State formation of a Limited Liability Company is one of the most suitable options if the enterprise is being established for a consulting business or similar venture.
LLC Formation Costs are an important consideration, as LLCs are primarily established for ease and flexibility, providing small business owners with the benefits of a corporation with none of its legwork or management model hassles.
If you start, understanding what will cost you can play a key role.
How Much Does It Cost to Form an LLC in South Carolina?
The next step to creating an LLC in South Carolina is being aware of the total cost the filing fee will have to incur. This is where $110 is taken to be the Filing Fee for filing your Articles of Organization — another term of registering the LLC with the Secretary of State.
You will find articles about the organization for the LLC on the website of the South Carolina Secretary of State. This will require all the information for each and every business.
This also includes the name of the LLC, the names of your LLC members, and the information about your registered agent. Being filed, this is what, legally, is sent to your LLC.
Other Fees to Expect
The minimum fee to be filed to get an LLC is $110; this, however, is not all:
Registered Agent Fees
South Carolina requires an LLC to have a registered agent, which is someone or a business authorized to receive legal documents on behalf of your company.
You can be your registered agent; however, many opt for hiring a service. This service usually costs between $100 and $300 annually.
Operating Agreement
There is no requirement that your LLC file documents in each state, but it is always recommended that your LLC establish an operating agreement outlining the ownership and terms of operation.
Considering LLC Formation Costs, this agreement can be a crucial investment in your business structure.
If you want an outside counsel to provide one for you, it can cost in the range of $100 to $500, depending upon the complexity of your business.
Licenses and Permits
Based on the type of industry, local laws, and other factors, there are some licenses or permits needed to conduct legal business. These also vary from city to city and county to county.
Therefore, it is suggested to get in touch with the local authorities. This can be anywhere from $50 to a few hundred dollars.
Legal and Professional Services
As a first-time LLC founder, or just for reassurance that you are doing things the right way, you may opt to engage an attorney or a business formation service. Legal advice may run from a few hundred to several hundred dollars.
However, many founders end up using services that could fill that gap between doing it all yourself and hiring full representation. For instance, at MyCorporation, the package starts at $99.
Taxes and Ongoing Costs
After setting up your LLC, you’ll also face some cost implications while running your business in South Carolina.
Taxation in South Carolina LLCs
South Carolina LLC Taxation is a pass-through tax entity. Therefore, at a company level, the company will not be levied on the firm’s profit. LLC Formation Costs should also be considered when evaluating tax obligations.
The benefit in tax comes as a pass-through to the members of an LLC who shall account for profits or losses on an income tax return.
However, there are other forms of tax applied which are self-employment at the federal level and income at the state level.
Franchise Tax
Of the very few states, South Carolina is exempted from having a franchise tax for LLCs. This is a huge advantage since your ongoing costs will be smaller compared to other states.
Professional Services
If you are starting a consulting business, you may require professional services in accounting and legal consultation. The accountant can assist you in doing business finance, and the lawyer can review contracts, agreements with clients, and other legal activities.
Advantages of LLC in South Carolina
Now that you know the cost, it would only make sense to also look at some of the advantages associated with forming an LLC in South Carolina:
An enormous advantage of an LLC is that all your personal assets will be protected from liabilities the firm may incur. In other words, whether it’s a lawsuit against your business or even financial problems, your personal savings, house, and other assets are absolutely safe.
Then, LLCs have flexibility in their taxation. LLCs automatically benefit from pass-through taxation. You can, however, elect to have your LLC taxed as an S-corporation or C-corporation. The flexibility allows you to determine which tax system suits your business model best.
LLC is less formalistic compared to the corporation. LLCs do not require annual meetings like corporations, and there is no requirement for a more detailed recording of decisions in a company. This makes LLCs easy to manage, especially when used for small businesses or startups.
Lastly, an LLC gives your business creditability, especially when the services involve more consultancy and advisory services. Clients and partners would rather do business with an LLC than a sole proprietorship; the latter lacks the formality that the former has.
LLC Formation Costs in South Carolina: Fees, Benefits & What to Expect
It is of great significance to know the cost involved if you plan to set up an LLC in South Carolina. That would cost $110 as filing fees; however, there are also optional costs (e.g., registered agent/legal counsel).
However, there is a great deal of work to be done before starting. For small business owners, the LLC model offers ease of management and adaptability, making it a practical choice.
It also provides personal asset protection and enhanced credibility, which are significant advantages.
Regardless of whether it’s a consulting company or any other kind of business, operating an LLC in South Carolina has several advantages and is a very simple process with low costs.
