For those living in South Carolina looking for information on how to set up a limited liability company, more commonly referred to as an LLC, there are some guidelines to follow. The answer to the question, “How do I set up an LLC in SC?” includes several steps that the experienced team at Mack & Mack Attorneys can help you with.
First, it’s important to understand what an LLC is to make sure it fits your needs for business. An LLC is a great option for a business formation because it offers liability protection for the personal assets of the business owner(s), most commonly referred to as “members.”
This means if there are legal issues or financial problems, as a separate legal entity disassociated with the members’ personal assets, members won’t be subject to bankruptcy or debt collectors associated with the LLC company. In addition to this protection, an LLC offers flexibility in terms of ownership structure, taxation, and managerial terms.
You can get started establishing your LLC by following the steps below.
You may already have a name you do business under, but you must ensure the name you choose for your official LLC meets South Carolina requirements. Furthermore, your name must be unique and pass a search of all other businesses to ensure no other business is already established in the name of your LLC. You can confirm the potential name for your LLC by running a business entity search with the South Carolina Secretary of State.
To ensure your business name doesn’t infringe on any name trademarks, talk to a South Carolina business formation attorney about your concerns. Below are the basic requirements for naming a South Carolina LLC.
Anyone establishing an LLC should appoint a registered agent to serve as the legally designated contact for the business. This individual or service receives important legal notices on behalf of the business. A registered agent must meet certain criteria that include being a South Carolina resident and providing their contact information, including their mailing address and physical address on public records with the state.
A registered agent must also hold regular business hours and be available to sign for anything they receive on the business’s behalf. They take the responsibility of making sure members receive all important notices and other documentation pertaining to the legalities of their LLC.
This is an important document that you must file with the SC Secretary of State. The Articles of Organization establish your LLC and include information about the company, including its location, purpose, and management hierarchy. This form should be properly filled out with the help of an attorney if there is any question about its content.
If the nature of your business requires you to obtain occupational permits or licenses to legally conduct business, make sure you meet these requirements before opening your business to the public. This step does not apply to everyone.
LLCs are subject to tax obligations. You must register your LLC with both state and federal tax services. To do this, you must obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) and contact the South Carolina Department of Revenue to remit sales tax or other applicable taxes. An attorney can also inform you so you can be clear on the tax obligations of your LLC.
It is not required in South Carolina for an LLC to file an operating agreement, but it is highly advisable to do so. By outlining the terms of business, including management structure, internal operations, and the financial arrangements of your company at the onset of establishing your LLC, you can preempt questions and related issues that arise later regarding the decision-making process and the rights and responsibilities of members.
Planning ahead can help set the standards for your company going forward, but while not mandatory, there are still laws that dictate what an operating agreement can and cannot include. Therefore, it is recommended that these types of documents be carefully written with the help of an experienced South Carolina LLC attorney.
A: The time it takes to get an LLC approved in South Carolina depends on the way the paperwork is filed with the SC Secretary of State. Filing online has a turnaround time of about 24 hours. Alternatively, filing by mail can take up to three business days once received, depending on workload volume, which can extend this time.
A: An LLC in South Carolina pays state taxes at a graduated income tax rate. The rate ranges from 0% to 7% and depends on the entity’s taxable income. Single-member LLCs have more flexibility when it comes to filing state tax returns, but this is different from the self-employment tax, which is paid at a much higher rate.
A: SC does not require an LLC to have a traditional state business license, but some businesses may need an occupational license depending on the type of business it is or the services it offers. Furthermore, there is no state business license in SC. Business licenses are issued through local municipalities.
A: The LLC itself is not required to pay taxes, but the income generated from an LLC passes through to the members, who are then responsible for paying taxes on that income. This is referred to as pass-through income tax.
If you have questions regarding LLC business entities in South Carolina, Mack & Mack Attorneys are available to talk with you about your LLC business venture. Contact Mack & Mack Attorneys to schedule a consultation and to learn how hiring our firm can be good for business.