Think about your LLC a year from now: raking in profits and taking South Carolina by storm. You have big plans, but before your business can officially take off, you’ll need to make a bit of an investment.
And we’re not talking about renting office space or paying employees – before you sell a single product, there are startup costs associated with launching an LLC in South Carolina.
While you’re making plans and dreaming big, make sure that you consider all the possible costs associated with starting an LLC. To help you out, we’ve compiled the most common South Carolina startup fees here.
Quick Note: If you’d like to keep your costs of starting an LLC as simple and low as possible, consider hiring ZenBusiness – a reliable business formation service. To get a better idea of the value they offer and how it works, we compared them to the two most well known services:
Bare Minimum Cost to Start an LLC in South Carolina
- Optional: LLC Name Reservation Fee
- $25 for a hard copy submission
- Required: Articles of Organization Fee
- $110 for online or hard copy submissions
Overall South Carolina LLC Formation Costs
LLC Name Reservation Fee
Here’s the deal: you don’t need to reserve a business name. It isn’t a required step in the LLC formation process. That said, it’s incredibly helpful if you have a great name in mind but aren’t ready to start your business. An application, plus the $25 fee, will get you 120 days of exclusive rights to your name. You can skip this step, though, if you’re ready to start your LLC because filing the Articles of Organization will automatically register your name.
Articles of Organization Fee
This is the big one, the most important (and most expensive) form that you’ll file to start your South Carolina LLC. It will set you back $110, but because your LLC technically doesn’t exist until you file the Articles of Organization, it’s $110 well spent. Once you’ve submitted this form online or by mail to the Secretary of State, you won’t have to file it or pay the fee again.
Business and Professional Licenses
Even after you have filed your Articles of Organization, your LLC might need to obtain licenses before doing business in South Carolina. Certain business types must apply for licenses with state agencies, and certain cities and/or counties have their own licensure requirements.
For example, Real Estate Appraisers must acquire a license from the South Carolina Real Estate Appraisers Board, and CPAs from the Board of Accountancy. Costs vary depending on the agency and business type. Check with the South Carolina Department of Labor, Licensing and Regulation and your local government to see which ones your LLC might need.
LLC Formation Service
Starting an LLC can be a complicated and time-consuming process. If you want to spend less time on paperwork and more time planning your business, you might opt for an LLC formation service. These services take care of the registration process for you, so you don’t have to spend the time on research, paperwork, and filings.
Most of these services (like ZenBusiness and Northwest) offer basic LLC formation service like Articles of Organization filing, tax consultations, and phone/email support for a flat rate, with options to pay more for premium packages with premium services like Employer Identification Numbers, Operating Agreements, and expedited filing.
Registered Agent Service
Appointing a registered agent is an important part of your LLC formation process. Your registered agent is responsible for handling sensitive legal and tax documents and keeping your business compliant with South Carolina business law. In short, you need an agent you can trust.
While you can be the registered agent for your own LLC, this puts pressure on you to keep up with business filings and potential legal disputes. Sometimes it’s better to hand off that responsibility to a professional. A registered agent service ensures that your annual reports and other forms are filed efficiently and on-time, saving you from the penalties of delinquent filings and the stress of having to do it yourself.
Not all registered agent services are equal, so you’ll need to be careful in choosing one. Fortunately, we’ve done some research for you, and we recommend Northwest Registered Agent. In addition to registered agent services, Northwest also handles LLC formation — and they’ll include a registered agent free for one year when you form your business with them. We think they’re the most reliable choice, but if you’d like to evaluate all your options, check out our Best Registered Agent Services guide.
If you have questions or concerns about the LLC formation process or if it’s the best business structure for you, sometimes it’s best not to take chances and consult an attorney. They’re not cheap, but they can provide essential business advice, professional filing assistance, and peace of mind.
Some attorneys offer free consultations (usually 30-60 minutes) but will charge by the hour after that. On average, business attorneys charge between $150-350 per hour. Some will offer a flat rate for setting up an LLC, which can range from $500-2000.
Cost variations depend on the experience and location of the lawyer. When you start your search, you might be intimidated by the sheer number of qualified lawyers out there. How can you be sure that you’re choosing the right one? Using a site like Avvo can help. On Avvo, you can search, compare, and evaluate an entire database of South Carolina business attorneys so you can be confident that you’re getting a good fit.
Foreign Qualification Fee
This only applies if your LLC was formed in another state and is now expanding into South Carolina. If this is your LLC, don’t file the Articles of Organization. Foreign LLCs must file the “Application for a Certificate of Authority” instead.
All foreign business entities are required to foreign qualify in South Carolina, or they could incur some pretty severe penalties. You can foreign qualify online or using a paper form, but either method will cost $110, just like the Articles of Organization. As long as the Secretary of State accepts your application, you won’t need to submit this filing or payment again for the life of your business.
LLC Annual Fees
Many states require their businesses to complete annual or biennial reports to keep their records current, but South Carolina is not one of them. This means you won’t need to worry about meeting a deadline and paying a fee each year. Since you won’t be updating the Secretary of State using an annual report, you should make sure to notify them of registered agent or office changes or amendments to your formation documents; otherwise, you’ll run into fines and penalties.
By default, LLCs are classified as “pass-through” entities by the federal and state governments, which means that they aren’t required to file separate corporate tax returns. Instead, individual LLC owners and/or members report income and losses on their personal returns. Plus, South Carolina doesn’t impose a “franchise” or “privilege” tax on its businesses.
But you’re not off the hook just yet. There are certain circumstances that will require your LLC to pay particular, business-related taxes. Does your LLC sell merchandise? If so, it will owe a Sales/Use Tax. Does it have employees? It will need to pay a Withholding Tax and an Unemployment Insurance Tax. Register for the Sales and Withholding taxes here, and the Unemployment Insurance Tax here.
If you’ve set up your LLC to be taxed as a corporation, it will need to file an income tax return and pay the flat 5% corporate income tax.
What If I Don’t Pay?
Looking at all these fees, you might be thinking: how can I pay less? While you might be tempted to look for loopholes or find a way around them, this could cause you bigger problems in the future.
Skipping the Articles of Organization or Application for Certificate of Authority will disallow you from doing business in the state. Fail to keep the Secretary of State updated on registered agent, registered office, or other business changes and your LLC will lose its good standing with the state. Without good standing, you cannot foreign qualify in most other states, apply for business loans, renew some professional licenses, and more. Or, your LLC can be administratively dissolved, which means it will not be able to do business any longer.
If you miss a tax payment, 0.5% of the tax due will be added to the amount for each month it is overdue (up to 25%). Learn more on the Department of Revenue website.
Planning Your Expenses
By now, your budget spreadsheet might be looking a little crowded, but have no fear! Most of these are one-time fees that you won’t have to worry about again. Plus, with all these on the books, there won’t be any surprise costs when you register an LLC in South Carolina.
Soon, you’ll have these fees behind you and you’ll be forging ahead, growing your business and earning profits. As you do, make sure to keep up with maintenance fees like registered agent changes so your business doesn’t fall out of good standing.