How To Search South Carolina Business Entities

Sole proprietorships are generally considered a simple and informal business structure. These types of businesses are typically inexpensive to form and are usually owned and operated by a single owner, which may be an individual or marital community. The entity’s owner is personally liable for all the business’s debts and may report its profits and losses on their personal income tax returns.

General partnerships usually require an agreement between two or more individuals or entities (referred to as general partners) to jointly own and operate the business. The partners typically share managerial duties, profits, and losses, and each partner is considered personally liable for the business’s debts. Short-term partnerships in South Carolina are sometimes referred to as joint ventures.

Corporations are a somewhat more complex business structure that are also relatively more expensive to form than most other business structures. A corporation is generally considered a legal entity that is separate from its owners (who are the entity’s shareholders). Profits from a corporation are subject to income tax at the corporate level and also after being distributed to shareholders. However, these shareholders are usually not personally liable for the corporation’s debts and obligations.

S corporations are a type of corporation that qualifies for “S” status with the IRS, allowing them to be taxed like partnerships. This means that the entity itself is not taxed, and its income flows to its shareholders who then report it on their personal returns.

These are corporations that are formed solely to provide a professional service. Note that each of the entity’s shareholders must be licensed to provide this service. This type of business structure is usually only available to certain professionals and has the advantage of providing its shareholders with limited personal liability.

These are corporations formed for civic, educational, charitable, and religious purposes. Non-profit corporations typically have income tax-exempt status, and their members usually also have limited personal liability for their obligations. Non-profit corporations in South Carolina generally have to be managed by a board of directors or trustees, and the entity’s assets must be transferred to another non-profit group if it is dissolved.

Limited liability companies combine the tax advantage of sole proprietorships and partnerships with the limited personal liability feature of corporations and are generally considered the preferable business structure for small businesses. The owners of an LLC are generally referred to as “members.”

LLCs in South Carolina typically have to indicate whether they will be member-managed (all members actively participate in making decisions and running the business) or manager-managed (designated members or non-members are responsible for making decisions and running the business). LLCs in the state are also usually dissolved automatically upon the death of any of the entity’s members. However, this automatic dissolution may be circumvented if the entity’s membership agreement states that “the LLC should not be dissolved upon the death of any member.”

These are partnerships where at least one general partner is fully responsible for the entity’s operations and partnership obligations, while at least one other partner, referred to as a “limited partner” takes a back seat from the entity’s everyday operations. This limited partner is usually liable for the partnership's obligations only to the amount of their investment or involvement in the entity’s operations.

The LLP business structure is usually formed to provide individual partners in a partnership with personal liability protection for the negligent acts of other partners or employees who are not under their direct control. However, this option may not be available for all types of businesses, similar to the professional service corporation structure.