South Carolina is one of the lowest-maintenance states to run an LLC in: a reasonable filing fee, no franchise tax, and for most LLCs, no annual report to file with the state at all. Here's what it takes to start a business in South Carolina in 2026.
1. Which business structure fits you?
Before you file anything, it helps to know what you're actually choosing between.
- Sole proprietorship. No filing required to start, and you and the business are legally the same entity. Simple, but you're personally liable for whatever the business owes.
- Partnership. Two or more people running a business together, with the same liability exposure as a sole proprietorship, just split across partners.
- LLC. The most common structure for small businesses in South Carolina. It separates your personal assets from the business's debts and lawsuits.
- Corporation, either S-corp or C-corp. More paperwork and more formality, usually worth it once you're bringing on investors or multiple shareholders. Note that LLCs that elect S-corp tax status are the one exception to South Carolina's no-annual-report rule below.
For a deeper comparison, see our guide on choosing a business structure.
LLCs and corporations register with the South Carolina Secretary of State, the agency that handles business filings statewide. Sole proprietorships and general partnerships don't register there.
2. Register your business
Forming an LLC
You form an LLC in South Carolina by filing Articles of Organization with the Secretary of State. The filing fee is $110 by mail or $125 online (the extra $15 covers electronic records access), and online filings typically process within about 24 hours.
Every LLC needs a registered agent with a physical South Carolina address, available during business hours. You can act as your own agent, or hire a commercial service.
South Carolina doesn't require an operating agreement by law, but it's still worth writing one, particularly for multi-member LLCs, to spell out how decisions and profits get split.
Sole proprietorships and DBAs
Sole proprietorships don't file with the Secretary of State. If you're operating under a trade name, requirements vary by county, so check with your local government about registering it.
3. Get an EIN
An Employer Identification Number is free straight from the IRS and takes about 15 minutes online. You'll need one to open a business bank account, hire anyone, or file most business tax forms, even if you're a single-member LLC with no employees.
4. Check licenses and permits
South Carolina doesn't issue a single general statewide business license either. What you need depends on your industry and city: professional licensing for regulated fields, a local business license in cities like Charleston and Columbia, and a Retail License from the Department of Revenue if you sell taxable goods. Our guides on professional licensing by industry and zoning laws for home businesses cover more of this.
5. Understand South Carolina taxes
South Carolina overhauled its income tax structure starting in 2026: a two-bracket system with 1.99% on taxable income up to $30,000 and 5.21% above that (minus a small fixed adjustment), down from a graduated system that topped out around 6% to 6.5%. Pass-through LLCs owe no separate franchise tax.
Sales tax starts at a 6% state base, with counties able to add local option taxes of up to 3%, pushing combined rates to as high as 9% in cities like Charleston and Myrtle Beach.
6. Stay compliant
This is the short section, because South Carolina doesn't require most LLCs to file an annual report with the Secretary of State at all. The one exception is LLCs that elect to be taxed as an S-corporation, which do have to file annually. For everyone else, your only real ongoing state obligation is keeping a registered agent on file and staying current on whatever taxes apply to your business.
South Carolina business costs at a glance
| Item | Cost |
|---|---|
| Articles of Organization (LLC) | $110 mail / $125 online |
| Annual report (standard LLC) | Not required |
| Registered agent service (optional) | $50 to $200/year |
| EIN | Free (IRS) |
| State income tax | 1.99% up to $30,000, 5.21% above |
| State sales tax | 6% + up to 3% local, up to ~9% |
Frequently asked questions
Does South Carolina require an annual report for LLCs?
No, most LLCs don't file one at all. The one exception is LLCs that elect S-corporation tax status, which must file annually.
How much does it cost to form an LLC in South Carolina?
$110 by mail or $125 online for Articles of Organization.
What changed about South Carolina's income tax in 2026?
It moved to a two-bracket system: 1.99% on taxable income up to $30,000 and 5.21% above that, down from a graduated system that topped out around 6% to 6.5%.
How high is sales tax in South Carolina?
A 6% state base, with counties adding local option taxes of up to 3%, pushing combined rates to as high as 9% in cities like Charleston.
Does South Carolina have a franchise tax?
No, pass-through LLCs owe no separate franchise tax.
Fees and rates above come from the South Carolina Secretary of State and Department of Revenue as of 2026, and they do change over time, so double check before you file. None of this is legal or tax advice. Talk to a South Carolina-licensed attorney or CPA about your specific situation.