A Limited Liability Company (LLC) needs state formation to establish itself as a consulting business or a similar venture. LLCs are primarily established for the ease and flexibility of customers. Further, they provide small business owners with the benefits of a corporation with none of its legwork or management model hassles.
If you are also a small business in South Carolina, then you should understand what it will cost you. Because it’ll help you understand how much you should do with your budget and other operations to make them real.
Let’s Begin, then!
How Much Does It Cost to Form an LLC in South Carolina?
The next step to establishing an LLC in South Carolina is being aware of the total cost. The filing fee will have to experience. 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 helpful information about the organization for the LLC on South Carolina Secretary of State. It requires your business information, including 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 You Should Expect
The minimum fee to be filed to get an LLC in South Carolina is $110; this, however, is not all:
- Registered Agent Fees: South Carolina requires an LLC agent who serves as a business authorized to receive legal documents on behalf of you. You can be your registered agent; however, many optimize for hiring a service. This service usually costs between $100 and $300 annually to a business.
- 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. If you want outside counsel, it can cost in the range of $100 to $500, depending upon your business complexity.
- Licenses and Permits: Its cost is 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. Hereby, 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 go for engaging 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 You Will Have to Pay
After establishing your LLC, you’ll also face some cost implications while running your business in South Carolina. Here are the details:
- Taxation in South Carolina LLCs: South Carolina LLC Taxation is a pass-through tax commodity. Accordingly, at a company level, the company will not be charged on the firm’s profit. 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. 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:
- Assets Safety: A huge advantage of an LLC is protection of your personal assets from liabilities the firm experience. In other words, whether it’s a lawsuit against your business or even financial problems, your personal savings, house, and other assets are safe.
- Taxation Flexibility: LLCs have flexibility in their taxation. These companies 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.
- Less Formalistic: 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.
- Gives Credibility: 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.
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).
Conclusion
There is a great deal of work to be done before starting to understand the cost you will pay for a company. 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.
