South Carolina LLC laws are set out in the Uniform Limited Liability Company Act of 1996, codified at Title 33, Chapter 44 of the South Carolina Code. The Act treats an LLC as a legal entity separate from its owners, so members are generally not personally liable for the company’s debts. The Secretary of State handles formation and other entity filings; the Department of Revenue handles tax matters.
Naming Your LLC
The name has to include one of the required designators: “limited liability company,” “limited company,” or an abbreviation such as “LLC,” “L.L.C.,” “LC,” or “L.C.” You can shorten “Limited” to “Ltd.” and “Company” to “Co.” It also has to be distinguishable on the Secretary of State’s records from every other corporation, limited partnership, or LLC already on file or reserved.1South Carolina Legislature. South Carolina Code 33-44-105 – Name The Secretary of State’s online portal lets you check availability before you file.2SC Secretary of State. Business Entities
Not ready to file yet? You can reserve a name for a nonrenewable 120-day period for $25. The reservation cannot be renewed after it expires, but you can transfer it to someone else by filing a signed notice.3South Carolina Legislature. South Carolina Code 33-44-106 – Reserved Name
Forming the LLC
An LLC in South Carolina exists the moment the Secretary of State files its Articles of Organization.4South Carolina Legislature. South Carolina Code 33-44-202 – Organization One or more people can organize the company, and there is no minimum member count. The filing fee is $110.5South Carolina Secretary of State. Downloadable Paper Forms – Business Entities Online
Section 33-44-203 lists what the Articles must contain:6South Carolina Legislature. South Carolina Code 33-44-203 – Articles of Organization
- The company name, meeting the requirements of Section 33-44-105.
- The address of the initial designated office in South Carolina (it need not be the principal place of business).
- The name and street address of the agent for service of process.
- The name and address of each organizer.
- Whether the company will exist for a fixed term, and if so, how long.
- Whether the company will be manager-managed, and if so, the name and address of each initial manager. Leave this blank and the LLC defaults to member-managed.
- Whether any members will be personally liable for company debts under Section 33-44-303(c).
That last item catches people. Members have no personal liability by default, but South Carolina allows a member to opt in: it takes both a provision in the Articles saying so and the member’s written consent.7South Carolina Legislature. South Carolina Code 33-44-303 – Liability of Members and Managers The election is unusual and rarely chosen, but the form still asks the question.
You can file online through the Business Entities Online portal or by mail using paper Form F0006. Online filings move faster, though the Secretary of State does not publish guaranteed turnaround times.
The Operating Agreement
The operating agreement governs the internal workings of the company: relationships among members, managers, and the LLC itself. South Carolina does not require it to be written, but a written agreement is the only reliable way to prove what everyone agreed to when a dispute lands. Where the agreement is silent, the Act’s default rules take over.
Members can customize most terms, but the statute draws several hard lines. The operating agreement cannot:8South Carolina Legislature. South Carolina Code 33-44 – Uniform Limited Liability Company Act of 1996
- Eliminate the duty of loyalty, although it can identify specific activities that will not violate it or set up a process for members to approve conflicted transactions.
- Unreasonably reduce the duty of care.
- Eliminate the obligation of good faith and fair dealing, though it can define reasonable standards for measuring performance.
- Unreasonably restrict a member’s access to company records.
- Override the right to seek judicial expulsion of a member for serious wrongdoing.
- Change the mandatory wind-up triggers set out in the Act.
Duties of Members and Managers
In a member-managed LLC, members owe two fiduciary duties: loyalty and care. In a manager-managed LLC, the managers owe those duties; passive members generally do not.
The duty of loyalty has three parts. A member must account to the company for any profit or property obtained through company business, must not deal with the company as someone with an adverse interest, and must not compete with the company before dissolution. The duty of care sets a floor: avoid grossly negligent or reckless conduct, intentional misconduct, and knowing violations of law. Ordinary business mistakes below that line are not breaches.
An overarching obligation of good faith and fair dealing applies to both duties. A member can pursue self-interest without breaching any duty, but doing so in a way that is fundamentally unfair to other members crosses the line. Members can lend to or do business with the company, and those transactions are judged by the same standards that would apply to an outside party.
