Friday, December 2, 2022

How To Start A Sole Proprietorship In South Carolina

Apply For Business Licenses And Permits

Start A Business (LLC) Online in North Carolina | NC’s New Online Process

Depending on what your business does and where it is located, there will likely be various business licenses and permits needed before starting your business. Some common registrations include:

  • Business License Some cities require businesses to obtain licensing before they can start. More information about city, county, and state business licenses are available on the South Carolina Business One Stop website.
  • Professional License Certain services such as barbershops, accountants, salons, and others must be licensed.
  • Retail License In order to sell products and certain services and collect sales tax, registration with the South Carolina Department of Revenue will be necessary.
  • Unemployment Insurance Registration Businesses with employees will need to register with the South Carolina Department of Employment and Workforce to register for unemployment insurance.

Setting Up An Unincorporated Business

  • Event Calendar
  • Sole ProprietorshipThe simplest form of a business is a sole proprietorship. In a sole proprietorship, you dedicate a portion of your money to business use, but do not form a new legal entity. You simply use your money and run your business. No written document is necessary to form a sole proprietorship, but a tax identification number, certain city or county business licenses, and types of insurance, such as worker’s compensation insurance, may be required. Because a sole proprietorship is not a separate legal entity, you, as the sole proprietor, will have unlimited personal liability for business obligations. You will also bear all the tax consequences of any profit or loss, which means that all profits will be added to your taxable income and all losses deducted from your taxable income. You will be responsible for withholding taxes on your employees. Basically, a sole proprietorship is an extension of yourself.

    PartnershipA second form of business entity is a partnership. A partnership is a group of two or more people who come together to carry on a business for profit. In South Carolina you are not required to execute a written partnership agreement, but, in order that all partners may fully understand their responsibilities and obligations, you and your partners should seriously consider signing a partnership agreement before you begin business.

    How To Become A South Carolina Sole Proprietor

    When it comes to being a sole proprietor in the state of South Carolina, there is no formal setup process. There are also no fees involved with forming or maintaining this business type. If you want to operate a South Carolina sole proprietorship, all you need to do is start working.

    However, just because its so easy to get started doesnt mean there arent some additional steps you should take along the way. While these parts of the process arent strictly required, many sole proprietors find that they are in their best interests.

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    How To Create A Sole Proprietorship In South Carolina

    If you are starting a business in South Carolina and want to operate it as a sole proprietorship, it isnt necessary to file any formation documents with the Secretary of State to create it. In fact, you can begin operating your business at any time. However, despite the fact that South Carolina doesnt impose formal requirements to create a sole proprietorship, there are other state requirements you must comply with.

    Is A Dba Better Than Changing The Legal Name Of My Business

    All about Sole Proprietorship and How to Start One

    Both solutions could give you a new name for your business. But in most cases, filing a DBA is a simpler, quicker, and less expensive process than a legal name change. And remember, you can register multiple DBAs. So, if your business operates multiple different other businesses, DBAs might offer you more flexibility.

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    Why Businesses May Use Dba Names And Dba Accounts

    DBA names, also referred to as fictitious or assumed names, are common for sole proprietors, limited liability companies , partnerships, and corporations. A DBA name can help a business connect to its intended audience by using a name that is more closely aligned with the business’ products or services, rather than using the sole proprietor’s or business entity’s legal name.

    Businesses generally open bank accounts using the business’ name in order to keep business and personal assets separate. In the case of a corporate entity that uses different DBA names for different stores or services under the same corporate umbrella, having a separate bank account for each business’ DBA name can simplify record-keeping and accounting efforts.

    Why Set Up An Llc In South Carolina

    What is an LLC in the first place? It is a type of business that protects you and your assets from issues like debts.

    Tax Credits

    To a newly formed LLC, various tax benefits are provided. Some of the top ones on the list are investment tax credit , research and development tax credit and job tax credit .

    Sales and Use Tax Incentives

    A person has to register their South Carolina LLC for achieving this tax credit. The main benefit of this tax credit is that a person is exempted from those sales and use tax which they have to pay when importing raw material for their manufacturing.

    Incentive Programs for Services Sector

    The main incentive for the manufacturing business is when they create new jobs. On every job they are creating in the state, the Jobs Tax Credits and Investment Tax Credit program will provide an incentive of $1000 to $9000. The basis of incentive is purely the salary that you provide to your employee.

    Pros of LLC

    Cons of LLC

    Cost of Registering a South Carolina LLC

    The costs are pre-decided by the government for those who want to form an LLC in South Dakota. A detailed description of the fees is mentioned below in detail.

