To start a business in South Carolina, you choose a legal structure, file formation documents with the Secretary of State, get a federal Employer Identification Number, and register for the state and local taxes or licenses your business triggers. The core state filing fee is $110 for an LLC or $135 for a corporation (which includes the mandatory $25 CL-1 form), and online filings are usually processed within 24 to 48 hours.
Pick a Legal Structure
Your structure decides whether you file anything with the state at all, how you’re taxed, and whether your personal assets are exposed to business debts.
- A sole proprietorship is you, operating as yourself. No state formation filing. Your personal assets are on the hook for business liabilities.
- A general partnership works the same way for two or more owners. No Secretary of State filing, and every partner is personally liable.
- An LLC requires Articles of Organization filed with the Secretary of State. Members get liability protection without heavy corporate formalities.
- A corporation requires Articles of Incorporation plus an Initial Annual Report (Form CL-1). More structure, more ongoing compliance.
If you go with a sole proprietorship or general partnership, you can skip ahead to the EIN and tax registration steps. The formation steps below apply to LLCs and corporations.
Choose and Check Your Business Name
An LLC name must include “Limited Liability Company,” “Limited Company,” or an abbreviation like “LLC” or “LC.”1South Carolina Legislature. South Carolina Code 33-44-105 – Name A corporation name must include “Corporation,” “Incorporated,” “Company,” “Limited,” or an approved abbreviation like “Corp.” or “Inc.”2South Carolina Legislature. South Carolina Code 33-4-101 – Corporate Name
The name also has to be distinguishable from every other business already on file. For LLCs, that means it can’t match or come too close to any corporation, limited partnership, or LLC already registered in the state.3South Carolina Legislature. South Carolina Code of Laws Title 33 Chapter 44 – Section 33-44-105 Run your proposed name through the Secretary of State’s free business name search before you draft anything.4S.C. Secretary of State. Business Name Search
If you have the name but aren’t ready to file, you can reserve it for 120 days for $25. The reservation is non-renewable, so file your formation documents before the window closes.
South Carolina does not require you to register a “doing business as” name with the Secretary of State.5South Carolina Business One Stop. Registering with the Secretary of State If you’ll operate under a name different from your legal entity name, you can note it on your federal EIN application. And keep in mind that state name registration is not trademark protection. It only blocks another South Carolina entity from filing under the same name; nationwide protection requires a separate federal trademark registration through the U.S. Patent and Trademark Office.
File Your Formation Documents
Both LLCs and corporations have to name a registered agent and submit their formation paperwork to the Secretary of State.
Registered Agent
Every corporation must continuously maintain a registered agent in South Carolina to accept legal documents and official notices.6South Carolina Legislature. South Carolina Code of Laws Title 33 Chapter 5 – Section 33-5-101 LLCs have the same requirement. The agent can be an individual who lives in South Carolina or another business entity authorized to operate here, and the agent’s address must be a physical street address in the state. A P.O. box won’t work. You can serve as your own registered agent as long as someone is available at that address during business hours to accept service of process.
LLC: Articles of Organization
The Articles of Organization ask for your LLC’s name, the registered agent’s name and street address, and the name and address of each organizer (the person filing the paperwork).7South Carolina Secretary of State. FAQs About Business Entities You can file through the Secretary of State’s online portal or download a paper form. The filing fee is $110.
Corporation: Articles of Incorporation and Form CL-1
Corporations file everything an LLC files, plus details about their stock structure. The Articles of Incorporation must state the classes of shares the corporation is authorized to issue and the number of shares in each class.8South Carolina Legislature. South Carolina Code of Laws Title 33 Chapter 6 – Section 33-6-101 For a simple small business this is often a single class of common stock, but think ahead about how many shares you might want to issue to founders, investors, or employees.
Corporations must also include the South Carolina Department of Revenue’s Form CL-1, the “Initial Annual Report of Corporations.”7South Carolina Secretary of State. FAQs About Business Entities The CL-1 collects your federal EIN, the date you started doing business in the state, your tax year-end month, officer and director information, and share details.9South Carolina Department of Revenue. CL-1 Initial Annual Report of Corporations It carries a $25 license fee on top of the $110 filing fee, bringing the corporate total to $135. If you submit Articles of Incorporation without the CL-1, the entire filing is rejected.
