How to Incorporate in South Carolina

Not only is South Carolina a beautiful state, but it also offers many business incentives, making it very appealing for new corporations. Your corporation may be able to take advantage of these incentives, provided it meets qualifying criteria.

For example, certain Corporate Income Tax Incentives, such as the Job Tax Credit (JTC), are statutory incentives offered to companies that establish or expand corporate headquarters, manufacturing, distribution, processing, qualified service-related, research and development facilities. This credit is extremely beneficial for companies because it is a credit against corporate income taxes, which can eliminate 50 percent of a company’s liability.

For many entrepreneurs looking to start a larger business, SC incorporation may be the best choice. As a corporation, your business is able to buy and trade stock, and when it comes to excess profits, corporations offer more flexibility than a limited liability company (LLC). A corporation is allowed to pass income and losses to its shareholders, who report taxes on an individual tax return at ordinary levels.

It all depends on your goals. For smaller businesses, limited liability companies are usually a better option. An LLC is easier to set up and receives many of the same benefits as corporations, but with less regulation.

Learn more about forming a South Carolina LLC so you can decide which business entity is right for you.

It offers several advantages similar to those provided by a C Corp including, but not limited to:

In this guide, you’ll find information on naming your corporation, getting a Registered Agent, the fees you’ll need to pay, business taxes and much more. We also cover what you'll need to register your corporation and how you'll interact with the Secretary of State in South Carolina.

To help you along the way, use our Starting a Business checklist to keep track of everything you need to do to get your business up and running.

Step 1: Choose a Unique Business Name and Complete a State Business Search

Every South Carolina business must have a unique name that isn't already being used by another business in the state. If you’re having a tough time thinking of a name, try using our Business Name Generator to gather ideas. You'll also need to follow a few naming rules, which you can read about in detail on the South Carolina Corporation Names page.

Once you’ve decided on a name, you’ll need to make sure it’s available in South Carolina. To see whether another company in the state is using your desired business name, use our tool to do a South Carolina entity search.

You can also carry out a name search on the state's website.Every South Carolina business must have a unique name that isn't already being used by another business in the state. If you’re having a tough time thinking of a name, try using our Business Name Generator to gather ideas. You'll also need to follow a few naming rules, which you can read about in detail on the South Carolina Corporation Names page.

Once you’ve decided on a name, you’ll need to make sure it’s available in South Carolina. To see whether another company in the state is using your desired business name, use our tool to do a South Carolina entity search.

You can also carry out a name search on the state's website.

Step 2: Provide an Official Business Address for Your Corporation

All SC corporations must have a designated address. It could be a building where your office is located, your home address (if you’re running the company from your place of residence) or any physical address of your choice. The address can be outside the state of South Carolina and can be a P.O. Box.

You may also be able to use a virtual mailbox for your business address. Bizee can provide you with a South Carolina virtual mailbox where we'll receive your mail, scan it, and upload it for your online review. This can be especially helpful if you run a home-based business and don't want your home address published as part of your business public record.

Step 3: Assign a Registered Agent

Someone who receives official correspondence and is responsible for filing reports with the South Carolina Secretary of State is known as a Registered Agent. Every South Carolina corporation is required to have a Registered Agent.

You may fill this position yourself, assign another manager in your business or use a Registered Agent service. If your Registered Agent in South Carolina is a person, they must have a physical street address in South Carolina and must be available during business hours to receive important documents on behalf of your company. You'll appoint your Registered Agent when you file your Articles of Incorporation with the Secretary of State and formally create your corporation.

All of Bizee’s business formation packages include Registered Agent service. It’s free for the first year and just $119 per year after that. You can also access a digital dashboard to view any document we've received on your behalf.

Step 4: File Your Articles of Incorporation With the South Carolina Secretary of State (SOS)

Once you've gathered all the information for your corporation, you’ll need to file your Articles of Incorporation with the Secretary of State. This will officially create your business.

Your Articles of Incorporation may be filed online for a faster processing time. To do this, first register an account with the Secretary of State. You can also mail the form to the Office of the Secretary of State or Bizee can file it on your behalf. The SC Corporation filing fee is $135, which includes the $25 fee for the filing of your Initial Annual Report (CL-1 Form).

You only need to file your Articles of Incorporation in South Carolina once, once a year thereafter, you'll also need to file an annual report which is part of your corporate tax return (Schedule D) with the Department of Revenue in SC.

What are the fees and requirements to incorporate in South Carolina?

*includes the $25 initial annual report fee

Ongoing Requirements

Step 5: Get an Employer Identification Number (EIN) From the Internal Revenue Service

You'll need an EIN to identify your business to the IRS. You use this number for filing and paying taxes, submitting payroll information and payments for your employees and opening a business bank account. You can obtain one directly from the IRS, or Bizee can get one for you as part of the SC corporation creation process.

