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South Carolina Business License Basics

South Carolina Business License Basics

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South Carolina Business License Basics

Starting a small business in South Carolina often means registering with several federal, state, and local agencies. Let’s review common South Carolina business license registrations so your business starts off right.

Related: Guide to starting a business in South Carolina

Setting Up the Business

Before you can apply for business licenses, you should first establish the business structure. This decision impacts your legal responsibilities, taxes, and how much personal liability you might face. Here’s a brief explanation of each type of entity:

Sole proprietorship: This is the simplest form of business structure, where one person owns and runs everything. There’s no separation between the owner and the business, meaning the owner is personally responsible for all debts and legal actions against the business. Taxes are straightforward as the owner reports business income on their personal tax return.

General partnership: Similar to a sole proprietorship, but with two or more people running the business. Partners share profits and losses, and like sole proprietors, they are personally responsible for the business’s debts and legal issues. Partnerships also don’t pay taxes as a separate entity; instead, each partner includes their share of profits or losses in their personal tax filings.

Corporation: A corporation is a more complex entity that is separate from its owners, providing personal liability protection. Owners, known as shareholders, are not personally responsible for the corporation’s debts or legal problems. Corporations can raise money by selling stock and are taxed separately from their owners. This entity requires more requirements, like having board meetings and record-keeping.

Limited Liability Company (LLC): An LLC blends elements of sole proprietorships, partnerships, and corporations. Owners (members) have limited personal liability for business debts and actions. Like sole proprietorships and partnerships, an LLC can pass income directly to owners to avoid double taxation, a common issue with corporations. This structure offers flexibility in management and less strict requirements than a corporation.

What Licenses Do South Carolina Businesses Need?

With the business structure out of the way, we can begin looking at the different types of registrations businesses in South Carolina may need. There isn’t a standard business license, as requirements vary depending on where the business is located and what it does. Here is a general overview of the different registrations your business may need.

Take the guesswork out of figuring out what licenses and permits are required to start your business with license research packages from Bizee and LegalZoom.

For as little as $99, you can save a lot of time and know your business is in compliance with local, state, and federal requirements. 

General Business License

There is no general state of South Carolina business license, however, most cities and some counties require businesses to be licensed to operate. The rules and cost of a business license will vary depending on the city and what the business does.  Below are a few cities that have licensing requirements. 

  • Columbia: The City of Columbia Business License Division issues business licenses to every person engaged or intending to engage in a business, occupation, or profession within city limits.
  • Charleston: All businesses operating within city limits are required to obtain a business license from the Revenue Collections Division for each location. In addition, a zoning permit may be needed for commercial or home-based businesses.
  • Mount Pleasant: The Mount Pleasant Business License Division requires all businesses to register
  • Rock Hill: All businesses operating within the city limits of Rock Hill will need to register for a business license with the Rock Hill Planning & Development Department.  Home-based businesses are also required to register and will need zoning approval.

Every municipality and county (referred to as a taxing jurisdiction) can assess a business license tax based on the gross income or gross receipts of the business entities and individuals doing business within the borders of the taxing jurisdiction.  

Assumed Name Registration

While not a business license, it’s common for sole proprietorships and partnerships in South Carolina to operate under a business name that is different from the full name of the owner(s) to register for an Assumed Name (also known as a Doing Business As or DBA) with the County Clerk’s Office in the county where the business is located.

Building & Zoning Permits

  • Zoning: Zoning permits deal with the use of a property. Zoning laws in South Carolina help organize a town or city by designating specific areas for residential, commercial, industrial, or agricultural use. Before you open a business, you need to make sure the location is zoned for your type of business activity. Zoning permits are typically obtained from the local planning or zoning department.
  • Building Permit: Building permits are official approvals from local government agencies that allow you to start construction or remodeling on a property. In South Carolina, you need a building permit for most construction projects, including new buildings, additions, renovations, and sometimes even for significant repairs. The South Carolina Building Codes Council is responsible for adopting and updating the state’s building codes and permit applications are typically submitted to the local building department or jurisdiction where the project is located.
  • Signage Permit: Businesses in South Carolina must obtain sign permits from their local government before installing external signage. Sign permits ensure that the size, location, and design of the signage comply with local regulations, which may include restrictions on the number of signs, their dimensions, lighting, and materials.

Employer Identification Number (EIN)

Many businesses will register with the Internal Revenue Service (IRS) for an EIN (also referred to as a FEIN, Federal Employer Identification Number, or Federal Tax ID Number). The EIN is the business equivalent of a Social Security Number for an individual. Corporations, Limited Liability Companies, partnerships, and sole proprietorships with employees will all need to register for one. Sole Proprietorships without employees can use the owner’s Social Security Number.

There is no cost for an EIN, and it only takes a few minutes to get.

Learn how to apply for an EIN

Retail License

Businesses selling physical products and certain services in South Carolina will need to register for a South Carolina Retail License from the South Carolina Department of Revenue.

Artists and crafters selling products at arts and craft shows and festivals are also required to get a special retail license from the Department of Revenue. This license is referred to as an Artists and Craftsmen license.

Resale Certificate

Businesses purchasing merchandise to resell will usually want to obtain a South Carolina Resale Certificate in order to keep from paying sales tax for merchandise that is being resold to customers.

Professional License

A variety of professions in the state are regulated and need to be registered before offering certain services.  A few common occupations that require licensing in South Carolina include barbers, massage therapists, landscapers, and many more.   Additional information, fees, and licensing requirements for professions are available from the South Carolina Department of Labor, Licensing, and Regulation.

In addition to professional licenses from the Department of Labor, Licensing and Regulation, businesses in a variety of industries, such as food establishmentsdaycaressalvage yards, and many others, also require licensing.

Next Steps

These are some of the most common business licenses a new business in South Carolina will need to register for. While it’s a good start, there are so many different licenses that may be needed, be sure to double-check with the City Clerk’s Office, Chamber of Commerce, and/or Economic Development office in your area before opening your doors.

Author

  • Greg Bouhl

    With over two decades as an entrepreneur, educator, and business advisor, Greg Bouhl has worked with over 2,000 entrepreneurs to help them start and grow their businesses. Fed up with clients finding and acting on inaccurate and outdated information online, Greg launched StartUp101.com to be a trusted resource for people starting a business.

South Carolina Business License Basics

South Carolina Business License Basics

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