South Carolina Business License Basics

Starting a business in South Carolina begins with an idea, but bringing that idea to life requires navigating the state’s registration requirements.

Many new business owners find themselves unsure about which forms to submit or which government offices to contact. To help with the process, this guide simplifies the South Carolina business registration process into clear, actionable steps. We’ll walk you through choosing a business structure, obtaining the necessary licenses, and completing the required paperwork.

Related: Starting A Business In South Carolina Checklist

Step 1: Business Structure

The first step when registering a South Carolina business is to select and form a business structure (also called a business entity). A business structure refers to the form of organization that a particular business takes. Different forms offer varying degrees of asset protection, tax benefits, and compliance responsibilities for business owners.

The most popular legal structures for small businesses are sole proprietorships, general partnerships, corporations, and Limited Liability Companies (LLCs).

Related: Comparison of Business Structures

Sole proprietorship: The easiest and least expensive entity to start, a sole proprietorship requires little paperwork (if any) to get started. You own and operate the business entirely and keep all profits after expenses are paid. However, a significant drawback is that the owner faces unlimited personal liability for any debts or legal issues the business might incur.

Related: How to Start a Sole Proprietorship in South Carolina

General partnership: Similar to a sole proprietorship, a general partnership is when two or more individuals co-own a business. General partnerships are relatively easy to establish, but partners face unlimited liability and potential disagreements over business decisions.

Corporation: A corporation is a separate legal entity owned by shareholders, providing them with limited liability protection. Corporations have more complex requirements such as annual report filings, board of director meetings, appointing a South Carolina registered agent, and issuing shares of stock. However, they offer benefits like limited liability, more avenues to raise capital, and increased credibility.

Related: How to Form a South Carolina Corporation

Limited Liability Company (LLC): An LLC combines the limited liability of a corporation with the tax benefits and flexibility of a sole proprietorship and partnership. Owners, known as members, are protected from personal liability for business debts, while profits and losses can be passed through to their personal income tax returns. LLCs have fewer corporate formalities compared to corporations, but even though the setup process is easier, it is more complex than a sole proprietorship or general partnership.

Related: How to Form a South Carolina LLC

Step 2: Business Name

After selecting a business structure, many entrepreneurs in South Carolina move on to choosing and registering their business name.

It’s most common for sole proprietorships and partnerships in South Carolina to operate under a business name different from the full name of the owner(s) and register for a South Carolina 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.

For example, Marilyn Johnson decides to open a bakery in Charleston, South Carolina. Instead of operating under her legal name (Marilyn Johnson), she wants to call her business “Palmetto Pastries.” As a sole proprietor using a name other than hers, Marilyn must register this Assumed Name with the Charleston County Clerk’s Office to file her Assumed Name registration.

For corporations and Limited Liability Companies (LLCs), the process differs slightly. These entities typically don’t need to register a DBA, as they receive a unique entity name during formation. However, if they wish to operate under an additional name, they may also register an Assumed Name.

Regardless of the business structure, the name has to be unique. To check name availability, do a South Carolina business name search through the South Carolina Secretary of State.

Step 3: Federal Employer Identification Number 

For many businesses, the next step is obtaining a Federal Employer Identification Number (FEIN), also known as an Employer Identification Number (EIN). This nine-digit number, issued by the Internal Revenue Service (IRS), serves as a unique identifier for your business.

You need an EIN if:

• Your business has employees
• Your business is structured as a corporation, partnership, or multi-member LLC

Sole proprietorships and single-member LLCs without employees can use the owner’s Social Security number for tax purposes. However, these businesses may still choose to obtain an EIN to avoid using personal identification numbers on any business documents.

Obtaining an EIN is straightforward and free. The quickest method is to apply online through the IRS website, which typically takes just a few minutes to complete. For those who prefer alternative methods, applications can be submitted by mail or fax using Form SS-4, though these options require more time to process.

How to Apply for a FEIN

Step 4: Professional & Industry Licensing

Many professions in South Carolina require registration and licensing before legally being able to offer services in the state. The South Carolina Department of Labor, Licensing, and Regulation oversees these licenses. Some professions that require licensing include:

• Barbers
• Massage therapists
• Landscapers
• Real estate agents
• Accountants
• Nurses
• Engineers

Each profession has its own licensing board within the Department, with specific requirements, fees, and application processes.