Online vs. Paper, and Turnaround
The Secretary of State’s Business Entities Online portal lets you upload forms, enter entity data, and pay by credit card or electronic check in one session.10SC Secretary of State. File and Search Online Online submissions are generally processed within 24 to 48 hours, and the portal flags common errors before you finalize.11South Carolina Secretary of State. Downloadable Paper Forms – Business Entities Online Paper filings mailed to Columbia with a check or money order take about five to seven business days once they arrive. Make the payment amount exact; underpayment delays processing. Once your filing is accepted, the state issues a certified copy or official acknowledgment that proves your entity exists.
Get a Federal EIN
An Employer Identification Number is your business’s federal tax ID. You’ll need it to open a business bank account, file federal taxes, and hire employees. The IRS issues EINs for free through its online application, and the number comes back immediately.12Internal Revenue Service. Get an Employer Identification Number
Timing matters here. The IRS expects your entity to already be formed at the state level before you apply, and applying before the Secretary of State has processed your Articles can delay things.12Internal Revenue Service. Get an Employer Identification Number Wait for your filing confirmation, then apply. The online tool has limited hours, and you can only get one EIN per responsible party per day.
For LLCs, the IRS defaults to treating a single-member LLC as a disregarded entity (taxed like a sole proprietorship) and a multi-member LLC as a partnership. If you’d rather have the LLC taxed as a corporation, file IRS Form 8832.13Internal Revenue Service. About Form 8832, Entity Classification Election That election is federal only and doesn’t change your state-level LLC structure, but an LLC electing corporate tax treatment must also file the CL-1 with the South Carolina Department of Revenue.14South Carolina Department of Revenue. Corporate FAQs
Register for State Taxes
The Department of Revenue’s MyDORWAY portal is where you set up state tax accounts. What you need depends on what the business does.
- Retail license. If you sell tangible goods, including internet sales, you need a South Carolina Retail License before your first sale. The fee is a one-time, non-refundable $50.15South Carolina Department of Revenue. Licensing (Retail License)
- Employer withholding. If you’ll hire employees, register for state income tax withholding through the same portal so you can remit payroll taxes.
These registrations are separate from your Secretary of State filing. Your entity can exist on paper, but you’re not authorized to collect sales tax or run payroll until you’ve registered with the Department of Revenue.
Get Any Local or Industry Licenses
South Carolina does not have a statewide general business license.16South Carolina Business One Stop. Local Business License Licenses are issued by the city or county where you operate. If you’re inside city limits, you generally get a license from the city. If you’re in an unincorporated area, you deal with the county. Each jurisdiction sets its own fee schedule and renewal cycle, so the cost varies based on where you are and what you do. Contact the local license office early; some municipalities won’t let you open until the license is in hand, and operating without one can lead to fines or a forced shutdown.
Certain fields also require a professional or occupational license from a state board. Construction, healthcare, real estate, accounting, cosmetology, and food service are common examples. Check with the relevant South Carolina licensing board before you start taking clients.
If You’ll Have Employees
Hiring triggers two registrations beyond basic withholding.
Workers’ Compensation Insurance
South Carolina requires businesses that regularly employ four or more workers to carry workers’ compensation insurance. Part-time employees and family members count toward that threshold.17SC Workers’ Compensation Commission. Employer FAQs Businesses with fewer than four employees or an annual payroll under $3,000 are generally exempt, along with agricultural workers and certain other categories. Even when you’re technically exempt, carrying coverage protects you from personal liability if someone is hurt on the job.
Unemployment Insurance
Employers who pay wages in South Carolina must register for an unemployment insurance account with the South Carolina Department of Employment and Workforce.18SCDEW. Employer Page After registering, you’ll get an Employer Account Number and can file quarterly wage reports through the SCDEW online system. Register as soon as you know you’ll be hiring, not on your first employee’s start date.
Keep the Entity in Good Standing
Formation is a one-time event, but your corporation (and any LLC that elected corporate tax treatment) owes an annual report and license fee to the South Carolina Department of Revenue every year. The license fee is 0.1% of capital stock and paid-in surplus, plus $15, with a minimum of $25 even if the corporation is dormant. The annual report is filed as Schedule D with the corporate tax return. For calendar-year C corporations the deadline is April 15; for S corporations it’s March 15.14South Carolina Department of Revenue. Corporate FAQs LLCs taxed under the default pass-through rules don’t owe this filing, but they still need to keep their registered agent information current with the Secretary of State.