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LLC Formation in South Carolina

In order to form a Limited Liability Company, or LLC, you must first understand what an LLC is and the purpose of creating one. An LLC is a legal entity with characteristics of both a corporation and a sole proprietorship or partnership. Essentially, an LLC is an unincorporated association, often an effective tool in estate planning for small business owners. It can distribute its income to each of its members in several ways, including equally or based on each member’s capital contribution. This differentiates an LLC from a corporation since a corporation distributes its income to shareholders on a per share basis. Also, unlike a corporation, which must pay its own taxes, an LLC is a "pass-through" tax entity (like a sole proprietorship or a partnership). The profits and losses of the LLC pass through to its owners and are reported on their personal tax returns. 

Forming an LLC, like other estate planning decisions, will have financial and personal consequences down the road, so it is very important to consult with a savvy estate planning attorney in order to fully understand what an LLC accomplishes and what it does not. In Charleston and the surrounding areas, the experienced estate planning attorneys of Wiles Law Firm, LLC are well-prepared to assist you. We will listen carefully to your long-term goals as well as to the details of your present situation, then clarify precisely what’s involved in an LLC formation. We will help you to decide whether creating an LLC will be beneficial to you, and, if so, will assist you in taking the necessary steps to create one.

Advantages of Forming an LLC in South Carolina

If you are a small business owner, forming an LLC may be a wise decision. Unlike corporations, LLCs are flexible, able to be tailored to the specifics of your business. As part of your estate plan, forming an LLC may enable your business to thrive while it remains protected from possible risks. There are a number of reasons that forming an LLC may be recommended by one of our estate planning attorneys, including to:

  • Raise seed capital -- smaller investors are reassured by the LLC designation
  • Protect your personal assets from business creditors, lawsuits, and probate fees 
  • Protect your intellectual property 
  • Allow investors using pass-through taxation to deduct their contributions and losses
  • Permit you to execute a short-term project, stating a specific date of dissolution
  • Minimize your tax burden 
  • Have the ability to alter profit distribution among members

As you can see, there are a great many possible benefits to forming an LLC. Our attorneys will provide you with in-depth knowledge about whether these possible benefits are workable in your particular case.

Steps Involved in Forming an LLC

Though not complicated for legal professionals, forming an LLC requires enough drafting and filing of documents, registrations, and deadlines to overwhelm the average person. It is reassuring to have an experienced lawyer at your side as you tackle the task, which includes:

Choosing a name for your LLC (e.g. LLC, LC, L.L.C., L.C.) Abbreviations for “limited” (Ltd.) or “company” (Co.) may also be used. The name you choose must be different from all other businesses in the state, so it must be checked against the South Carolina Secretary of State’s database. You may reserve your chosen name for 120 days for a small filing fee.
Filing Articles of Organization with the Secretary of State of South Carolina that include the name and address of the LLC and the LLC’s registered agent, as well as names and addresses of each organizer of the LLC. You must also inform the state about whether the proposed LLC will be member-managed or manager-managed. In the latter case, you must also supply the manager’s name and address. 

Appointing a registered agent for service of process, in other words, you must provide the name of a person or business entity that has agreed to accept legal papers on the LLC’s behalf in case of a lawsuit. The registered agent must have a street address in the state.

Preparing an operating agreement

Although South Carolina does not require an operating agreement, Wiles Law Firm recommends that you have one. The operating agreement summarizes your business’ rules and regulations. Once it has been signed by all members of the LLC, it becomes a legally binding contract.

Meeting tax and other requirements that apply in your situation, such as obtaining an Employer ID number (EIN) and any necessary business licenses. Also, if you will be selling goods, you will have to register to collect sales tax with the South Carolina Department of Revenue.

It should be noted that South Carolina does not require LLCs to file annual reports or to publish any documents. 

If You Think Forming an LLC May Be Helpful to You, Check with Wiles

At Wiles Law Firm, LLC, our accomplished estate planning attorneys provide customized service to each of our clients. We look forward to helping you make the right decisions concerning the organization of your small business so that it thrives, protected from the numerous risks that may threaten its stability and profits. We will also ensure that your personal assets are shielded from business creditors, excessive taxation, and lawsuits. Contact us by phone of by filling out a convenient form on our website.

Wiles Law Firm, LLC helps clients with their estate planning needs in Charleston, South Carolina and the surrounding areas such as West Ashley, Summerville, North Charleston, Mount Pleasant, and John's Island.

Information on this website is not legal advice. Further, viewing of the enclosed information does not create an attorney-client relationship with Wiles Law Firm, LLC. Matters will be handled by attorneys who primarily practice out of our office in Charleston County located at 852 Lowcountry Blvd., Ste. 101, Mt. Pleasant, SC 29464. M. Emerson Wiles, III is the attorney responsible for this advertisement.

Any result Wiles Law Firm, LLC may achieve on behalf of one client in one particular matter does not necessarily indicate similar results can be obtained for other clients. Please contact a South Carolina estate planning attorney or one of our attorneys with Wiles Law Firm, LLC for a consultation regarding your unique estate plan.

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852 Lowcountry Blvd., Suite 101, Mount Pleasant, SC 29464
| Phone: 843-718-0232

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