Starting a new business in South Carolina? Follow these eight steps!

Create a business plan: Do your research, and make sure to consider:

Who you are:

  • Your product or service
  • Target customers
  • Business structure
  • Business name
  • Location
  • Financial projections

What you need:

  • Suppliers
  • Marketing and advertising
  • Labor and employees
  • Funding/financing (Savings, loans, venture capital investments, grants if you're a non-profit organization)
  • Demand for your product

More resources

  • South Carolina Small Business Development Center (SC SBDC) - Offers one-on-one counseling to prospective business owners. The SC SBDC is part of a cooperative agreement with the U.S. Small Business Administration, and their mission is to advance South Carolina’s economic development by helping entrepreneurs grow successful businesses.
  • South Carolina Jobs-Economic Development Authority (JEDA) - Enables small businesses in South Carolina to obtain short to long-term financing to help businesses grow and expand, ultimately creating and retaining jobs in South Carolina.
  • SCORE - Connects entrepreneurs with free, confidential business mentoring in person or remotely via email, phone and video in all 50 U.S. states and territories. SCORE is a 501(c)(3) nonprofit organization and a resource partner of the U.S. Small Business Administration (SBA) and offers mostly free services for entrepreneurs.
  • U.S. Small Business Administration (SBA) - Offers guaranteed loan programs for qualifying business owners. They also offer limited grant programs.
  • USA.gov - Helps you locate and understand government benefits, programs, and information. Offers great basic knowledge on options for funding your business.
  • Grants.gov - Provides a comprehensive resource on federal grants.

This step is required if you will operate as a:

  • Business corporation
  • Nonprofit corporation
  • Limited liability company (LLC)
  • Limited partnership (LP)
  • Limited liability partnership (LLP)

Sole proprietorships do not need to register with the SC Secretary of State unless you plan to apply for a trademark.

See our Secretary of State page or the SC Secretary of State website for more details.

Your EIN is a federal tax ID number issued by the Internal Revenue Service (IRS) and typically serves as your business's unique identifier for the IRS, the state of South Carolina, and most banks. Think of it as your business's Social Security Number.

You are required to get an EIN if you:

  • Have a business that operates as a partnership, limited liability company (LLC), corporation, or tax-exempt organization - More on business structures
  • Have employees
  • Will need to pay employment, excise or alcohol, tobacco, and firearms taxes
  • Withhold taxes on income, other than wages, paid to a non-resident alien

If you will operate as a sole proprietor, you can register your business using your Social Security Number (SSN). You may still choose to apply for an EIN if you want to open a bank account tied to your business instead of your personal SSN.

Apply for your EIN for free with the IRS.

Most municipalities or counties require you to obtain a local business license. Find out whether your location requires a local business license from the Local Business License Renewal Center website.

  • South Carolina does not have a statewide business license.
  • If you will operate from your home, your business's location is your home address.

You'll need a Retail License to make sales and provide certain services in South Carolina. Most businesses also need to pay Sales & Use Tax and Business Personal Property Tax.

You can apply for all these and more with the South Carolina Department of Revenue's (SCDOR) Business Tax Application—a one-stop-shop to apply for the tax accounts you need to be compliant. See the SCDOR's website for more information.

Once you get your Retail License, you're typically required to start filing monthly returns with the SCDOR, even if you aren’t making sales or generating income yet. 

Common taxes for businesses in South Carolina include:

You'll need to consider both Individual Income Tax and Business Income Taxes. To know how to pay Income Tax as a business owner, first determine your business structure and then consult with a qualified business consultant.

Pass-through model

Generally speaking, using a "pass-through" model is most common if you're a sole proprietor, LLC, partnership, or S corporation. You don't pay income tax at a business level. Instead, your business profit "passes through" to you as the owner and you will report your profits on your personal tax return. This means your business income would be taxed at your Individual Income Tax rate and you would file state taxes using the SC1040. Don't forget: In this scenario, you'll need to make estimated payments each quarter. 

Other options

If your business is a corporation, there are other Corporate Tax options to consider that do not operate on a pass-through model. Generally speaking, your C corporation could pay tax directly to the SCDOR and shareholders could pay tax again on any dividends. Your S corporation could also consider filing composite returns.

Partnerships

If your business is a partnership, you also may need to file a Partnership Tax return each year. This is typically an informational return rather than a tax bill, although in some cases involving out-of-state partners, the partnership might have to withhold and pay tax on the partner's behalf. 

This is general information and should not be considered personalized tax advice.

Steps when hiring new employees

Businesses with employees are required to complete the following:

  1. Complete the Employment Eligibility Verification (Form I-9) from US Citizenship and Immigration Services.
  2. Verify the employee’s employment status through the E-Verify system.
  3. Report all SC New Hires to the South Carolina Department of Social Services.  
  4. Register for state withholding with the South Carolina Department of Revenue.
  5. Register for State Unemployment Insurance Tax (SUITS) to the South Carolina Department of Employment and Workforce.  
  6. Maintain Workers’ Compensation insurance coverage. Learn more at the South Carolina Workers Compensation Commission.
  7. Post state required employment posters from the South Carolina Department of Labor, Licensing, and Regulation in a place where employees can see them.
  8. Check to see if your new hire qualifies your business for the Work Opportunity Tax Credit (WOTC).

Learn more on our Hiring Employees page.

Once you're officially in business, check out the Established Business and Business Compliance sections of our website for more on keeping your business compliant for the long haul!