Why Start an SC Corporation?
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.
Is an LLC Better Than a Corporation?
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.
Benefits of Forming a South Carolina C Corporation
Benefits of Forming a South Carolina S Corporation
It offers several advantages similar to those provided by a C Corp including, but not limited to:
- Options for creating, transferring and selling stock, though not as many as a C Corp
- The capacity for up to 100 shareholders
- Simpler rules than those that apply to C Corporations
- Easy transfer of ownership simply by selling your stock
- The possibility of saving money by allowing you to pay less self-employment tax
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.
How to Form an SC Corporation Yourself in 6 Steps
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.
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. Incfile 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.
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 Incfile’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.
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.
Here’s what is typically included:
- Your business name
- Registered Agent's name and address
- The corporation’s capital structure (number of shares to be issued)
- The name, address and signature of each incorporator
- Statement of certification from an SC Licensed Attorney
- The filer's name, address and signature
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 Incfile 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).
File by Mail
Secretary of State
1205 Pendleton Street, Suite 525
Columbia, SC 29201
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?
Domestic and foreign corporations, as well as professional corporations file SC 1120 Corporation Tax Return. The form has a corporate annual report included on page three. Deliver this form by mail to SC Department of Revenue with the Federal return attached.
Tax Returns which include a corporate annual report must be submitted on or before the 15th day of the fourth month after the close of the taxable year.
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 Incfile can get one for you as part of the SC corporation creation process.
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
SC Code of Laws Title 40 specifies several of the professions permitted to form a Professional Corporation in South Carolina, which include, but may not be limited to:
- Landscape Architects
- Social Workers
Check with the Secretary of State to confirm whether your business should and can be a Professional Corporation.