Incorporate in South Carolina for FREE^*

Incorporation is the process of registering a business as a corporation and making it recognizable under law as its own legal entity. Incorporating a business can be a complicated process because each state has its own requirements for registering and operating a business as a corporation. Knowing the necessary steps and forms, however, will help keep you organized and stress-free. 

With our easy business registration service, you simply answer a few questions and we create your initial paperwork and file it with the state for you. The first business entity registration is free for Rocket Legal+ members—you pay only the state filing fees. Then, you can make and personalize all the legal documents you need for your business. Store everything online in your Rocket Lawyer account.

What is a C-Corp? 

A C-Corp, or C-Corporation, is a common business entity type. More specifically, a C-Corp is a corporation taxed under Subchapter C of the U.S. Code. Under Subchapter C, corporations are subject to tax at both the corporate and individual level (sometimes called “double taxation”). Depending on the situation, this may result in lower or higher tax burdens for the shareholders. 

C-Corps allow for anyone to be an investor and for an unlimited number of shareholders and multiple share classes.

As with other types of corporations, C-Corporations provide a common and well-known legal structure for businesses and offer their shareholders some limited liability. Except for certain instances of fraud or misconduct, a shareholder is not liable for the debts or obligations of a corporation beyond the shareholder's investment into the corporation.

Corporations are treated as a C-Corp by default, unless another type of tax treatment is selected, such as an S-Corp.

What is an S-Corp? 

Like C-Corps, S-Corps provide a common and well-known legal structure for businesses and offer their shareholders some limited liability. However, S-Corps have two main differences from C-Corps: they are taxed differently and they have more restrictions with shares.

An S-Corporation, or S-Corp, is an IRS election that allows a company to be treated like an LLC for income tax purposes, that is, as a “pass-through" entity. Instead of income taxes being owed at both the company and individual level, the income of an S-Corp is only taxed at the individual level, which means it passes through the company directly to the owners and shareholders. Again, this may result in lower or higher tax burdens for the shareholders depending on the situation.

S-Corps have more restrictions regarding shares and shareholders than C-Corps. Specifically, S-Corps can have no more than 100 shareholders, only one class of shares, and only U.S. residents or citizens as investors.

One area of common confusion is what type of entity can elect S-Corp status. Remember that this election is simply a tax choice, not a governance or legal structure choice. Both limited liability companies (LLCs) and corporations can choose S-Corp status if they qualify under the IRS's guidelines.

There are similarities between a South Carolina S-Corp and a C-Corp regarding personal liability, management, structure, and compliance. The differences in South Carolina, however, come down to the following:

• Ownership Rules: C-Corps have no limits on the number of shareholders or stock classes they may have. S-Corps are limited to no more than 100 shareholders and one stock class. Only U.S. citizens or legal residents may own shares in an S-Corp.
• Taxes: A C-Corp is taxed as its own entity. It pays taxes at the corporate level. Individual shareholders may also pay taxes on any dividends they receive. An S-Corp is not taxed as a separate entity. It has a "pass-through" tax structure. It distributes income to its owners, who pay taxes on their individual returns.
• Documents: When you file as a corporation, your business is automatically a C-Corp. To become an S-Corp, you must file IRS Form 2553, Election by a Small Business Corporation, to elect this status.

Your corporation’s name should be unique and make a statement about your business. Make sure it complies with the following South Carolina requirements:

• Your name must include "Corporation," "Incorporated," "Company," "Limited," or an abbreviation of one of these terms. You may also use words or abbreviations with the same meaning in another language.
• Do not use a deceptive name that implies a business purpose other than those permitted by law or in your Articles. For example, don't name your business "Mobile Communications, Inc." if you've incorporated as a landscaping company.
• Make sure your name is not the same as, or too similar to, a business name already registered or reserved with the South Carolina Secretary of State.

Need help coming up with a business name for your corporation? Try the Rocket Copilot™ AI Business Name Generator, a free tool to help you brainstorm business names and get started registering your corporation.

Each state has its own personnel requirements for incorporating. In South Carolina, corporations need one or more directors. South Carolina does not require that directors live in the state.

