South Carolina LLC Act: Formation, Duties, and Dissolution

South Carolina’s LLC Act — the Uniform Limited Liability Company Act of 1996, codified at Title 33, Chapter 44 of the South Carolina Code — is the statute that governs how limited liability companies are formed, managed, and dissolved in the state. It sets the naming rules, the required contents of the articles of organization, the default management structure, the fiduciary duties members and managers owe, the rules for transferring interests, and the events that trigger dissociation or dissolution. South Carolina does not require LLCs to file annual reports, which keeps ongoing compliance lighter than in most states.

Naming Rules

Every South Carolina LLC name must carry a designator identifying it as a limited liability company. The statute permits “Limited Liability Company,” “Limited Company,” or the abbreviations “L.L.C.,” “LLC,” “L.C.,” or “LC.” “Limited” can be shortened to “Ltd.” and “Company” to “Co.”¹

The name also has to be distinguishable from every other entity already on file with the Secretary of State, including corporations, limited partnerships, and other LLCs, whether domestic or foreign. Identical or confusingly similar names get rejected. If you’re not ready to file but want to hold a name, Sections 33-44-106 and 33-44-107 allow reservation and registration in advance.¹

Registered Agent and Designated Office

Every LLC formed or authorized to do business in South Carolina must continuously maintain a designated office in the state and an agent for service of process. The agent — an individual with a South Carolina street address or a company authorized to do business here — receives lawsuits and official notices on the LLC’s behalf. A P.O. box does not satisfy the requirement. The designated office does not have to be where the LLC actually operates; it just has to exist inside South Carolina.²

If an LLC fails to keep a registered agent, or fails to pay required fees or taxes within 60 days of the due date, the Secretary of State can begin administrative dissolution.²

What the Articles of Organization Must Include

The articles of organization bring the LLC into existence. Section 33-44-203 requires seven categories of information:³

The company name, chosen to comply with the naming rules.
The address of the initial designated office in South Carolina.
The name and street address of the initial agent for service of process.
The name and address of each organizer.
Whether the LLC exists for a specified term and, if so, the term.
Whether the LLC will be manager-managed and, if so, the name and address of each initial manager.
Whether any members will be personally liable for the LLC’s debts under Section 33-44-303(c).

That last item is unusual. South Carolina lets members voluntarily accept personal liability for company debts, but only if that election is disclosed in the articles. Leave it blank and no member takes on personal liability beyond their investment.

Filing and Fee

One or more people organize the LLC by delivering the completed articles to the Secretary of State. Unless the articles specify a delayed effective date, the LLC’s existence begins the moment the Secretary of State files the document, and that filing is conclusive proof that the legal conditions for formation were met.⁴

The filing fee is $110, paid by credit card online or by check with a mailed paper filing.⁵ If the articles are in statutory form and the fee is paid, the Secretary of State files the record and issues a receipt. A certified copy is available for an extra fee.

You can set a delayed effective date, but the statute caps the delay at 90 days. Choose a date further out and the filing takes effect on the 90th day anyway.⁶

Member-Managed or Manager-Managed

The Act offers two management structures, and the choice controls who can sign contracts, who makes decisions, and who counts as an agent of the company.

In a member-managed LLC, every member has equal rights in running the business. Each member is an agent of the company and can bind it in the ordinary course of business. Routine decisions take a majority vote of the members. Certain extraordinary actions — amending the articles, admitting new members, selling substantially all the company’s assets — require unanimous consent.⁷

In a manager-managed LLC, only the designated managers run day-to-day operations and act as company agents. Non-manager members cannot bind the company and do not participate in management decisions unless the operating agreement gives them a role. Where there are multiple managers, decisions go by majority of managers.⁷

If the articles don’t say, the LLC is member-managed by default. The statute defines a manager-managed company as one explicitly designated as such in its articles; everything else is member-managed.⁶ That default matters. In a member-managed LLC, any member who signs a contract on the company’s behalf has likely bound it.⁸

Fiduciary Duties Members and Managers Owe

Section 33-44-409 sets the fiduciary duties in detail. In a member-managed LLC, a member owes the company and the other members two duties: loyalty and care.⁶

The duty of loyalty requires a member to account to the company for any property, profit, or benefit derived from the company’s business (including taking company opportunities), to avoid dealing with the company on behalf of a party with an adverse interest, and to refrain from competing with the company before dissolution.

