South Carolina boasts the country’s sixth-best ranking for ease of doing business and ranks as the eighth lowest in cost of labor. With many fast-developing areas and one of the lowest tax burdens, the Palmetto State provides a superb platform for those who want to start a new business there.
How to Start a Business in South Carolina:
1. Determine your business structure.
Choosing the right legal structure for your company is important. Your choice will have an impact on taxes, paperwork, personal liability, and your ability to raise funds.
You can choose from the following legal structures:
A sole proprietorship is the simplest structure and usually involves one individual who is solely responsible for the enterprise, while a partnership is suitable for businesses with two or more owners, and a corporation is a standalone entity with shareholders. Many small business owners in South Carolina opt to start out by creating an LLC. LLC's are easy to incorporate and they allow owners to shift any business liability from themselves to the corporation. They also create a corporate tax structure so that individuals do not have to bear the tax burden.
Businesses are regulated by South Carolina state laws and must be registered through the South Carolina Secretary of State website.
2. Write a business plan.
Your business plan is the foundation of your new business and will serve as an invaluable guide for how to structure, run and grow your company. The business plan must meet your needs and can fall into one of two common categories: traditional or lean startup.
The traditional plan is very detailed, takes more time to write, and is quite comprehensive, while the lean startup plan is streamlined and quickly written.
A strong business plan can help you get funding and makes opening a new business easier. You can consult with the South Carolina Business One Stop, a free service that offers business planning and consulting for small business owners in South Carolina.
3. Sign up for business banking.
Your business and personal finances must be kept separate to maintain accurate records. With a business bank account, you can easily obtain statements and access products that would not be available to you as an individual.
Best Banks for Small Business in South Carolina:
4. Seek funding.
Opening a new business often requires capital. If you are unable to fund your new business, you will need to take out a loan. There are three common ways to fund your business: commercial loans, business lines of credit and small business loans.
A popular organization that can assist you with small business loans in South Carolina is the SC Capital Access Program that is managed by the South Carolina Department of Commerce.
5. Decide on a business name.
Make a list of names that you like and perform a Google search to find any conflicts with other South Carolina business names.
Once this is done, you will need to do a trademark search to ensure that the business name that you chose has not already been trademarked. You can perform the trademark search at the U.S. Patent and Trademark Office and the Trademark Electronic Search System. These databases have a comprehensive list of business names that are registered together with their classification.
After you have confirmed that your business name is not trademarked, you need to check the South Carolina Department of State website to ensure that your business name is not the same or similar to another corporation registered in South Carolina.
If you are satisfied that your business name is available, you can then register it on the U.S. Patent and Trademark Office website. You can check out our guide on How to Name a Business to assist you with naming your business.
Once you have found a suitable name, make sure to register the matching web domain and social media handles, should you wish to market your business online.
6. Request an Employer Identification Number (EIN).
Every business needs to have an Employer Identification Number (EIN). Registering for an EIN is very easy—all you need to do is go to the IRS website. You can complete the application online, and save your EIN confirmation notice once you receive a number from the IRS.
7. Acquire business licenses and permits.
The state of South Carolina does not require businesses to have a statewide business license. You may, however, require a specific business license depending on the type of business that you start. You can consult with the South Carolina Department of Labor, Licensing and Regulation website to check on specific business licenses and permits that you may require.
8. Hire employees.
To start hiring you will need to register at South Carolina New Hire Reporting. Each employee will need to be registered within 20 days of starting work. All employers are also required to verify the legal status of all new employees through E-Verify.
The South Carolina Civil Rights Law protects employees against discrimination on the basis of age, race, creed, color, sex, sexual orientation, gender identity, national origin, religion, or disability.
The South Carolina Right to Work Law prohibits employers from requiring employees to belong to a trade union.
With reference to the pre-employment screening process in South Carolina, an employer is entitled to view a job applicant’s criminal history and obtain the relevant records from the criminal justice system.
Important Posters at South Carolina Business Premises:
- Occupational Safety and Health.
- Payment of Wages.
- Child Labor Law.
- Workers' Right to Know.
- Workers’ Compensation Law.
- Employee Polygraph Protection.
9. Check your business employer requirements.
Business employer requirements are specific to the type of business that you are starting and include various labor, safety and tax obligations that need to be met. You should consider hiring a tax or business attorney to ensure your business is fully compliant with the laws in South Carolina.
If you are starting a business in South Carolina, you will need to take note of the following important items:
South Carolina’s law requires all employers to provide workers’ compensation coverage to their employees. You can obtain more information at the South Carolina Workers’ Compensation Commission website.
Health insurance isn’t a requirement for small businesses in South Carolina.
In South Carolina, your small business is required to establish an unemployment insurance tax account with the South Carolina Department of Employment and Workforce. If your business is required to contribute towards unemployment insurance, you will need to file quarterly reports.
South Carolina Business Tax
Every business selling taxable tangible personal property in the state of South Carolina is required to pay sales and use tax. Services rendered are not taxable. You will need to register for a sales tax permit with the South Carolina Department of Revenue.
All business owners in South Carolina are required to contribute towards a Business Personal Property Tax that is a tax imposed on furniture, fixtures, and equipment owned and used to operate a business. The tax is assessed at 10.5% and is due annually, four months prior to the financial year-end.
Starting a business in South Carolina FAQs:
How much does it cost to start a business in South Carolina?
South Carolina articles of incorporation for LLCs cost $110.00.
South Carolina Registration and Filing Fees:
Corporation for profit
Corporation for nonprofit
Articles of Merger
You can find a comprehensive list of fees and costs here.
How do I register a business in South Carolina?
You can register your business with the South Carolina Secretary of State.
How do I start a business in South Carolina with no money?
- Use services to generate cash flow and fund a product-based business.
- Get creative to discover funding sources.
- Grind it out and look for business, even if you don't get paid for it.
- Use your current resources in different ways to generate income.
- Get a credit line to help with the early stages of your business.
- Locate an accelerator if you can hit the market swiftly.
- Crowdfund and allow the public to invest a small percentage of money in return for a future buy-in.
- Use a business incubator to provide funding designed specifically to financially assist a startup company.
How can I protect the name and logo of my business in South Carolina?
The easiest way is to register your business name on the U.S. Patent and Trademark Office website. Prior to registration, remember to check on the Trademark Electronic Search System and the South Carolina Department of State website to ensure that your business name is not already registered by another company.
Do I need workers’ compensation for my new business in South Carolina?
All employers in South Carolina are compelled to provide workers’ compensation coverage to their employees.
Does my business in South Carolina need to contribute to health insurance?
Health insurance isn’t a requirement for small businesses in South Carolina.
Browse The SMB Guide for more helpful articles for small business owners, and be sure to download our How to Start a Small Business checklist.