Starting a business in South Carolina requires careful planning and a solid legal foundation to ensure compliance with local, state, and federal regulations. Whether you are launching a small startup or a large corporation, understanding the necessary steps and legal requirements will help set your business up for success.
Essential Steps to Starting a Business in SC
Develop a Business Concept and Plan – Define your business idea, identify your target market, and outline a business plan that includes financial projections and operational strategies.
Choose a Business Structure – The legal structure of your business affects taxation, liability, and regulatory requirements.
Register Your Business Name – Ensure your chosen business name is available and register it with the South Carolina Secretary of State if required.
Obtain Necessary Licenses and Permits – Compliance with local, county, and state licensing requirements is critical for legal operation.
Apply for an EIN (Employer Identification Number) – Required for tax purposes and opening a business bank account, an EIN should be obtained after LLC approval.
Establish a Business Bank Account – Keeping business and personal finances separate is crucial for proper financial management.
Choosing the Right Business Structure
Selecting the appropriate business entity is essential for liability protection, taxation, and overall business operations. Common business structures in South Carolina include:
Sole Proprietorship – The simplest business structure where the owner and business are legally the same entity, leading to direct taxation.
Limited Liability Company (LLC) – A hybrid structure offering liability protection like a corporation while allowing pass-through taxation.
Corporation (C-Corp) – A separate legal entity ideal for businesses seeking investors and stock issuance, with potential tax benefits.
Nonprofit Corporation – Formed to further social causes, nonprofits reinvest revenue into their mission and may qualify for tax-exempt status.
DBA (Doing Business As) – A trade name registration allowing businesses to operate under a name different from their legal entity.
Understanding Business Costs in South Carolina
South Carolina ranks as the 25th least expensive state to start a business, making it a competitive choice for entrepreneurs. According to a recent study:
- Labor Costs: The state ranks #8 in labor costs, with an average annual wage of $57,932.
- Corporate Tax Rate: A 5% corporate tax rate applies, ranking #15 among U.S. states.
- Commercial Rent & Utilities: With an average rent of $16.28 per square foot and monthly electricity costs of $531.08, SC remains an affordable option.
- Regulations & Business Filing Fees: The state has approximately 83,372 regulations, and LLC filing fees are set at $135.
Tax and Regulatory Updates for 2025
- Business owners must stay informed about new tax regulations, including changes taking effect on May 1, 2025:
- Several South Carolina counties are adjusting their local sales tax rates, with increases in Georgetown, Jasper, and Sumter counties.
- The South Carolina Department of Revenue (SCDOR) offers MyDORWAY, a free online portal for filing sales tax returns and making tax payments.
- South Carolina Business One Stop (SCBOS) is a vital resource for new business registrations and compliance guidance.
How The Floyd Law Firm Can Help
For some, the complexities of business formation and corporate law can be challenging. The Floyd Law Firm PC provides comprehensive legal support for business owners and entrepreneurs at every stage, from startup to expansion.
Our Business & Corporate Law legal services include:
Business Formation & Dissolution (LLCs, Incorporations, Partnerships)
Drafting Operating Documents (Articles of Incorporation, Bylaws, Shareholder Agreements)
Contracts & Agreements (Franchise Agreements, Purchase Contracts, Leasing Agreements)
Employment & Intellectual Property Matters (Noncompete Agreements, Trademark Protection, Business Fraud Defense)
Litigation & Dispute Resolution (Contract Disputes, Business Fraud, Trade Secret Protection)
Whether you need guidance on entity selection, contract negotiations, or business litigation, our legal team is here to provide strategic counsel and advocacy. Contact The Floyd Law Firm PC to ensure your business operates within legal compliance and is positioned for long-term success.
Learn More:
Business & Corporate Litigation/Trials
What to Know Prior to Forming an LLC
