The South Carolina limited liability company (LLC) operating agreement is a legal document that outlines how the company will be operated on a day-to-day basis and regulates the status of each member of the company.
The LLC operating agreement, or business operating agreement, records the initial investment of each company member and defines their rights and interests based on that initial investment.
Also, if the members decide to manage the company personally, the operating agreement will define their managerial rights and duties.
Is an Operating Agreement Required in South Carolina?
No, the operating agreement is not a required document when registering a company in South Carolina. However, many parties still decide to draft the operating agreement and optimize the business procedures inside their company.
4 Main Types of Operating Agreements
This section presents the four most commonly used operating agreement types in South Carolina:
Types of Operating Agreements
Single-member LLC operating agreement: This type is used for companies with only one member. It is useful for defining the identity of the company and differentiating it from the identity of the member as an individual.
Multi-member LLC operating agreement: Used in companies with two or more members. It defines the rights and duties of each member and their interests in the company.
Member-managed LLC operating agreement: This type of operating agreement is used when members decide to personally manage the company. The document then defines the managerial duties of each member.
Manager-managed LLC operating agreement: Here, the members have decided to delegate their decision-making powers to a professional manager, and the operating agreement defines the rights and duties of a manager.
Laws and Legal Requirements for LLC Operating Agreements in South Carolina
Title 33, Chapter 44 of the South Carolina Code of Laws, also called the Uniform Limited Liability Company Act of 1996, is a document that regulates the status of LLCs in South Carolina.
Moreover, Section 33-44-103 regulates the status of operating agreements in the state.
Section 33-44-101(13) provides the definition of the operating agreement as follows:
“‘Operating agreement’ means the agreement under Section 33-44-103 concerning the relations among the members, managers, and limited liability company. The term includes amendments to the agreement.”
How to Form a Limited Liability Company (LLC) in South Carolina
Here, you can see the step-by-step process for establishing an LLC in South Carolina.
How to Form a LLC in South Carolina
#1. Choose a Business Name For Your LLC
First, you should choose a business name for your company. The name must be distinguishable from other business names registered in South Carolina. Otherwise, your application might be rejected.
To make sure your business name is distinguishable, you should check the Secretary of State database and do a business name search.
#2. Choose the Type of LLC
Here, you have two options:
Domestic LLCs: Companies that are both established and registered in South Carolina.
Foreign LLCs: Companies that are established elsewhere but are registered in South Carolina due to their business expansion.
#3. Nominate an Agent
You should nominate a person who will receive official notifications and documents on behalf of the LLC.
The registered agent can be:
An individual with a registered address in South Carolina
Entity with the authority to operate in South Carolina.
#4. File the Registration Documents
#5. Pay the Required Fee
The application fee for both domestic and foreign LLCs is $110. If you are applying online, you will be given the option to pay using your credit or debit card.
If you are applying via mail, you should fill out a check, attach it to the documents, and send it to the following address:
South Carolina Secretary of State’s Office, Attn: Corporate Filings, 1205 Pendleton Street, Suite 525, Columbia, SC 29201
#6. Create your LLC Operating Agreement
After registering the company, you should create the operating agreement. It will optimize the business processes in your company and prevent potential misunderstandings between the parties.