Form a S-Corp in South Carolina
Everything you need to know about forming a S-Corp in South Carolina. Filing fees, requirements, timeline, and step-by-step guidance.
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How to File
Choose a Corporate Name
Select a unique name for your S-Corporation that includes a required designator such as 'Corporation,' 'Incorporated,' 'Company,' or an abbreviation thereof. Verify name availability using the South Carolina Secretary of State's online business name search tool.
30 minutes
Appoint a Registered Agent
Designate a registered agent with a physical street address in South Carolina who is authorized to receive legal documents and official notices on behalf of the corporation. The registered agent can be an individual resident or a qualified commercial registered agent service.
1 hour
File Articles of Incorporation
Prepare and file Articles of Incorporation with the South Carolina Secretary of State, either online or by mail, paying the $135 filing fee. The articles must include the corporate name, registered agent information, number of authorized shares, and incorporator details.
1-2 hours
Create Corporate Bylaws
Draft corporate bylaws that outline the internal governance structure of your corporation, including rules for shareholder meetings, director responsibilities, officer roles, and voting procedures. While not filed with the state, bylaws are legally required under South Carolina law and must be kept on file at the principal office.
2-4 hours
What's Next After Filing
Once your S-Corp is officially formed, you'll want to complete these important steps:
- •Hold Organizational Meeting and Issue Stock — Conduct an initial organizational meeting of incorporators or directors to adopt bylaws, elect officers, and authorize the issuance of stock. Issue shares only to eligible S-Corp shareholders—no more than 100 shareholders, all of whom must be U.S. citizens or resident aliens.
- •Obtain EIN and File IRS Form 2553 — Obtain a federal Employer Identification Number (EIN) from the IRS at no cost, then file IRS Form 2553 (Election by a Small Business Corporation) to elect S-Corporation tax treatment. The election must be filed no later than two months and 15 days after the start of the tax year in which the election is to take effect.
- •Register for South Carolina State Taxes and Licenses — Register with the South Carolina Department of Revenue (SCDOR) for applicable state taxes, including corporate income tax, withholding tax if you have employees, and sales tax if applicable. Obtain any required local business licenses from the applicable city or county.
Advantages
- ✓Pass-through taxation avoids double taxation, with corporate income, losses, and deductions flowing directly to shareholders' personal tax returns
- ✓Shareholders who are active in the business may reduce self-employment tax liability by splitting income between reasonable salary and S-Corp distributions
- ✓Provides limited liability protection, shielding shareholders' personal assets from business debts and liabilities
- ✓South Carolina does not impose a franchise tax on S-Corporations, reducing overall state tax burden compared to some other states
Considerations
- •Strict IRS eligibility requirements limit S-Corps to 100 shareholders, and shareholders must be U.S. citizens or resident aliens, restricting investment flexibility
- •S-Corporations must adhere to more rigorous corporate formalities—such as holding annual meetings, maintaining minutes, and issuing stock—compared to LLCs
- •Only one class of stock is permitted, which can limit flexibility in structuring ownership and profit distributions among shareholders
Annual Obligations
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