How to Form an LLC in South Carolina | 2025

If you’re considering starting a business in South Carolina, forming a Limited Liability Company (LLC) is a great option due to its low formation costs, straightforward compliance requirements, and favorable tax benefits.

This guide walks you through every step of forming your LLC in South Carolina to help you get started. We'll also discuss Wise Business, the international business account that supports all the needs of going global.

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How to Start an LLC in South Carolina (Step-by-Step)

Step 1: Select a Business Name for Your South Carolina LLC

You can be as creative as you want when choosing a name for your business, as long as you follow the legal requirements. The name will also be the foundation of your branding. It must include “Limited Liability Company” or an abbreviation like “LLC,” “L.L.C.,” or “Ltd. Co.” It must also be distinguishable from any existing business entity registered with the South Carolina Secretary of State.

Use the online business name search to verify availability. If you're not quite ready to file, you can reserve the name for up to 120 days by filing a reservation form and paying a $25 fee.

Avoid using restricted or regulated terms such as “Bank,” “Engineering,” or “Insurance” unless you meet specific licensing or registration conditions.

Step 2: Designate a Registered Agent

Every South Carolina LLC must have a registered agent, i.e., a person or company responsible for receiving legal and tax correspondence. This agent must maintain a physical street address in South Carolina and be available during standard business hours. You can serve as your own agent or hire a professional registered agent service, typically costing between $100 and $150 per year.

Step 3: File the Articles of Organization

Your Articles of Organization officially create your business entity with the state. You can file online through the South Carolina Secretary of State's Business Filings portal or submit a paper form via mail.

Key details to include:

• LLC name
• Principal office address
• Registered agent name and address
• Member-managed or manager-managed structure
• Names and addresses of managers (if applicable)

The filing fee is $110. Processing time is usually 24–48 hours for online filings or 5–7 business days for mailed forms. After approval, you’ll receive a Certificate of Organization, confirming your LLC’s legal existence.

Step 4: Create an Operating Agreement

An operating agreement isn’t legally required in South Carolina, but it’s strongly recommended. This internal document outlines:

• Ownership percentages
• Profit/loss distribution
• Voting rights
• Management duties
• Procedures for adding/removing members
• Dissolution terms

An operating agreement strengthens liability protection and minimizes disputes by clearly defining expectations.

Step 5: Obtain an EIN from the Internal Revenue Service

Your Employer Identification Number (EIN) is required to open a business bank account, file taxes, and hire employees. Think of it as your business’s Social Security number. You can apply for free on the IRS website.¹ If you're a foreign national without a Social Security number, you must file Form SS-4 by mail or fax.

What Are the Business Requirements for a South Carolina LLC?

Once your LLC is formed, you must remain compliant with state and federal requirements:

• Register with the South Carolina Department of Revenue if collecting sales tax or hiring employees
• Maintain a business bank account that is separate from personal accounts
• File personal income tax filings on LLC income (pass-through taxation)
• Apply for industry-specific licenses or permits if required
• Notify the state of any changes to the registered agent, address, or ownership

Unlike many other states, South Carolina does not require an annual report for most LLCs unless taxed as a corporation.

What Are the Benefits of Starting an LLC in South Carolina?

South Carolina stands out as one of the most business-friendly states for forming a limited liability company, particularly for entrepreneurs who value simplicity, cost-efficiency, and legal protection. Here’s why forming an LLC in South Carolina is a smart strategic move:

• No Annual Report Requirement for Most LLCs: Unlike many states that require annual filings and fees, South Carolina exempts standard LLCs from filing annual reports. This reduces administrative overhead and saves both time and money over the life of your business.
• Competitive Tax Climate: South Carolina features a progressive personal income tax rate ranging from 0% to 6.5%, with no franchise tax imposed on LLCs. This makes it an attractive option for pass-through entities that want to minimize their state tax burden.
• Robust Legal Protections: As with LLCs formed in other states, South Carolina LLCs provide a strong legal shield that separates your personal assets from your business liabilities, protecting your home, car, and savings in case of lawsuits or debt.
• **Low Formation Costs:**At just $110, the state’s filing fee for Articles of Organization is among the most affordable in the country. With no hidden state compliance fees for default LLCs, entrepreneurs can launch with confidence and minimal startup costs.
• Supportive Business Ecosystem: South Carolina offers robust support for small businesses through resources like the South Carolina Department of Commerce, local Small Business Development Centers (SBDCs), and various grant and mentorship programs.

