South Carolina LLC Formation
South Carolina is an attractive state for LLC due to its low cost of doing business. For limited liability companies, there is no general or state-wide business license requirement. Similarly, there is no annual filing fee, and there are no LLC annual reports to file.
This article will help new businesses register their LLC firms in South Carolina. Here is what you will learn:
- How to form an LLC in South Carolina?
- What does it cost to register a Limited Liability Company in South Carolina?
- How long will it take to register the business and start business operations?
- Who can be a registered agent of a business?
- How to get an EIN, Employer Identification Number?
- Do you need to write LLC Operating Agreement?
- How to open a business account in South Carolina?
How to form an LLC in South Carolina?
To register a limited liability company in the state of South Carolina you will need to file Article of Organization with the state authorities. The Article of Organization can either be filed online or you can send the documents to the Secretary of State by registered mail. The filing fee for online registration is $125. Once filed, you will get a confirmation from the authorities along with the certificate of organization. You can display South Carolina LLC formation at your place of business.
Filing Article of Organization is a straight-forward process, which is also simple to understand. However, you may need the help of a professional company if your company has more than one partner or members. In such cases, a professional company can help you fill the form according to the legal status and the operational setup of the company. Irrespective of the fact if you are the only owner or you have multiple partners, a professional agent charges a nominal fee to process the document for you.
If you want to do it yourself, here is a step-by-step guide to filling the form, Article of Organization:
How to name the Company?
In the first step, you will be required to fill the company name. Under South Carolina law, every limited liability entity must include “Limited Liability Company” in its official name. Most business just put LLC at the end of the name to meet the requirement.
While naming your company, you should also ensure that the name is not similar to any government entity such as the FBI and State Department. Similarly, you cannot use the title reserved for banks and universities.
Before naming the company, you should check if the name is available. You can do it easily be checking name availability using the South Carolina LLC lookup online tool at https://businessfilings.sc.gov/BusinessFiling/Entity/Search.
If the name is available for registration, you may register it. Under certain circumstances, the name will not be available to register if it is already taken by another entity.
If there is another company with a similar name in another state, it has nothing to do with your legal status. Since that organization is registered in another state, it will have no impact on your name because you are filing for registration in a separate state. In a nutshell, it means that there can be two or more companies with a similar name if each company is registered in a separate state.
If you want to extend your business and open a branch of your business in other states, it is highly recommended to think about a unique name for South Carolina LLC search. Your unique company name will ensure that there are no other companies in the United States with the same name. A unique name is ideal to stay away from legal and brand identity issues as your company expands its operations.
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Initial Designated Office
The initial designated office is the physical address of your company. Forming an LLC in South Carolina requires a physical address as you cannot give a P.O. Box address. If you have a physical storefront or a retail space in South Carolina, you just need to give that address because the physical space will act as your headquarters and primary address of doing business.
Still, there are thousands of companies that do not have a physical presence in South Carolina. Most of these companies are foreign entities or online companies that do not require a physical space to operate their business. Irrespective of the type of operation, everyone needs to give a physical address to the state authorities.
One way to do it is to give a physical address of your relative or someone you know who can collect legal documents for you. This method will work but it is risky as you need to depend on others to inform you whenever an important document arrives. Instead of giving the physical address of your acquaintance, it is recommended to partner with a registered agent service so you may use their physical address. In the next section, we will explain the concept of a registered agent.
Agent for Services of Process
In this field, business owners must name an agent for services of process. An agent of services of process or a registered agent is a professional company that offers business-related services including the service of delivering a physical address. These registered agents are themselves registered with the state authorities enabling them to offer such business services.
If you don’t have a physical address in South Carolina, you can ask a professional company offering “registered agent” services to provide you a physical address for a very nominal monthly or yearly fee. Mostly, registered agents will give you the same address as their own. These address may come with their own unique office number giving your business a professional feel.
It is also common for these professional companies to give a different address for an additional fee. If you have selected a professional company to represent you, you will name the “registered agent” as the agent for services of process.