Beyond professional licenses, numerous industries require specific licenses or permits. These include:

• Food establishments
• Daycares
• Salvage yards
• Liquor stores
• Construction companies

Visit the South Carolina Department of Labor, Licensing, and Regulation website for detailed information on licensing requirements, fees, and application procedures for both professional and industry-specific licenses.

Step 5: State Business Tax Registration

The South Carolina Tax Registration Application is a unified form that allows businesses to register for various state taxes with the South Carolina Department of Revenue. This application covers:

• Retail License (Sales Tax): Required for businesses selling goods or certain services.
• Artist and Craftsman’s License: For artists and craftspeople selling their work.
• Use Tax: For companies purchasing goods from out-of-state for use in South Carolina.
• Withholding Tax: Required for South Carolina employers withholding taxes from employee wages.
• Corporate Income Tax: Applicable to corporations conducting business in South Carolina.
• Admissions Tax: For businesses charging entry fees to entertainment venues or events.
• Accommodations Tax: Relevant for hotels, motels, and other lodging providers.
• Motor Fuel Tax: This applies to businesses involved in selling or distributing motor fuel.
• Tobacco Tax: For businesses selling tobacco products.

The application process is handled through the South Carolina Department of Revenue. Businesses can complete this registration online through the state’s MyDORWAY website or by mailing in Form SCDOR-111.

Step 6: Resale Certificate

A South Carolina Resale Certificate is a registration for businesses that purchase inventory for resale. This certificate allows these businesses to buy goods without paying sales tax at the time of purchase. Instead, they collect sales tax from the end customer when the product is sold and send it to the Department of Revenue.

Who needs a Resale Certificate:

• Retailers
• Wholesalers
• Manufacturers who resell finished products

Businesses can obtain a resale certificate by registering for a Retail License through the South Carolina Tax Registration Application. Once approved, the business can use its Retail License number as its Resale Certificate number when making qualifying purchases from its suppliers.

Step 7: Local Business Licenses

South Carolina has no statewide business license requirement, but many local areas may require registration. These licenses are typically issued by the city or county’s Business License Department or Revenue Services Division. A few common types of local business licensees include:

• General Business License: This license is required for most businesses operating within city limits and is often based on the type of business and its gross income. For example, the City of Columbia requires all businesses within city limits to obtain a general business license from their Business License Division.
• Retail License: Businesses selling goods directly to consumers often need a local retail license, which allows them to conduct retail sales within the city. The City of Charleston, for instance, requires retail businesses to obtain a license from their Business Services Division.
• Contractor License: Construction and renovation businesses frequently need local contractor licenses to operate legally within a municipality. As an example, the City of Greenville mandates that contractors obtain a license from their Business License Office before performing work in the city.
• Restaurant License: Food service establishments typically require a local restaurant license, which ensures compliance with health and safety regulations. The City of Myrtle Beach, for instance, requires restaurants to obtain a license from their Finance Department.

Step 8: Local Building & Zoning Permits

Before finalizing the purchase or lease of a property for your business, it’s important to understand and comply with local building and zoning regulations. These requirements ensure that your business operates in an appropriate location and meets safety standards. Here are some key aspects to consider:

Zoning Regulations: Zoning laws dictate how property in specific areas can be used. They determine whether a location is suitable for residential, commercial, or industrial purposes. Check with your local planning or zoning department to confirm that your intended business activity is permitted at your chosen location.

Home-Based Businesses: If you’re planning to run a business from your home, be aware that some areas have specific regulations for home-based businesses. These may include restrictions on signage, customer traffic, or the types of businesses allowed in residential areas. Check with your local zoning department for details.

Building Permits: If you plan to construct a new building or make significant alterations to an existing structure, you’ll likely need a building permit. This ensures that all construction work meets local building codes and safety standards. Building permits are typically obtained from the local building department or permitting office.

Certificate of Occupancy: Many municipalities require a certificate of occupancy before a business can operate in a building. This document certifies that the building complies with all building codes and zoning laws and is safe for occupancy.

Signage Permits: Many localities have rules about business signage, including size, placement, and lighting. You may need to obtain a permit before installing any exterior signs for your business.

By addressing these building and zoning requirements early in your business planning process, you can avoid potential delays or complications when setting up your business location. Always consult with your local government offices for the most accurate and up-to-date information specific to your area.