    Best Businesses Operating in South Carolina

    Agriculture Businesses
    Automobile Businesses
    Aerospace Businesses

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    Get Business Permits Licenses And Zone Clearance

    North Carolina does not require a general business license by a sole proprietor but depending on the nature of the business activity you may need to acquire a business license to work in a compliant manner. Which state-level license your business will be needing depends upon the services or goods you offer as a sole proprietor. The license and permit section of the North Carolina State Government website provides comprehensive information regarding the occupation or profession that requires a state license.

    Additionally, local regulations such as building permit, license, zone clearance etc may apply to your business. You need to check the license requirements of the county in which you intend to operate as a sole proprietor.

    Moreover, a sole proprietor with the taxable sales greater than $10,000 must obtain a standard business license from the local county clerk. In case your sales are less than $10,000. You may still need to get a minimal activity license from the local county office.

    North Carolina Department of Revenue website, Registration, and Licensing section provides in-depth information on such licenses.

    Dont Want To Form An Llc By Yourself

    From Sole Proprietorship to LLC in 10 Simple Steps! (Legally)

    Let IncFile or IncAuthority guide you through the LLC formation process, so you know everything was done right. Only pay state fees!

    Quick Reference

    The Limited Liability Company is a popular business entity choice structure for many businesses starting in South Carolina. The LLC provides personal liability protection and has the potential to save money on taxes. With a little research, you can learn how to form an LLC in South Carolina without an attorney.

    Unlike a sole proprietorship or partnership where the small business owner can be personally liable for lawsuits against the business, the LLC is a separate legal structure, protecting the business owners personal assets.

    Besides the liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration, and management flexibility.

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    Get Your Business Started With Corpnets Help

    Whether you decide that a Sole Proprietorship or another business entity type is right for you, you can count on CorpNet to help you get your company up and running. Our filing experts are standing by to prepare and submit your online formsno matter where you are in the United Statesquickly and accurately. File a DBA, apply for business licenses and permits, register for payroll taxes, and more.

    Contact us today to talk with one of our experienced team members and get started!

    If You Have Big Dreams You’ve Come To The Right Place

    EDPNC Small Business Advisors is a free service for anyone seeking to start a small business in North Carolina.

    Working in partnership with the N.C. Department of Commerce, we offer one-on-one phone consultations to people interested in starting a business, small business owners in need of general support, and entrepreneurs interested in moving to North Carolina. Were here to answer your questions, and help you navigate topics like regulatory requirements, licensing stipulations, small-business training and more.

    Get in touch with a small business advisorSmall business advisors are available Monday through Friday, 8:30 a.m. to 4 p.m. If youre submitting a request online, please allow 1-3 days for our team to respond to your request.Se Habla Español

    Re-register your business name before someone else does!Did you register a business name with your County Register of Deeds before Dec. 1, 2017? If so, youll want to listen in on this recorded webinar that reviews new laws for Doing Business As or Assumed Names.

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    Plan Your South Carolina Business

    Successful businesses are built through careful planning. Before committing a significant amount of money and other resources toward your business in South Carolina, critically analyze your idea, and create a game plan. At a minimum, you should complete the following:

    Name Your Business

    What will you name your business? When naming a business, you’ll want to choose an available name that follows South Carolinas naming rules for an LLC or corporation and resonates with your customers. Use our Business Name Generator to find the perfect brand name and website.

    Before you reserve your business name, make sure your domain is available.

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    Find a Business Location

    Do you know where your business will be located? Whether youre opening a brick-and-mortar establishment or starting a business from home your business location informs the type of licensing and permits youll need as well as your businesss growth potential. Doing your research on South Carolinas popular areas such as Charleston or Myrtle Beach can help increase foot traffic and drive customer interest.

    Conduct Market Research

    Have you gotten to know your market? Before you write your business plan, conducting thorough market research is crucial. This can involve conducting surveys, doing search engine optimization research, or holding focus groups. The goal of market research is to better understand your target market and competitors in order to craft an effective business plan.

    When Should A Sole Proprietorship Become An Llc

    Active Trade or Business Income Reduced Rate Computation

    It is time to go from a sole proprietorship to an LLC when you are serious about growing your business and earning a profit.

    Sole proprietorships are only good for very low-profit/low-risk businesses.

    Example: A sole proprietorship is a good way to start out if you are doing business on a small scale or want to try out a low-risk venture to see how successful it will be.

    Forming an LLC allows business owners to grow their businesses and take on risk. This is because LLCs provide personal liability protection.

    What is personal liability protection? When a business owner has personal liability protection, they cant be held personally responsible if the business suffers a loss. This means personal assets are protected.

