How to Start a C-Corp in South Carolina (Quick Answer)
To start a C-corp in South Carolina, file Articles of Incorporation with the South Carolina Secretary of State through the Business Entities Online portal, name a registered agent, and pay the $135 filing fee. That $135 covers both the Articles and the one-time CL-1 initial report the state requires alongside them. Once the state accepts the filing, your corporation legally exists.
After that, you adopt bylaws, appoint directors and officers, issue stock, and get an EIN from the IRS. South Carolina has no Secretary of State annual report for corporations; the yearly obligation runs through the Department of Revenue instead.
| Filing document | Articles of Incorporation, filed with the one-time CL-1 initial report |
| Where to file | South Carolina Secretary of State (Business Entities Online) |
| Filing fee | $135 ($110 for the Articles plus the $25 CL-1 initial license fee) |
| Registered agent | Required, with a physical South Carolina street address |
| EIN | Required, free from the IRS (Form SS-4 by phone, fax, or mail if you have no SSN or ITIN) |
| Annual report | No Secretary of State annual report; the corporation files an annual license fee (franchise tax), minimum $25, and the 5% income tax with the Department of Revenue |
| Corporate income tax | Flat 5% on South Carolina taxable income |
| Foreign owner (25% or more) | File Form 5472 with Form 1120 every year, or face a $25,000 minimum penalty |
First-year cost: $135 to file the Articles and CL-1 together, plus a registered-agent service if you use one, commonly $50 to $150 a year.
South Carolina pairs a flat 5% corporate income tax, one of the lower flat rates in the country, with a filing system that skips the annual Secretary of State report most states require.
Light does not mean nothing, though. The corporation still files an annual license fee and the 5% income tax with the Department of Revenue, and the CL-1 is due within 60 days.
TL;DR
- No Secretary of State annual report, but the corporation still files an annual license fee and the 5% income tax with the Department of Revenue, plus a one-time CL-1 within 60 days.
- Step 1, name: pick a unique name with a corporate designator (Inc., Incorporated, Corporation, or Corp.) and check it with the Secretary of State.
- Step 2, registered agent: name one with a physical South Carolina street address.
- Step 3, Articles of Incorporation: file with the Secretary of State for $135, which includes the CL-1 initial report.
- Step 4, bylaws: adopt internal bylaws and keep them with your records.
- Step 5, directors and officers: appoint the board and officers and hold an organizational meeting.
- Step 6, issue stock: authorize and issue shares, keep a stock ledger, and file the 83(b) election within 30 days if your shares vest.
- Step 7, EIN: get a free EIN from the IRS, by Form SS-4 if you have no SSN or ITIN.
- Foreign owner (25% or more): file Form 5472 with Form 1120 every year, or risk a $25,000 penalty.
- Ongoing: an annual license fee (franchise tax) of at least $25, plus the flat 5% corporate income tax, both filed with the Department of Revenue.
Why Form a C-Corp in South Carolina?
South Carolina keeps corporate maintenance simple, with a low flat tax and no recurring Secretary of State report to track.
- A flat 5% corporate income tax, among the lower flat corporate rates in the country.
- No Secretary of State annual report; the yearly filing runs through the Department of Revenue instead.
- A fully online filing system, usually processed within one to two business days.
If you plan to raise venture capital, investors will most likely want a Delaware C-corp. If you will run the business in South Carolina and not raise venture money, forming here avoids registering and paying in two states.
Step 1: Choose and Reserve Your Corporate Name
- Include a corporate designator such as "Inc.", "Incorporated", "Corporation", or "Corp."
- Search the Secretary of State's business database to confirm the name is available and different from existing entities.
- South Carolina lets you reserve a corporate name for a nonrenewable 120-day period for $10 if you are not ready to file.
Step 2: Appoint a South Carolina Registered Agent
Every South Carolina corporation must name a registered agent with a physical South Carolina street address, available during business hours to receive legal and state documents.
- The agent can be a person or a company, but needs a real South Carolina address, not a PO box.
- The address is public record, so many owners use a commercial service.
- A commercial agent commonly costs $50 to $150 a year.
