Forming Limited Liability Companies (“LLCs”) in South Carolina

LLC FORMATIONS AND OTHER BUSINESS COUNSEL

When starting a business, you must choose whether you want to incorporate, form a Limited Liability Company (LLC) or form another type of unincorporated business structure, like a limited partnership. There are many benefits of forming an LLC vs corporation, but there can still be challenges you face during the LLC formation. Our business lawyers at Harvey and Battey can advise small businesses whether an LLC is the best choice for your business, how to proceed with LLC formation in South Carolina, and more.

FORMING AN LLC IN SOUTH CAROLINA

Although an LLC is the simplest business structure, and does not require you to file an annual report in SC, there are still many steps required to form an LLC in South Carolina.

• Name Your LLC

There are two rules to consider when naming your LLC. Your name must be distinguishable from other businesses within South Carolina, and your business name must contain “Limited Liability Company,” “LLC,” “Limited Company,” or “LC.”

• Appoint a Registered Agent

Once you’ve decided what to name your LLC, your next step is to appoint a registered agent to handle legal documents. Your registered agent must be a South Carolina resident or business. 

• File Articles of Organization

LLC formation in South Carolina requires filing Articles of Organization, which much include:

– The LLC’s name and designation

– Main LLC address

– Name and address of registered agent

– If the LLC is member-managed or manager-managed

– Effective date of the Articles of Organization

– Term end date of LLC if applicable

– Names, addresses, and signatures of LLC organizers

• Draft an Operating Agreement

Though an operating agreement is not legally required for an LLC formation in South Carolina, it is something we recommend to everyone forming an LLC. Your operating agreement should describe the business structure, name responsibilities and obligations of LLC members, and provide details on how the LLC will run.

• Obtain an Employer Identification Number (EIN)

If you are not a single-member LLC, you must obtain an EIN from the IRS. This is necessary to open business bank accounts, file tax returns, pay income tax, and more. 

• Register with South Carolina’s Department of Revenue

Certain LLCs are required to register with the South Carolina Department of Revenue. An experienced business lawyer can advise you on if your LLC is required to register with the state’s Department of Revenue.

• File Your Beneficial Owners’ Information (BOI)

As of 2024, most business entities must submit a BOI report to FinCEN. Businesses formed in 2024 have 90 days to file their BOI, and those formed in 2025 and beyond have 30 days from formation to file.

WHAT IS THE DIFFERENCE BETWEEN A CORPORATION AND AN LLC?

When comparing an LLC vs a corporation, it’s important to remember that one is not “better” than the other, but there are differences to consider. Incorporated businesses are inherently more complex but retain higher market “legitimacy,” can split corporate income, and are able to issue stock to entice investors and employees. LLCs must report profit and loss on the owners’ individual tax returns and are not able to issue stock.

An LLC is less complicated regarding taxes and provides more flexibility, but if you’re planning for your business to grow quickly and possibly go public, a corporation may be the best route. Your lawyer can help you better understand how these differences could affect your business, advise whether an LLC vs corporation is the best choice for your business, and help you with the process of forming an LLC or a corporation.

OUR BUSINESS LAW TEAM AT HARVEY AND BATTEY

The experienced team of business lawyers at Harvey and Battey include William B. Harvey, III, Thomas A. Holloway, J. Samuel Scoville, Eugene Parrs, Kevin Dukes, and Austin Blake. Our team has over 100 years experience helping businesses with LLC formation in South Carolina. Schedule your free consultation with one of our trusted attorneys to discuss LLC pros and cons for your business.

COMMON QUESTIONS RELATED TO LIMITED LIABILITY COMPANIES IN SOUTH CAROLINA