Without a doubt, the registered agent plays a critical role in the business affairs of companies that don’t have an office in South Carolina. For instance, your agent of services will get all your legal documents from the state authorities. Once they get these documents, they manage it and send appropriate documents to respective individuals.
These registered agents and professional companies also provide additional services such as offering business agent service that will handle important business calls for you. In addition, they will also offer a physical space for you at their location in case you want to invite someone to a meeting. In fact, a professional company offers virtually endless possibilities to help businesses grow.
This field is self-explanatory as you just need to type in the address of your registered agent in this field. If you own physical space, you will put the address of your office or retail space. Similarly, many companies designate a manager or a general manager to control their business interest. If so, you will write the address of the manager who is in charge of all your business needs.
South Carolina LLC Organizer
Your LLC Organizer is the person who signs and submits the Article of Organization on your behalf. Any person over 18 years old can be LLC Organizer. If you are working with a registered agent, your agent or the professional company can be your LLC Organizer because they will prepare business registration documents for you.
Anyone in your team including your business partner, member of a company or someone outside the company can be LLC Organizer. It’s mandatory to name your LLC Organizer but you don’t need to worry too much about it at this stage because it’s more of a formality rather than a legal requirement.
Duration of South Carolina LLC
You cannot logically tell the duration of your business; therefore, most individuals skip this part as it does not have any effect on your business filing. This field is mostly used by franchise and businesses that are working on a contract.
If you’re under a contract with someone to return the rights to use the name of the parent organization and other business particulars, you may fill this field.
If you really don’t want to leave a blank, you can just put “indefinite” in this field to let the state know that you intend to continue your business indefinitely. Don’t stress yourself in dealing with this issue because there are more important things that you need to work on.
This field requires you to list the management that oversees the business. If you have partners or you have an entire team to handle your business affairs, you should put the address, the name, and the title of each stakeholder.
Sometimes, businesses name a manager or a general manager to manage their business. If someone is in charge of your business, you should put the name of the manager. On the other hand, if you are the sole owner of the business, you can put your name as you are the manager of the company.
Most business will skip this section; however, if you want someone to be liable for a certain task then you can put their names and duties in this section. Member liability is often a very important section because it can prove handy if there is any dispute in the future. Before filling the field, talk to your members about their roles and liabilities.
You may also want to list the duties and liabilities of each member to prove to the team that everyone should take their responsibilities very seriously. In the future, this document can prevent lawsuits and complains because every member will understand that they are required to fulfill their duties. By filing this field, you adopt a professional approach to running a business.
If you think you may want to fill this field, a professional company can guide you appropriately so you don’t miss anything. Otherwise, you may skip this field because it will not affect your application for registering your business.
Effective Date of LLC South Carolina
This is the date that you will start your business. If you want to start your business as soon as you register it, you may leave this blank. Most LLC will leave it blank because they see no purpose of providing an effective date. In certain circumstance, you may want to fill in the date if there is a specific timeline that you want to follow.
If the next tax period is arriving, it may persuade you to start a business on a certain date. The effective date is up to 90 days in the future, which means you can only put an effective date 90 days after registration. Certain businesses such as franchise, businesses on contract, and foreign entities may also be interested in filling this field.
What does it cost to register a Limited Liability Company in South Carolina?
If you want to submit Article of Organization through a registered mail, it will cost $110. In addition, you must include a cheque for the registration fee. If you’re doing it online, then you have to pay a higher fee of $125 but can pay using a credit card. This information is readily available at the official website of the state of South Carolina.
A lot of businesses use a professional company to file their Article of Organization because these companies often provide a very quick service and charge a nominal fee. Their fee usually includes the cost of registration and the cost of getting a unique physical address.
For just a little more cash, you get someone to do all the paperwork for you saving you a lot of time. They can also answer your important questions and guide you on the right path.
A professional agent can also be your partner in success as they offer a lot of other business-related services at an extra charge. If you are an online business or you don’t have a physical setup in South Carolina, the service fee will usually include business registration and a registered agent fee. Therefore, it’s logical to evaluate your options before starting the paperwork.