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    Acquire Federal And State Tax Ids

    Now you should obtain a Federal Employer Identification Number , which is like a social security number for a business and allows you to open bank accounts, handle payroll, and file taxes.

    For sole proprietorships, an EIN is optional, although it is required for corporations and LLCs. You can apply online for your EIN through the IRS website, or fill out and mail this form.

    Each state has its own laws and taxes regarding businesses.Visit the South Carolina Department of Revenue, Taxes & Insurance portal to learn about applicable state-administered business taxes, and register an account to file taxes online.

    Costs To Start An Llc In South Carolina

    To form a Limited Liability Company in South Carolina, file the Articles of Organization with the South Carolina Secretary of State. The LLC filing fee is $125 when filing online and $110 when filing by mail.

    Approval for the LLC is typically around 1-2 business days when filing online and less than 2 weeks when filing by mail.

    Quick Reference

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    Write A Business Plan

    Once a solid business idea is in place, its time to start working on the business plan.

    Many people only consider writing a business plan because the bank asks for one in order to get funding. While thats a valid reason, more importantly, writing a business plan gets the ideas out of the entrepreneurs head and helps create a roadmap for where they want the business to go. Just as most builders wouldnt build a house without blueprints, an entrepreneur shouldnt build a business without a business plan.

    The thought of writing a business plan is overwhelming, so here are some resources to help in getting started.

    Select An Appropriate Business Name

    Becoming a OWNER OPERATOR? setting up your LLC & EIN OTR trucking industry New authority CDL

    A sole proprietor in North Carolina can use his/her own given name or may opt for a trade or assumed business name. However, a tradename sounds more professional than the owners personal name. DBA name plays a pivotal part if you prefer to choose an assumed business name.

    The state law requires the DBA must be distinguishable from the companies/businesses that are already on record.

    Tidbit

    Check the following government databases to make sure your fictitious or DBA name has not been trademarked already.

    • North Carolina Secretary of State
    • The United States Patent and Trademark Office

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    Open An Llc Bank Account

    Opening a bank account for your LLC is important for liability protection as the account separates the businesss funds from the members personal funds.

    Several documents will be needed to open a business bank account, such as:

    • A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
    • Copies of the original LLC formation paperwork from the state showing the creation of the LLC.
    • Drivers licenses of the members.
    • Depending on the age of the LLC, a South Carolina Certificate of Good Standing may be needed to prove the LLC is active and in good standing with the state.

    Related: How to Open a Business Bank Account for your LLC

    Here Are The Three Main Things You Need To Know:

    Tax Responsibilities

    Because theres no distinction between the owner and the business itself, sole proprietors dont need to file business tax returns they instead simply claim any business profits or losses on their personal tax returns.

    Contracts

    Sole proprietors are allowed to sign contracts using their personal name, and along those same lines, customers can write checks to the business by using the sole proprietors name.

    More Flexible

    The other big difference between sole proprietorships and more formal business structures is the fact that sole proprietors are allowed to commingle business and personal assets as much as they want to. With LLCs and corporations, ownership is required to keep their assets separate from those of the company. The downside of this aspect for sole proprietors is that if your business is sued, creditors are free to pursue your personal assets like your house, car, personal bank accounts, etc. For corporations and LLCs, creditors are limited to your business assets.

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    Whats The Difference Between A Corporation Llc Sole Proprietorship And Dba

    A corporation is a separate entity from its owners and includes shareholders, directors, officers and employees. The corporation structure is best for large businesses that wish to invest profits back into the company, seek venture capital funding or go public.

    An LLC is often used by small businesses and limits the personal liability of the owners.

    The sole proprietorship structure is used by self-employed individuals and also acts as the default structure for any business that has not yet declared otherwise. Unlike an LLC, the personal assets of a sole proprietorship can be held liable in the event of financial trouble.

    A DBA is a way for sole proprietors to operate a business under a different name without having to create a formal legal entity.

    Choose A Business Structure

    How to Become a Sole Proprietor

    First, you need to choose the best business structure for your new venture. This is the first step because different business structures have different naming rules.

    Business Structure refers to the way your business is set up, operated, and taxed. Each business structure has its own set of unique naming rules.

    There are two categories of business structures:

    • Formal Business Structures

    To find the business structure that’s best for you, read our What Structure Should I Choose for my Business article.

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    Starting A Business In York County

    In York County, we welcome small business and understand the important role they play in our local economy. Below are answers to commonly asked questions and links to the many resources available within York County which enable innovative and productive businesses of all sizes to grow and remain sustainable.

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