South Carolina Processing Times and Fees
Like almost all states, South Carolina has standard and expedited processing times for filing your corporation. For help deciding which to use, see our list of the average wait times for both standard and expedited filings.
South Carolina charges a filing fee for corporate formation, and it costs extra to expedite your filing. Visit "compare pricing" in our incorporation center to see all South Carolina state fees.
Deciding Between a South Carolina C-Corp or S-Corp Tax Designation
In most respects, C-Corp and S-Corp are the same. They have the same structure, management, compliance documents and liability limits. When choosing between them, these are the most important differences you need to know:
Ownership Rules: C-Corps have no limits on the number of shareholders or stock classes they may have. S-Corps are limited to no more than 100 shareholders and one stock class. Only U.S. citizens or legal residents may own shares in an S-Corp.
Taxes: A C-Corp is taxed as its own entity. It pays taxes at the corporate level. Individual shareholders may also pay taxes on any dividends they receive. An S-Corp is not taxed as a separate entity. It has a "pass-through" tax structure. It distributes income to its owners, who pay taxes on their individual returns.
Documents: When you file as a corporation, your business is automatically a C-Corp. To become an S-Corp, you must file IRS Form 2553, Election by a Small Business Corporation, to elect this status.
Personnel Requirements
In South Carolina, your corporation must meet the following personnel requirements:
- Age Requirement: The state has no age requirements.
- Minimum number of directors: Corporations need one or more directors.
- Residency requirement: South Carolina does not require that directors live in the state.
You don't have to list your directors in your Articles of Incorporation, but you can if you choose to.
Other Requirements for Your Articles of Incorporation
Your Articles of Incorporation must meet a few other requirements in South Carolina:
Every corporation needs a registered agent to accept important tax, legal and government documents on its behalf. Your agent must have a physical South Carolina address and must be available during regular business hours.You must list your agent's name and physical address in your Articles.When you incorporate with us, we can help you designate your agent.
You must also include the following information in your Articles of Incorporation in South Carolina:
- Your corporate name.
- If issuing only one share class, then the total number of shares authorized to issue.
- If issuing multiple share classes, then the class designation and number of shares of each class, along with the relative right, preference and limitations of each class and series. At least one share class must have unlimited voting rights.
- The names, addresses and signatures of all incorporators.
South Carolina allows you to include additional information in your Articles if you like. These include:
- The purpose of your corporation
- The par value of stock shares
- Limits or other regulations on the powers of the corporation, its directors or shareholders
Other Required Paperwork
South Carolina requires that you file two additional documents along with your Articles of Incorporation:
A certificate stating that your Articles meet all necessary requirements of the section of the state statute regarding Articles of Incorporation. This certificate must be signed by an attorney licensed to practice in South Carolina.
Your initial annual report and license fee.
Guidelines for Your Name
Choosing the right name for your corporation is important. So is following South Carolina's requirements for a corporate name:
Include the one of the words "Corporation," "Incorporated," "Company," "Limited" or an abbreviation of one of these terms. You may also use words or abbreviations with the same meaning in another language.
Do not use a deceptive name that implies a business purpose other than those permitted by law or in your Articles. For example, don't name your business "Mobile Communications, Inc." if you've incorporated as a landscaping company.
Make sure your name is not the same as, or too similar to, a business name already registered or reserved with the South Carolina Secretary of State.
South Carolina Corporate Taxes & Reports
You already know taxes are a fact of life, and your new corporation must pay them too. The first thing you must do is apply to the IRS for an employer identification number, or EIN. This federal tax ID is similar to a Social Security number, but it's for businesses. All businesses with employees must have one.We have more information about the tax structures of both S Corps and C Corps.
Your corporation must file annual reports with the Department of Revenue. These reports are due by the fifteenth day of the third month after the end of each fiscal year. You may request an extension, but you must pay the license fee by the normal due date.
You must also send annual financial statements to your shareholders. These reports must be sent within 120 days after the end of your fiscal year. They must include an end-of-year balance sheet, income statement and statement of changes in shareholders' equity, or the equivalent information elsewhere in the statement.
Keeping Corporate Records and Ongoing Filing Requirements
In South Carolina, you must also create and maintain additional documents to preserve your corporate status. These are the two most important ones:
Bylaws: A corporation's bylaws formalize its management, structure and operating procedures. The bylaws must be consistent with your Articles of Incorporation and the law.
Meeting minutes: Every corporation must record actions and decisions that occur during directors' and shareholders' meetings. These records are called corporate meeting minutes. You must keep them for 10 years at your corporate headquarters.
Neither document must be filed with the state in South Carolina, but requirements for bylaws and corporate meeting minutes vary by state. Keep your documents with your other corporate records at your principal office.
We wish you the best of luck with your new South Carolina corporation. When you're ready to incorporate, we're here to help.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.