The duty of care is narrower than people assume. A member breaches it only through grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law. An ordinary bad business call doesn’t trigger liability. Every member also has to act consistently with the obligation of good faith and fair dealing.⁶

Manager-managed LLCs shift the picture. A member who is not also a manager owes no fiduciary duties to the company simply for being a member. Managers themselves are held to the same loyalty, care, and good faith standards that apply to members in a member-managed LLC. If a non-manager member exercises managerial authority under the operating agreement, fiduciary duties attach to the extent of that authority.⁶

The statute makes one thing explicit: a member doesn’t violate a duty just because the conduct also serves their own interest. Members are allowed to profit. They can also lend money to the LLC or transact with it on the same terms as any non-member.

Operating Agreements

The operating agreement is the internal governing document among members, managers, and the company. It can be oral, though a written version is far more defensible in court. Where the operating agreement is silent, Chapter 44’s default rules fill in.⁹

The Act gives wide latitude to customize, but some provisions can’t be waived. The operating agreement cannot eliminate the duty of loyalty (though it can shape it within limits), unreasonably reduce the duty of care, or eliminate the obligation of good faith and fair dealing (though members can set standards for measuring it as long as those standards aren’t manifestly unreasonable).⁹

A useful operating agreement addresses profit and loss allocation, voting, capital contributions, distributions, member exits, and dispute resolution. A single-member LLC can often live with the defaults. A multi-member LLC that skips the operating agreement is gambling that the statute’s defaults happen to match what the members actually intended.

Transferring a Membership Interest

A member’s distributional interest — the right to receive distributions — is personal property and can be transferred. But transferring that financial interest does not make the recipient a member. Without admission, a transferee collects distributions and nothing else: no vote, no management role, no right to inspect records.⁶

A transferee becomes a full member only if the operating agreement allows it or every remaining member consents. Once admitted, the new member takes on the transferring member’s rights and obligations, including any outstanding contribution obligations, though not liabilities the transferee didn’t know about at admission. The transferring member is not released from their own obligations to the LLC just because they transferred out.⁶

This structure protects existing members from being paired with a stranger. It’s also a reason the operating agreement should spell out transfer restrictions and buy-sell procedures before anyone needs them.

The Liability Shield and Where It Fails

Members are generally not personally responsible for the LLC’s debts or obligations just because they hold membership or manage the company. The shield is not absolute.

Courts can pierce the veil when the LLC is treated as an extension of its owners rather than a separate entity. Common risk factors include commingling personal and business funds, running the company without enough capital for foreseeable obligations, ignoring the operating agreement, failing to keep basic financial records, and using the LLC to commit fraud. The pattern is treating the company as a personal piggy bank instead of a real business.

The shield also does not cover your own conduct. If you personally injure someone through your own negligence, commit fraud, or sign a personal guarantee on a company loan, you are personally liable regardless of the LLC. The entity insulates you from the company’s obligations, not from the consequences of your own actions.

And under Section 33-44-303(c), members can affirmatively elect personal liability for the LLC’s debts in the articles of organization. It is rare, but the statute requires disclosure, and it’s worth checking when reviewing another company’s formation documents.

When a Member Dissociates

Dissociation is the Act’s term for a member separating from the LLC without the company itself dissolving. Section 33-44-601 lists the triggers:¹⁰

Voluntary withdrawal on notice to the company.
Transfer of the member’s entire distributional interest, other than as loan security.
Expulsion by an event specified in the operating agreement.
Expulsion by unanimous vote of the other members in defined circumstances, such as when continued business with the member would be unlawful.
Judicial expulsion for wrongful conduct, material breach of the operating agreement, or conduct making it impractical to continue business together.
Bankruptcy, incapacity, or death.

Dissociation doesn’t automatically end the LLC. It changes the roster, and it can trigger buyout obligations or set up a later dissolution depending on the operating agreement.