Step 6: Write Bylaws

A set of rules that govern how a corporation will be run, bylaws detail how many directors the corporation will have, whether the board of directors will have annual meetings and what the voting requirements will be, among other things.

Some states legally require companies to create bylaws, and the state of South Carolina is one of them. You don't need to file your bylaws with the Secretary of State, but keep them with your other business records.

It's always a good idea to write and follow bylaws to protect your business from any future changes and events.

Types of SC Corporations

C Corporation

When you file to start a corporation, by default, it's a C Corp. This is the choice for large businesses that will trade shares in the stock market.

A South Carolina C Corporation will offer you several liability protections, but it will also be required to adhere to numerous strict rules and regulations. It will also likely have a substantial amount of administrative overhead, and won't enjoy as many tax advantages as other corporation types.

Learn more about C Corporations.

S Corporation

Technically, an S Corporation isn't a business entity the way LLCs and C Corporations are. It's a tax filing status. An LLC or a C Corporation can be an S Corporation. It's just a matter of filing a form with the IRS.

The main reason to file as an S Corp is to save money on self-employment taxes. To get an idea of how much money you might save, use our S Corp Tax Calculator.

If you want your South Carolina C Corporation to be treated as a South Carolina S Corporation, file the IRS Election by a Small Business Corporation form, also known as Form 2553 or an S Corp Election form.

Consult with your tax advisor or accountant to determine whether this is your best option.

Learn more about S Corporations.

Compare S Corp vs. C Corp to learn the benefits and drawbacks of both, and decide which one will best suit your needs.

Professional Corporation

Some states, including South Carolina, allow certain occupations to form Professional Corporations. South Carolina Code of Laws Title 23, Chapter 19, § 33-19-103 defines a Professional Corporation in South Carolina as:

"...a corporation for profit, other than a foreign professional corporation, subject to the provisions of this chapter, and a "professional service" as a service that may be rendered lawfully only by a person licensed or otherwise authorized by a licensing authority in this State to render the service and that may not be lawfully rendered by a corporation under chapters 1 through 17 of this title."Some states, including South Carolina, allow certain occupations to form Professional Corporations. South Carolina Code of Laws Title 23, Chapter 19, § 33-19-103 defines a Professional Corporation in South Carolina as:

"...a corporation for profit, other than a foreign professional corporation, subject to the provisions of this chapter, and a "professional service" as a service that may be rendered lawfully only by a person licensed or otherwise authorized by a licensing authority in this State to render the service and that may not be lawfully rendered by a corporation under chapters 1 through 17 of this title."

Check with the Secretary of State to confirm whether your business should and can be a Professional Corporation.

Close Corporation

Put simply, a Close Corporation is one that has a limited number of shareholders, and isn't publicly traded.

Usually, Close Corporations are exempt from corporate requirements, such as having a board of directors and holding annual meetings. Per SC Code of Laws Title 33, Chapter 18, § 33-18-200, a South Carolina Close Corporation may be managed according to a shareholders' agreement rather than by a board of directors.

This entity is often chosen by family-owned businesses to prevent non-family members from establishing or claiming any ownership of the company.

Foreign Corporation

If your business operates in another state and you want to expand into South Carolina — or vice versa — you’ll need to form a Foreign Corporation.

Learn more about South Carolina Foreign Corporation registration.

Nonprofit Corporation

Charitable organizations can incorporate as nonprofit corporations. This means all the profits they generate are donated to the organization supported by the charity, minus administrative costs.

A nonprofit corporation is also exempt from federal and state taxes, allowing more of the profit to benefit the charity.

Note: Everything in this guide applies to for-profit corporations, and mostly to C Corps and S Corps. Items listed as requirements for forming a corporation may or may not also apply to nonprofits.

Limited Liability Company

Depending on the type of business you want to start, or your personal circumstances and goals, an LLC may be a better option. For example, you may only want to build a small business that you yourself will run with just a few employees and you may not need the options to buy and sell stock.

A South Carolina LLC is usually a better option for a smaller business. It's easier to set up, but it still offers you certain advantages you'd get from a corporation. You can even have your LLC treated as an S Corporation for tax purposes to save you money.

Regardless of which direction you decide to go, we can help you with your South Carolina business registration.

Learn more about limited liability companies.

Sole Proprietorship or Partnership

These are the simplest types of businesses to set up. That's because there's no real set up to do. If you don't choose to form a separate business entity, by default, you'll have either a sole proprietorship (just you) or a partnership (you and one or more other people).

Neither of these options provides you with any special benefits or liability protections and can leave your personal assets vulnerable. For these reasons, we don't recommend them.

Compare business entity types to decide which one is best for you.

Helpful Resources from the State of South Carolina

More Information in This Guide