If you’re an entrepreneur or small business owner in South Carolina, forming a limited liability company (LLC) is usually a great idea. LLCs have a lot to offer business owners and managers. Not only will you get personal liability protection by separating your business and personal assets, but you’ll also enjoy greater ownership and management flexibility and can opt to have the same tax benefits as most other business entities.
Unfortunately, forming an LLC is easier said than done, and the fees and legal documents associated with LLCs can be enough to scare people away from making an excellent business decision.
That’s where we come in.
In this post, we’ll walk you through all the main LLC fees South Carolinian businesses should know about and what documents you need to file to get and remain in good standing. We’ll discuss
Business Name Reservation Fees
There are more than 430,000 small businesses operating in South Carolina. That’s awesome! However, that means that there are more than 430,000 small businesses potentially already using the business name you want. Start by looking up your name on the Secretary of State’s business entities online page to make sure it’s available.
If it isn’t, that’s okay too. While your official LLC name is required to be on all legal and financial documents, you can use your “Doing Business As” (DBA) name for marketing purposes. A DBA name is a fictitious name you use in everyday conversation when building and promoting brand recognition. If you want a DBA name, filing for one will cost $10.
If your desired name is available for use, double-check to make sure you include “Limited Liability Company,” “LLC,” “L.L.C.,” “LC,” or “L.C.” somewhere in your organization’s name. Also, make sure you’re not using the following:
If your name meets these qualifications, you can reserve it for $25. Reserving your business name gives you exclusive rights to use it for a nonrenewable 120 days. This should be enough time to get the rest of your paperwork in order.
In addition, whether you’re using your official LLC name or your DBA name for marketing purposes, run it through the Trademark Electronic Search System (TESS) database. The TESS database searches for businesses that already have business name trademarks. For example, you can’t market yourself as “Microsoft,” “Starbucks,” or “Nike” because these companies already are. If you do, you’re committing trademark infringement and may receive an order to cease and desist.Registered Agent Fees
Before filing your paperwork, you must select a registered agent. A registered agent is a person or business entity that receives the legal and financial documents on behalf of your LLC. They must have a physical address in the state of South Carolina and not just a P.O. Box.
If you want to be your own registered agent, you can do so for free. However, you should know that your LLC's registered agent's physical address and contact information becomes public knowledge once your business is officially an LLC.
Often, business owners opt to hire a commercial registered agent service instead (that or because they don’t have a physical address in the state).
If you want to work with a commercial registered agent service, sites like South Carolina Registered Agent will work on your behalf. You should expect to pay $49 or more per year.How To Form An LLC In South Carolina
With your business name and a registered agent selected, you’re ready to form your LLC! To do this, you need to file your articles of incorporation.
Your articles of incorporation list all of the important information regarding your LLC that the government and vendors need to know. While it’s an incredibly important document, it’s easy to fill out and shouldn’t take too much of your time. Here’s what you’re required to know:
Your articles of incorporation cost $110 to file and must be made payable to the Secretary of State.
LLC Fees In South Carolina For Operating Agreements
South Carolina does not require you to submit an operating agreement along with your articles of incorporation. However, we strongly recommend creating one or having an attorney draft one for you. Once it is, you should then have all of your members sign it.
Your operating agreement is like your organization’s constitution. It defines your LLC’s rules, regulations, and liabilities.
Having an operating agreement can only benefit your business, whether you’re a single-member LLC or a multi-member LLC with dozens of partners and employees. You can use your operating agreement as a reference point whenever you need to make an important business-related decision. It’s also there to settle most legal and financial disputes. Without one, business-related decisions may be left up to the courts to rule on, and their decisions may not be in the best interest of the LLC, its members, or you.
The key elements of your operating agreement should include:
Operating agreements are free to create, but for peace of mind, it’s worth hiring an attorney to draft one for you.
South Carolina Business Licenses Required
South Carolina does not have a statewide business license. Instead, each city, county, and town administers its own business permits and licenses. Typically, the licenses you’re required to have are both industry and location-specific. As such, the cost and renewal periods for these licenses will vary. To figure out what you need, visit the SC business license page.
For most permits and licenses, you’ll need to provide the following:
Sales And Use Tax Permit Fees
If your industry requires you to collect and pay sales taxes, you need to register for a sales and use tax permit. This permit costs $50, and it does not expire. You can file for one on South Carolina’s Department of Revenue page.
South Carolina LLC Annual Fees
Congratulations! You’ve now completed all of the primary paperwork required of South Carolina LLCs to get up and running.
And once you’re up and running, remaining in good standing with your local, state, and federal government is pretty straightforward.
Here’s some more good news: Unless your LLC is taxed as an S corp, you don’t have to file an annual report! South Carolina is one of the few states where this isn’t required. This is a huge benefit, especially since some states have costly fees. For instance, Delaware LLC fees are $300 annually, Massachusetts LLC fees are $500, and Tennessee LLC fees are $300 plus an additional $50 for each partner or owner up to $3,000!
If you’re not an S Corp, skip ahead.
Your annual report comprehensively explains your company’s activities during the preceding year. Its intent is to give shareholders of and other interested parties information regarding the ongoings and financial performance of your LLC. It also requires you to keep all of your information up to date so that vendors, creditors, and government officials can find you.
According to the Department of Revenue, the cost to file an LLC for an S Corp is “.1% of capital and paid-in-surplus, plus $15.”
Total Cost To South Carolina LLCs
Here’s the complete list of South Carolina’s LLCs and how often they’re due:
Fee Type | Cost | HOW OFTEN |
|---|---|---|
Business name reservation | $25 | One time |
DBA name designation | $10 year you file | One time |
Registered agent fees | $0, or $49+/yr if with a commercial registered agent service | Annually |
Articles of organization filing fee | $110 | One time |
Operating agreement costs | $0 | One time |
Business license fee | Varies | Varies |
Sales tax registration fees | $50 application fee | One-time |
Annual fees | $0, unless you’re an S Corp | Annually |
Additional FAQs: How To Form LLC In South Carolina
Do you still have more questions about South Carolina’s LLC fees or about LLCs in general?
The answer is almost always yes. For instance, if you’re a rental property owner, operating as an LLC will give you some much-needed personal liability protection. If for whatever reason, your business gets sued, your personal assets, like your house and car, will not be at risk.
It doesn’t matter if your LLC includes one person or one hundred. The costs will be identical to the requirements to get your LLC license.
A Certificate of Good Standing (also known as a Certificate of Existence or Authority) is proof that your business entity has filed and paid all of the necessary reports and fees with South Carolina’s Secretary of State. With this certificate, you are free to conduct business in South Carolina. It’s also usually required when opening a business bank account or trying to get a loan. A physical copy of this certification costs $10.
Conclusion: How South Carolina LLC Fees Work
Are you ready to form your South Carolina LLC and reap the many benefits that come with it? By identifying and understanding how much it will cost to start and maintain your LLC, you’re on your way to running a successful organization!
To increase that success, check out The Lazy Man’s Guide to Living The Good Life, and discover how to enhance your chances of running a thriving business!