Federal and State Tax Treatment
The IRS has no separate LLC tax category. A single-member LLC is treated by default as a disregarded entity, with the owner reporting income and expenses on Schedule C of Form 1040. A multi-member LLC defaults to partnership treatment, filing Form 1065 and issuing a Schedule K-1 to each member.9Internal Revenue Service. Single Member Limited Liability Companies
An LLC that prefers corporate taxation can file Form 8832 for C corporation treatment or Form 2553 for S corporation status.10Internal Revenue Service. About Form 8832, Entity Classification Election Under the default pass-through treatment, members pay self-employment tax at 15.3% on net earnings (12.4% Social Security plus 2.9% Medicare), with an additional 0.9% Medicare surtax on earnings above $200,000 for single filers or $250,000 for joint filers.11Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes)
An LLC that elects corporate taxation must file the Initial Annual Report of Corporations (Form CL-1) with the South Carolina Department of Revenue within 60 days of commencing business. The minimum fee is $25.12South Carolina Department of Revenue. Initial Annual Report of Corporations LLCs on the default pass-through classification do not file CL-1.
Staying in Good Standing
South Carolina does not require a general annual report from LLCs taxed as sole proprietorships or partnerships. LLCs taxed as corporations have ongoing annual filings with the Department of Revenue after the initial CL-1.
Every LLC has to continuously maintain a designated office and an agent for service of process within the state, with the agent’s street address on file with the Secretary of State.13South Carolina Legislature. South Carolina Code 33-44-108 – Designated Office and Agent for Service of Process Letting either slip is one of the more common compliance failures and can lead to administrative dissolution.
Administrative Dissolution and Reinstatement
The Secretary of State can move to dissolve an LLC administratively if the company fails to pay any required fee, tax, or penalty within 60 days of the due date. Before dissolving, the state must notify the company and allow 60 days to fix the problem or show the grounds do not exist. If nothing happens, a certificate of dissolution is signed and takes effect immediately.
An administratively dissolved LLC can still wind up its affairs and notify creditors, and its agent for service of process remains authorized, but it can no longer operate as a going concern. You have two years to apply for reinstatement. The application must show that the grounds have been eliminated, confirm the name still meets statutory requirements, and include a certificate from the Department of Revenue that all taxes have been paid.14South Carolina Legislature. South Carolina Code 33-44-811 – Reinstatement Following Administrative Dissolution Approved reinstatement relates back to the dissolution date, so the company is treated as though it was never dissolved. Miss the two-year window and you have to form a new LLC.
When a Member Leaves
A member can leave voluntarily by giving notice of intent to withdraw. Dissociation takes effect when the company receives the notice, or on a later date the member specifies.15South Carolina Legislature. South Carolina Code 33-44-601 – Events Causing Members Dissociation
Other triggers include transferring all of the member’s distributional interest, expulsion under the operating agreement, or a unanimous vote of the other members to expel for specified reasons such as unlawful conduct or transferring substantially all interest. A court can order expulsion if a member engaged in wrongful conduct that materially harmed the company, persistently breached the operating agreement, or made it impractical to continue in business together. For individuals, death and the appointment of a guardian trigger dissociation. For entity members, filing for dissolution or having a charter revoked can lead to expulsion if not cured within 90 days. Bankruptcy is an automatic trigger regardless of entity type.
Voluntary Dissolution and Winding Up
When members decide to close the business, the LLC has to go through a formal winding-up process before it ceases to exist. Any member who has not wrongfully dissociated may participate. A court can supervise winding up if a member, a legal representative, or a transferee shows good cause.
The person handling wind-up can preserve the business as a going concern for a reasonable time, settle lawsuits, close out business relationships, dispose of property, and discharge debts. Assets go out in a set order: creditors first (including any members who are also creditors), then remaining assets to members based on their positive capital account balances.
Once winding up is complete, file Articles of Termination with the Secretary of State to finalize dissolution. The filing fee is $10. Resolve all state tax obligations with the Department of Revenue before filing. Skipping this step leaves a defunct company on the state’s records, which can complicate later filings using the same or a similar name.
Federal Beneficial Ownership Reporting
Under an interim final rule FinCEN published on March 26, 2025, all entities created in the United States are exempt from beneficial ownership information reporting under the Corporate Transparency Act. The rule narrowed “reporting company” to entities formed under foreign law that have registered to do business in a U.S. state.16FinCEN.gov. Beneficial Ownership Information Reporting A South Carolina LLC formed domestically does not currently need to file a BOI report. This could change if FinCEN issues a new final rule, so check FinCEN’s BOI page before assuming the exemption still applies.