Starting a business in South Carolina

South Carolina boasts one of the strongest economies in the region which makes it a promising location for budding entrepreneurs. To help give you and your business the best possible start, we have put together a list to help guide you through the major points such as applying for an EIN number in South Carolina or the different types of business structures that you will need to choose from.

Draft a business plan

Every business needs a business plan to chart the path of the company from conception to success, this is also key for attracting investors to provide funding. Check out how to write a business plan here or compare your current business plan to make sure you have not missed anything.

Secure funding

Your business needs funding to get off the ground and your business plan should include a detailed outline of the funds you will need to cover your business expenses for at least the first year. Most business owners do not have the means to self-fund their startup but thankfully there are a number of different options available to you. You can get a loan from the U.S. Small Business Administration, or a commercial bank or you can launch an equity crowdfunding campaign or even secure funding from an angel investor or venture capitalist group in South Carolina.

Decide on your business structure

The type of business entity you choose will have an impact in the future and depends on your industry and your goals. A brief overview of the different structures you have to choose from will follow:

Sole proprietorship – this is when you run a business by yourself and you are legally responsible for the business. There is no liability coverage here so your personal and business assets are intertwined.

Partnership – This is legally the same as a sole proprietorship except that it comprises two people rather than just one.

Corporation – This is a more complex structure in which the business is a separate legal entity.

LLC or Limited Liability Company – This is more of a hybrid entity between a sole proprietorship and a corporation and it offers the advantages of both. It provides the liability protection of a corporation but it is not subject to double taxation as the profits will go through your personal tax return.

Register your business

Once you have decided what structure your business is going to take then you can register it with the State of South Carolina. This process will vary depending on your business structure so do your research and check the South Carolina government website for more information.

Acquire federal and state tax IDs

Now is when you should obtain a Federal Employer Identification Number (EIN) – this is basically a social security number for a business that allows you to open bank accounts, handle payroll, and file taxes. An EIN is optional for sole proprietorships but is a requirement for corporations and LLCs.

Each state has its own laws and taxes when it comes to businesses so check the South Carolina Department of Revenue, Taxes & Insurance portal to learn about state-administered business taxes.

Share on Facebook

Tweet

Follow us