First of all, you might ask – why should you particularly choose to form an LLC for your new business?
Well, the answer is quite simple. LLCs are the most popular legal corporation forms in USA.

And it’s not accidental. LLCs in fact combine the best traits of sole proprietor and corporations.

One of the best points of LLCs is that they will separate your personal (as the owner) and company’s assets. Meaning, if your business gets into trouble (debts, lawsuits and etc.) – your personal and family assets will be fully protected. Learn about how to start an llc in 2021.

If you’d like to find out more about pros & cons of forming an LLCs and get some guidance – we recommend visiting LLCGuys.com – they have some extensive guides regarding all sorts of stuff related to LLCs and business in general.

Now let’s dive deeper on how you can start an LLC in South Carolina.

5 Steps to Form Your South Carolina LLC

Step no. 1: Choose your LLC name

This is the obvious, quite simple, yet important step. You must choose an LLC name that will comply with SC state laws and requirements.

To start with your company must have a word “LLC” included. In addition, it may not have words like “attorney” or other professional service without having necessary paperwork and licenses.

Lastly, it should be unique and distinctive.

Step no. 2: Select your LLC’s registered agent

This step is rather simple. For those of you who don’t know what Registered Agent is – it’s an entity that will receive all your LLC’s legal mail, correspondence and etc.

Actually, you can be your own registered agent yourself. Alternative, any other person (like your relative or friend) or even another company.

Step no 3: Get your Articles of Organization ready

An important step here. Filing the Articles of Organization with the South Carolina’s Secretary of State is what actually forms your LLC. 

There are several things that need to be included in these articles:

  • Name and Address of Your Registered Agent.
  • Name of the LLC: The name of your LLC needs to be distinguishable from other LLCs as we mentioned earlier.
  • Organizer: The names and addresses of each member must be listed.
  • Management Type: You will list whether your LLC will be member-managed or manager-managed.

Step no. 4: Getting an Operating Agreement Ready for Your LLC

This is pretty much an optional step. Since South Carolina doesn’t require LLCs to have Operating Agreements. But nonetheless, it is highly recommended to have one.

And if you ask why – it will basically determine the rules by which your LLC will be controlled and managed and so on. This is especially important if you’re not the sole-owner of that LLC.
Simply because it will help you avoid any unnecessary conflicts and arguments among the company members.

If you however, choose not to write your own Operating Agreement – you will automatically use SC State’s default document and rules.

There are several things that needs to be written in the agreement:

  • General Information: You’ll put the name and primary address of your business along with any DBA (Doing Business As) names your business is using.
  • Names and Addresses: You should list the names and addresses of all of the members of your LLC.
  • Ownership Percentage: The percentage of the LLC that each member owns should also be listed. 
  • Management: You’ll want to include how your LLC will be managed. Your LLC can be member-managed or manager-managed. Most LLCs are member-managed.
  • Profit Distribution: All of an LLC’s profits need to be allocated to its members each year for tax purposes. 
  • Member Responsibilities: Members can have very different responsibilities. Some members may be in the LLC simply as an investment and not want to be involved in the running of the LLC. 
  • Tax Status:  By default, a one-member LLC will be taxed as a sole proprietorship, and a multi-member LLC will be taxed as a partnership. Or, if you choose, your LLC can be taxed as an S – Corp or a C – Corp if you file the proper forms with the IRS.
  • Voting: In a multi-member LLC, there will probably be times when not everyone will agree on a decision. 
  • Member Admission or Withdrawal: There may come a time when you want to admit a new member or a member wants to withdraw.

Step no. 5: Getting an EIN for your SC LLC

Last but not least, Employer Identification Number (EIN) – you can think of it as an SSN for your business. It will be needed sooner or later for various purposes. 

To get it, you’ll need to file a SS-4 form with the IRS.

Last Word

As you can see – the path of forming an LLC in South Carolina isn’t that complicated. Although, it may take you some time and failed attempts if you’ve never formed an LLC yourself in the past. 

Fortunately, you can always get some quality information and even professional help in various business, llc-related websites mentioned earlier.

Good luck!