Step 3: File Your Articles of Incorporation
The Articles of Incorporation is the filing that legally creates your corporation. In South Carolina you file it with the Secretary of State through the Business Entities Online portal, along with the CL-1.
- It lists the corporate name, registered agent, principal office, and the number of shares the corporation is authorized to issue.
- The fee is $135, covering the $110 Articles filing and the $25 CL-1 initial license fee.
- Once the state accepts it, your corporation exists and its compliance calendar begins.
Step 4: Adopt Corporate Bylaws
Bylaws are the internal rulebook for how the corporation is run. They are not filed with the state, but a corporation is expected to have them, and banks and investors often ask to see them.
- They set out how directors and officers are elected, how meetings and votes work, and how shares are handled.
- They stay with your records, not with the Secretary of State.
- Skipping them weakens the separation between you and the corporation that liability protection depends on.
Step 5: Appoint Directors and Hold the Organizational Meeting
A corporation is run by a board of directors, who appoint the officers that handle day-to-day work. Right after formation, the incorporator or initial directors hold an organizational meeting, or sign a written consent in place of one.
- Appoint the initial board and elect officers (usually at least a president, secretary, and treasurer; one person can hold several roles).
- Adopt the bylaws and authorize the issuance of stock.
- Keep signed minutes or the written consent with your records.
Step 6: Authorize and Issue Stock
Issuing stock is how founders get their ownership, and it is easy to rush. The board authorizes shares, then the corporation issues them to the founders and any early shareholders.
- Issue shares to each founder and record what they paid (cash, property, or services).
- Keep a stock ledger, a running record of who owns how many shares.
- Deliver stock certificates or record the issuance electronically, per your bylaws.
The 83(b) election, and its 30-day deadline: if your founder shares vest over time, you generally have 30 days from the grant date to file an 83(b) election with the IRS.
It lets you be taxed on the small value at grant instead of the higher value as the stock vests. The 30-day window cannot be extended, and missing it can be expensive.
Step 7: Get an EIN, Even Without an SSN
An EIN is your corporation's federal tax ID, needed to file taxes, run payroll, and open a bank account. It is free from the IRS.
- With an SSN or ITIN, apply online and get the EIN in minutes.
- Without an SSN or ITIN, apply on Form SS-4 by phone, fax, or mail.
- The EIN is always free; you never pay the IRS for one.
Open a US Business Bank Account
Once you have the EIN, open a dedicated business bank account before money moves through the corporation.
- Keeping corporate and personal funds separate protects the liability shield; mixing them is a common reason courts pierce it.
- Banks usually ask for the filed Articles of Incorporation, the EIN letter, and often the bylaws or a board resolution.
- A separate account also makes bookkeeping and the corporate tax return simpler.
If Your South Carolina C-Corp Is Foreign-Owned
A South Carolina C-corp that is 25% or more owned by a non-US person has an extra federal filing that many international founders miss.
- The corporation files Form 5472 with its annual Form 1120 to report transactions with the foreign owner, such as money put in or paid out for services.
- It is required every year there are reportable transactions, even with little or no profit.
- The penalty is steep: a missed or late Form 5472 starts at $25,000 per form, per year.
Handle South Carolina's Ongoing Compliance
South Carolina handles corporate compliance differently from most states. There is no annual report with the Secretary of State. Instead, two things run through the Department of Revenue each year: the license fee and the income tax.
The Corporate License Fee (Franchise Tax)
- South Carolina charges an annual corporate license fee, sometimes called a franchise tax, of 0.1% of capital and paid-in surplus plus $15, with a $25 minimum.
- It is filed with the corporate return (Form SC1120) to the Department of Revenue, not the Secretary of State.
- A one-time CL-1 initial report, carrying a $25 initial license fee, is due within 60 days of starting business, and it is included in the $135 filing fee.
South Carolina Corporate Income Tax (5%)
- South Carolina charges a flat 5% corporate income tax on South Carolina taxable income.
- It is filed with the Department of Revenue on Form SC1120, separate from the federal Form 1120.