Dissolution and Winding Up

Dissolution ends the LLC’s active business and starts winding up. Under Section 33-44-801, an LLC dissolves when any of the following occurs:¹¹

An event specified in the operating agreement.
Consent of the number or percentage of members required by the operating agreement.
An event making it unlawful to continue substantially all of the business, though a cure within 90 days operates retroactively.
A judicial decree obtained by a member or dissociated member on grounds including that the company’s economic purpose is being unreasonably frustrated, another member’s conduct makes continued business impractical, or those in control are acting in an unlawful or oppressive manner.

Separately, the Secretary of State can administratively dissolve an LLC that doesn’t pay a required fee, tax, or penalty within 60 days after it comes due.⁶ Because South Carolina doesn’t require annual reports, this route usually involves unpaid taxes rather than missed filings.

Foreign LLCs Doing Business in South Carolina

An LLC formed in another state that wants to transact business in South Carolina has to obtain a certificate of authority from the Secretary of State. The application asks for the company’s name (or an alternate if the name isn’t available here), its state of formation, its principal office address, a designated office and agent inside South Carolina, and whether it’s manager-managed.¹² A certificate of existence from the home state has to accompany the application. Filing also means the foreign LLC submits to South Carolina’s tax jurisdiction and courts for purposes of determining state tax liability.

Skipping the certificate carries a specific consequence: a foreign LLC operating in South Carolina without one cannot file a lawsuit or maintain a proceeding in the state’s courts. Contracts stay valid, the company can still defend lawsuits, and members’ liability protection is not waived. The company is deemed to have appointed the Secretary of State as its agent for service of process for claims arising from South Carolina business.⁶

Federal Tax and EIN — Outside the Act

The Act governs legal structure. Federal taxation is a separate track set by the IRS. By default, a single-member LLC is a disregarded entity, and its income passes through to the owner’s return; a multi-member LLC is treated as a partnership.¹³ If neither default fits, Form 8832 elects corporate treatment and Form 2553 elects S corporation status.¹⁴

Most LLCs need a federal Employer Identification Number, free from the IRS. You need one if the LLC has more than one member, hires employees, or owes excise taxes. Wait until the Secretary of State files your articles before applying — applying earlier can stall processing.¹⁵

Beneficial Ownership Reporting

The federal Corporate Transparency Act originally required most domestic LLCs to file beneficial ownership information reports with FinCEN. In March 2025, FinCEN issued an interim final rule removing that requirement for U.S. companies and U.S. persons; only foreign entities registered to do business in a U.S. state or tribal jurisdiction remain classified as reporting companies. Domestically formed South Carolina LLCs are exempt, and FinCEN has stated it will not enforce beneficial ownership reporting penalties against U.S. citizens or domestic companies.¹⁶

1
South Carolina Legislature. South Carolina Code 33-44-105 – Name
2
South Carolina Legislature. South Carolina Code 33-44-108 – Designated Office and Agent for Service of Process
3
South Carolina Legislature. South Carolina Code 33-44-203 – Articles of Organization
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South Carolina Legislature. South Carolina Code 33-44-202 – Organization
5
South Carolina Secretary of State. Downloadable Paper Forms – Business Entities Online
6
South Carolina Legislature. South Carolina Code Title 33 Chapter 44 – Uniform Limited Liability Company Act of 1996
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South Carolina Legislature. South Carolina Code 33-44-404 – Management of Limited Liability Company
8
South Carolina Legislature. South Carolina Code 33-44-301 – Agency of Members and Managers
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South Carolina Legislature. South Carolina Code 33-44-103 – Effect of Operating Agreement; Nonwaivable Provisions
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South Carolina Legislature. South Carolina Code 33-44-601 – Events Causing Members Dissociation
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South Carolina Legislature. South Carolina Code 33-44-801 – Events Causing Dissolution and Winding Up of Company Business
12
South Carolina Legislature. South Carolina Code 33-44-1002 – Application for Certificate of Authority
13
Internal Revenue Service. Limited Liability Company (LLC)
14
Internal Revenue Service. About Form 8832, Entity Classification Election
15
Internal Revenue Service. Get an Employer Identification Number
16
FinCEN.gov. Beneficial Ownership Information Reporting