners need ITINs and face FIRPTA on SC real estate—address withholding obligations and designate a responsible member.
Single-member LLC considerations
Courts scrutinize single-member LLCs more aggressively. I include officer titles, banking resolutions, and annual statement templates so owners can prove separateness if sued.
Taxes, licensing & ongoing compliance
The state won’t send annual entity invoices, but DOR and local governments will. Build a compliance calendar around tax accounts, municipal licenses, and CTA reporting.
State tax posture
- Default pass-through: no entity-level SC income tax; owners report on Form SC1040 (Schedule NR if nonresident).
- Single-member LLCs disregarded for SC tax unless elect corporate treatment.
- Corporate option: flat 5% corporate income tax (Form SC1120/SC1120S) plus corporate license fee (0.1% of capital + $15, min $25).
- Pass-through entity tax election exists (PTE), but limited guidance—coordinate with CPA.
DOR & DEW accounts
- Sales/use tax: register before selling taxable goods/services; local option rates apply.
- Withholding tax: required if you have employees or pay nonresident members guaranteed payments.
- Business personal property: file PT-100 annually for depreciable assets.
- Unemployment insurance: register with DEW once you have payroll.
Local licensing
- Most cities (Charleston, Columbia, Greenville, Myrtle Beach) require annual business licenses based on gross receipts.
- Counties like Beaufort, Dorchester, Horry, Jasper, Orangeburg, Richland, and Sumter also require licenses.
- Some jurisdictions require separate hospitality/hospitality tax registration.
| Task | Timing | Notes |
|---|---|---|
| DOR sales/use filings | Monthly, quarterly, or annually | Due the 20th of the month after the reporting period through MyDORWAY. |
| Withholding & payroll | Per DOR/IRS schedules | File SC Withholding returns + federal 941/940; remit unemployment taxes to DEW. |
| Corporate license fee (if elected) | Due with SC1120/1120S | 0.1% of capital and paid-in surplus + $15 (min $25). |
| Business personal property (PT-100) | Annually by last day of 4th month after year-end | Applies if LLC owns depreciable assets. |
| Municipal/county licenses | Varies; often due each spring | Renew to avoid fines and enforcement visits. |
No SOS annual report for standard LLCs—but don’t confuse that with compliance-free status. DOR and cities will still levy penalties if you miss tax filings or business license renewals.
CTA, foreign registration & pitfalls
Federal BOI reporting is live, foreign LLCs must still qualify before “transacting business,” and South Carolina’s traps revolve around forgetting local requirements or misusing the optional liability checkbox.
Corporate Transparency Act
Most South Carolina LLCs are “reporting companies” under FinCEN’s CTA rule.
- Formed in 2024: 90 days to file BOI after SOS approval.
- Formed on/after Jan 1, 2025: 30 days to file.
- Entities formed before 2024: file by Jan 1, 2025 (current deadline).
- Keep ownership logs updated for amendments; penalties for late filings are steep.
Foreign LLC qualification
Out-of-state LLCs “doing business” here must file an Application for Certificate of Authority ($110 + certificate of existence).
What counts as “doing business”
- Maintaining an office, warehouse, or employees in SC.
- Owning/operating SC real estate.
- Regular in-person services in SC.
Common pitfalls I mitigate:
- Checking the Articles box that makes members personally liable—never do this without counsel.
- Ignoring municipal business licenses; Charleston and Columbia aggressively fine non-filers.
- Failing to list managers in manager-managed LLCs, leading to bank and counterparty refusals.
- Skipping BOI filings—FinCEN penalties accrue daily.
My services for South Carolina LLC owners
I personally handle South Carolina formations—no anonymous filing mill. Expect practical guidance on the Act’s quirks, municipal licensing, and tax posture from day one.
Formation essentials
- Articles of Organization drafting + SOS filing (online) with name clearance.
- Registered agent coordination + acceptance letter (client-provided or commercial service).
- Custom single-member or basic multi-member operating agreement.
- EIN assistance and compliance calendar (BOI, DOR, municipal licenses).
Growth & tax planning
- Multi-member OA with complex economics, drag/tag, and capital call mechanics.
- DOR account setup (sales, withholding) + DEW unemployment registration.
- S-corp election analysis, corporate license fee planning, and CPA coordination.
- Municipal licensing roadmap (Charleston, Greenville, Richland, etc.).
Compliance & clean-up
- CTA BOI filings, ownership ledger updates, and annual compliance reviews.
- Foreign qualification (into or out of SC) and withdrawal filings.
- Operating agreement audits, amendment packages, and municipal license renewals.
- Reinstatement help for administratively dissolved entities.
Book a South Carolina strategy call
Schedule a 30-minute Zoom or email me. I cap new matters so every file gets direct attorney attention.