- Federally, the corporation files Form 1120 and pays 21% corporate tax, due the 15th day of the 4th month after year-end.
How Much Does It Cost to Start a C-Corp in South Carolina?
| What you pay | Amount | When |
|---|---|---|
| Articles of Incorporation filing (with CL-1) | $135 | One time, at formation |
| Registered-agent service (optional) | ~$50 to $150 a year | Yearly, if you use one |
| Corporate license fee (franchise tax) | Minimum $25 (0.1% of capital and paid-in surplus plus $15) | Yearly, with the SC1120 |
| South Carolina corporate income tax | Flat 5% of South Carolina taxable income | Yearly |
| Federal corporate tax | 21% of profits | Yearly, with Form 1120 |
How Long Does It Take to Start a C-Corp in South Carolina?
- Online filings through the Business Entities Online portal are usually processed within one to two business days.
- The EIN follows: minutes online with an SSN or ITIN, or same day to several weeks by Form SS-4 without one.
- Bylaws, the organizational meeting, and issuing stock happen right after the state approves the filing.
Common Mistakes to Avoid
- Missing the one-time CL-1 initial report, which is due within 60 days of starting business in South Carolina.
- Assuming no Secretary of State report means no ongoing filing, when the license fee and 5% income tax still run through the Department of Revenue.
- Missing the 30-day 83(b) deadline on vesting founder stock.
- Overlooking Form 5472 if the corporation is 25% or more foreign-owned.
- Using a PO box for the registered agent, which South Carolina does not accept.
How FinStackk Helps
FinStackk is an accounting and tax compliance platform for U.S. businesses, taking you from incorporation through ongoing accounting, tax, and compliance in one place.
We handle South Carolina C-corp formation, from the Articles of Incorporation and CL-1 through the EIN, through Fin-Start, including the South Carolina registered agent.
Once the corporation exists, Fin-Tax keeps the federal Form 1120 deadline, estimated taxes, and the South Carolina 5% corporate income tax on a proactive calendar. Complyy tracks the annual license fee and registered-agent renewal. Book a free demo to see them in action.
FAQ
How much does it cost to start a C-corp in South Carolina?
It costs $135 to file the Articles of Incorporation with the Secretary of State, which includes the $25 CL-1 initial license fee. Add a registered-agent service (about $50 to $150 a year) if you use one. Going forward, the main recurring items are the annual license fee, at least $25, and the flat 5% corporate income tax.
Does a South Carolina C-corp file an annual report?
Not with the Secretary of State. South Carolina does not require corporations to file a separate Secretary of State annual report. Instead, the corporation files an annual license fee (franchise tax) of at least $25 and the 5% income tax with the Department of Revenue on Form SC1120. A one-time CL-1 initial report is due within 60 days of starting business.
Does a South Carolina C-corp pay state income tax?
Yes. South Carolina charges a flat 5% corporate income tax on South Carolina taxable income, filed with the Department of Revenue. That is in addition to the 21% federal corporate tax on Form 1120 and the annual license fee. The 5% rate is among the lower flat corporate rates in the country.
Is it better to form a C-corp or an LLC in South Carolina?
An LLC is simpler and taxed once, which suits many small businesses, and a pass-through LLC even skips the corporate license fee. A C-corp makes sense if you plan to raise venture capital, keep earnings in the business, or want multiple classes of stock. A C-corp is taxed twice, once at the corporate level and again on dividends.
Should I form my C-corp in South Carolina or Delaware?
If you plan to raise venture capital, Delaware is what investors expect. If you will operate in South Carolina and not raise venture money, forming in South Carolina is cheaper and avoids registering and paying in two states, since a Delaware corporation doing business in South Carolina still has to register and pay here. Choose based on where you operate and whether you will raise money.
Can a non-US resident start a South Carolina C-corp?
Yes. South Carolina sets no citizenship or residency requirement to own a corporation. You will need a South Carolina registered agent and an EIN, which you apply for on Form SS-4 by phone, fax, or mail without an SSN. If a non-US person owns 25% or more, the corporation also files Form 5472 with its Form 1120 every year, with a $25,000 minimum penalty for missing it.