How Much Does It Cost to Start an LLC in South Carolina?

Expense	Amount
Articles of Organization	$110 (one-time)
Name Reservation (optional)	$25
Registered Agent (optional)	$100–$150/year
EIN (IRS)	Free
Operating Agreement (DIY)	Free–$500
Business Licenses	Varies

There are no annual report fees unless your LLC elects corporate taxation.

Can I Open an LLC in South Carolina Without Living There?

Yes, you can open an LLC in South Carolina even if you don’t live in the state. South Carolina does not impose any residency requirement for LLC formation, making it an accessible option for out-of-state entrepreneurs and remote business owners.

Your LLC must still designate a registered agent who maintains a physical street address within South Carolina and is available during standard business hours to receive legal and tax documents. You’ll also be required to comply with any applicable tax laws for income generated within the state.

Can a Nonresident Open a Company in South Carolina?

Absolutely. Non-U.S. citizens can form a South Carolina LLC as long as:

• A registered agent is appointed.
• An EIN is obtained from the IRS (via Form SS-4).
• U.S. banking and compliance steps are followed.

South Carolina imposes no citizenship or residency restrictions on LLC ownership.

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How South Carolina LLCs Compare to Other States

When deciding where to form your limited liability company, evaluating how South Carolina stacks up against other popular LLC jurisdictions is wise. Below is a comprehensive comparison highlighting critical factors like formation fees, tax treatment, and annual requirements.

Feature	South Carolina LLC	Delaware LLC	Florida LLC	New Jersey LLC
Formation Fee	$110	$90	$125	$125
Annual Report Required?	Not for default LLCs	Yes – $300 franchise tax	Yes – $138.75 fee	Yes – $75
Franchise Tax	No	Yes – flat $300/year	No	Yes – $125 minimum
State Income Tax	0%–6.5% (personal income)	None on LLCs (members taxed)	None	Up to 10.75%
Privacy Protection	Moderate (via agent services)	High (member names not listed)	Low	Low
Court System	General jurisdiction	Chancery Court (business court)	General jurisdiction	General jurisdiction
Compliance Simplicity	High – no annual filings (default)	Moderate – dual filings needed	Moderate – some complexity	Low–high reporting & tax
Ideal For	Local/solo businesses	Large/corporate or VC-backed	Tax-conscious entrepreneurs	Businesses needing NE proximity

• South Carolina LLCs offer a strong balance of low costs, light compliance, and tax flexibility.
• Delaware is ideal for startups seeking investors or complex structures, but comes with higher recurring costs.
• Although it has stricter annual requirements, Florida appeals to those wanting no state income tax.
• New Jersey LLCs are suitable for businesses operating in the Northeast corridor, but have higher taxes and red tape.

FAQs About South Carolina LLCs

Privacy Protections for South Carolina LLCs

While South Carolina doesn’t offer the anonymity of states like Wyoming, you can maintain privacy by hiring a professional registered agent and keeping your home address off public records. South Carolina does not publish member or manager names unless included voluntarily in filings.

Why Do People Use South Carolina for LLCs?

Entrepreneurs choose South Carolina for:

• Low start-up and maintenance costs.
• No annual report requirement for most LLCs.
• Competitive tax climate.
• Strong infrastructure and access to East Coast markets.

Is a South Carolina LLC Tax-Free?

No. While South Carolina LLCs avoid corporate franchise taxes, income is still taxed at the individual member level through personal income tax filings. LLCs can elect S-Corp or C-Corp status, which may trigger different obligations.

What Are the Disadvantages of a South Carolina LLC?

Some of the disadvantages of having an LLC in South Carolina include:

• No built-in privacy protections like in Wyoming.
• No zero-income tax like in Florida or Texas.
• It may still require local licenses or permits.
• Bank account setup may be more complicated for foreign owners.

Conclusion

South Carolina provides a streamlined process for creating a legally recognized limited liability company without excessive red tape or recurring fees. With no annual reporting requirement for default LLCs, competitive tax rates, and robust legal protections, the state is particularly attractive for solo entrepreneurs and small teams looking to minimize overhead while maximizing operational freedom.

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Sources:

1. IRS Website