How long will it take to register the business and start business operations?
Under normal circumstances, it usually takes 1 to 2 business days to get a registration number if you file the application, online. If you’re mailing the application to Secretary of State, it may take a week or two to get all the paperwork. Similarly, if you’ve hired a professional company to do the job for you, they can do it within 48 hours.
Despite the simplicity of the filing form, you need to ensure that you have written everything correctly. When it comes to matters of company formation, a small mistake or typo can hurt your credentials; therefore, it is logical to double-check everything you have written on the form. If you’re not sure about the legal framework or you want everything to be as accurate as possible, consult a lawyer or your professional agent.
Can I be my own registered agent?
Anyone who is over 18 years old and who has a physical address can become a registered agent. Anyone who has a physical space in the state of South Carolina can give their address as a registered agent. Similarly, you can also give the address of your residence as the address of an agent.
Interestingly, a lot of business owners in South Carolina still prefer to designate a professional company as their registered agent. The trend suits company owners who don’t want to be bombarded with spam and bogus marketing calls. When you file the Article of Organization, certain information in it such as your email address and telephone are accessible by marketing companies.
Many marketing companies use the information to market their products. They also distribute this to other advertising outlets for a price. As a result, it is common for the registered agent to get a lot of junk email, general mail, and phone calls on their official or personal numbers. To avoid this, businesses designate a professional company to handle their legal paperwork. These companies forward legal paperwork and other important calls to the member of a company.
Overall, the process is streamlined by hiring a professional outfit to sort your junk mails and important emails. If it is not confidential, they will usually scan it for you and load it to the online panel where you can access such mail. These services usually cost less than a hundred dollars each month, which is great value for almost any size of business.
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How to get EIN, Employer Identification Number?
If you have an employee, you can easily get an EIN by filing a simple online form. All you need to do is to provide your address, company registration number, and a couple of other information. After submitting the form, you will instantly get an EIN that you can use for business-related affairs. Visit llcformations.com for additional info.
If you are the sole owner of an LLC, it is also prudent to get the EIN because you need EIN for a variety of tasks related to business transactions. For instance, your bank will need an EIN if you want to open a business account. Likewise, certain federal excise tax requires that businesses have EIN.
A lot of time your trade partners and other business require EIN to initiate a business because it helps the other business save tax when doing business with you. Overall, you shouldn’t say no to EIN because it’s available so easily.
Do I need to write the LLC Operating Agreement?
Operating Agreement is not required to register a company; however, many organizations prefer to craft an operating agreement to streamline operations. An operating agreement defines the duties, roles, and responsibilities of partners and members of an LLC. It also defines the number of shares and profit distribution among members.
It is also common for companies to include the liabilities of each member.
Creating an operating agreement represents a professional attitude to do business. In case of a lawsuit or company dissolution, courts will likely take guidance from operating agreement because it highlights the role of every member.
If you’re the sole owner of the company, you can also create an operating agreement highlighting our own role and duties. In the future, it will help you provide guidance if you hire workers or contractors. As described in the following section, your bank may also need an LLC operating agreement to open a bank account.
How to open a bank account?
In order to open a bank account, most banks will require three documents from you. These are:
- Article of Organization
- EIN, Employer Identification Number
- The LLC Operating Agreement
If you have all these ready, you shouldn’t have any problems opening a business bank account. A lot of times, your bank agent may not know the requirements of opening a business account. It can happen because bank agents are mostly trained to open a personal account. Whenever opening a bank account, you should call your bank ahead of time and try to get an appointment with them.
Calling ahead will make sure that your bank representative knows that you are coming for a bank account. This will also ensure that the bank representative is prepared to answer your question, and they are able to open such accounts as quickly as possible.
Hopefully, this guide has answered all of your basic questions about registering a limited liability company in South Carolina. As you can see, It’s very easy to register a company in South Carolina and start running their business in a matter of days. If you want to streamline the registration process, you may also hire a professional agent to do the job for you at a nominal cost. The next guide is our South Dakota LLC guide.