More and more entrepreneurs are being encouraged to begin a new business venture. Whether you are a business startup, or you have an established company and you need more protection, this page will explain about the LLC Setup in South Carolina.
The most important decision when forming any company is to decide on your business entity. If there is more than one founder, in most cases, the best route is to form a Limited Liability Company for many reasons.
An LLC offers you protection, and allows you to separate your own personal assets from the business. Also, this type of entity enjoys several options as tax status with the IRS, including partnership or S election.
As part of your LLC formation documents, the application is not that complicated, but it is very important, so to make sure your registration is correct you would be wise to use a business attorney.
The related services we provide are listed below, and when you are ready to move forward, just give us a call, we will be glad to help.
You will need to pay the State of South Carolina certain fees during LLC formation. You can reserve a name for 120 days by filing an Application to Reserve a Limited Liability Company Name with the South Carolina Secretary of State Corporations Division. The reservation has to be filed by post and the fee is $25.
Choose a Name
Your LLC must have a name that is different from other business names registered with the South Carolina Secretary of State, and should be checked against the business name database. The name must contain the words ‘Limited Liability Company’, or various other abbreviations.
All new LLCs in the United States must obtain an IRS Employer Identification Number (EIN) from the Internal Revenue Service. The 9-digit number is required for tax purposes, to open a bank account, and other important functions.
To apply for an LLC in South Carolina you have to submit and file with the Secretary of State.
The articles of organization must include:
- The name of your Limited Liability Company
- The registered agent’s name and address
- The LLC’s initial office address
- If there is to be a manager to run the business, their name and address must be provided
- The name and address of one of the organizer’s
- Signatures of all organizers
Filing the articles of organization registers the business with the state.
Now it is time to submit the Articles of Incorporation to register the company with the state, and for this you will need a registered agent.
For service of process in the state of South Carolina every LLC must have an agent. This is a person or a business that will accept papers on behalf of the Limited Liability Company if it is being sued. The registered agent must have a physical street address in South Carolina.
These are some of the services Henderson & Henderson can provide to help your LLC setup go smoothly:
Partnership and Operating Agreements
These are essential for setting up your Limited Liability Company the way you want it to be run, and will show the company as serious and legitimate. It will include day-to-day operations and contributions from its members. Although this is not ‘required’, an LLC operating agreement is excellent for setting up ground rules, plus it will be used in the event of any dispute between partners, and will help to avoid possible future legal costs.
This is a way to invest in a business that is not yet ready for valuation, calling it a short-term debt, which is converted into equity, rather than repaid in capital and interest.
Identifying talent to fill leadership and business-critical positions in the future has huge advantages. It will ensure that businesses continue to run smoothly and without interruption, after important people retire, or pass away. It can also provide an exit strategy, which enables the transfer of ownership.
This is an incentive program that gives an employee lump sum benefits of stock options. Thus an employer can reward employees who stay longer with the company and can remove the options if they terminate their contracts early.
Guidance on Manager-Managed LLC
This can be a complicated area where managers are appointed to run the company, and you need to be clear on the owner and manager responsibilities.
Single Member LLCs
If you form a one-member LLC, you do not need to obtain an IRS Employer Identification Number. An EIN is only required when your Limited Liability Company has more than one member, you take on an employee, or you want it taxed as a corporation and not a sole proprietor.
Real Estate LLCs
This structure can help a real estate business looking for tax breaks, a multi-member venture for people owning investment property together, or a single first-time property owner to protect their personal assets if legal issues should arise with their real estate. This kind of structure can make owning real estate holdings far less stressful.
Contract Drafting and Review
It is always better to have an understanding lawyer by your side when contracts are concerned. Their job is to point out the things you just wouldn’t think of, as well as give you peace of mind.
These contracts between an employer and an employee are usually signed at the start of a business relationship. It prohibits the employee from competing with the business directly or indirectly for a specific period of time after their employment has ended.
Often called an NDA, it is a legally binding contract establishing a confidential relationship that, when signed, agrees that sensitive information they may obtain will not be made available to any others.
In the form of an entire document or a just clause in an employment contract, it restricts an individual (typically a former employee) from approaching employees or customers after their departure from a business.
Again, a very important legal document which needs careful handling.
We’ve been there
We understand the excitement and enthusiasm of starting a business (we’ve been there).
South Carolina LLC formation is one of the pivotal steps to start formalizing your business dream. We also understand the stress involved.
When starting a Limited Liability Company, it’s important to understand whether you need it to be member or manager-managed. If there are multiple members of the LLC, then careful consideration should be given to various scenarios that will play out in the future.