State the number of directors of your corporation in your bylaws. You don't have to list your directors in your Articles of Incorporation, but you can if you choose to.

Every corporation needs a registered agent to accept important tax, legal, and government documents on its behalf. Your agent must have a physical South Carolina address and must be available during regular business hours. You must list your agent's name and physical address in your Articles. 

Although your corporation cannot act as its own agent, a director or officer of the corporation can. In this case, their name and address will be recorded in public records as the registered agent. A common alternative is to use a registered agent service so your personal business address can remain private and you can avoid unwanted third-party solicitations.   Rocket Lawyer can help you designate your registered agent when you register your business with us.

You must also include the following information in your Articles of Incorporation in South Carolina:

• Your corporate name.
• If issuing only one share class, the total number of shares authorized to issue.
• If issuing multiple share classes, the class designation and number of shares of each class, along with the relative right, preference, and limitations of each class and series. At least one share class must have unlimited voting rights.
• The names, addresses, and signatures of all incorporators.

South Carolina allows you to include additional information in your Articles if you like. These include:

• The purpose of your corporation.
• The par value of stock shares.
• Limits or other regulations on the powers of the corporation, its directors, or shareholders.

South Carolina requires that you file two additional documents along with your Articles of Incorporation:

• A certificate stating that your Articles meet all necessary requirements of the section of the state statute regarding Articles of Incorporation. This certificate must be signed by an attorney licensed to practice in South Carolina.
• Your initial annual report and license fee.

Nearly every state has standard processing times, but not all provide expedited processing for corporations. In South Carolina, there are a few fees that you may be charged when you register your business as a corporation. They include the following:

State fee: $225.

Rocket Lawyer filing fee: $0 $99.99.

• First filing FREE* for Rocket Legal+ members (excluding state fees).
• Get additional filings HALF OFF with Rocket Legal+.

Processing time: 10-15 business days.

Note: The above state fees and processing times (including expedited processing fees and times) are provided as a summary and may or may not encompass various fees mandated by your state or local authorities. Your state may also change these fees and processing times over time and without notice. If you have questions, speak to a Rocket Lawyer Business Pro to understand the costs and processing times that apply to your specific filing.

Businesses can save up to $2,500 per year with a Rocket Legal+^™ membership. This calculation is based on total savings on an initial business registration and registered agent, trademark, and business tax filing services for Rocket Legal+ members (a total cost of $924.97) compared to Rocket Legal members (a total cost of $1,949.96). This is in addition to savings on the average cost of 5 hours for document preparation by a non-Rocket Lawyer network attorney at the average attorney hourly rate in the U.S. of $300 (an estimated cost of $1,500 when purchased without any form of Rocket Lawyer membership) compared to unlimited use of customizable business documents for both Rocket Legal+ and Rocket Legal members at no extra cost.

Yes, your new corporation does have to pay taxes. The first thing you must do is apply to the IRS for an employer identification number, or EIN. This federal tax ID is similar to a Social Security number, but it's for businesses. All businesses with employees must have one.

We have more information about the tax structures of both S-Corps and C-Corps.

In South Carolina, you must also create and maintain additional documents to preserve your corporate status. These are the two most important ones:

• Bylaws: A corporation's Bylaws formalize its management, structure, and operating procedures. The Bylaws must be consistent with your Articles of Incorporation and the law.
• Meeting Minutes: Every corporation must record actions and decisions that occur during directors' and shareholders' meetings. These records are called Minutes. You must keep them for 10 years at your corporate headquarters.

Neither document must be filed with the state in South Carolina, but requirements for Bylaws and Meeting Minutes vary by state. Keep your documents with your other corporate records at your principal office.

We wish you success with your new South Carolina corporation! You can count on Rocket Lawyer for all the business, tax, and legal help you need at a price you can afford.

If you are planning to operate in another state, you may need to register a corporation in that state. Rocket Lawyer can help you determine which states you should register in.

Other states may have their own rules for foreign corporations that originate in South Carolina or domestic corporations that also operate in South Carolina. Talk to an attorney to understand the legal and tax requirements for the state(s) in which you plan to operate.