South Carolina Foreign Qualification
With many business opportunities, South Carolina is a natural place for companies to want to expand into. But before you start transacting business here, it’s important that you go through the process of foreign qualification. There are several steps to follow, and understanding the basics of the process is important for any business owner.
What is Foreign Qualification?
Foreign qualification is a process wherein a business registers to do business in a state other than the one it was formed in. Since each state has its own laws regarding businesses, a company must register with each one in order to maintain full compliance. Foreign qualification allows your business to operate without worry.
Why Does A Company Need Foreign Qualification?
Why You Need To Do It – If a company will have any kind of physical presence in South Carolina but was formed in another state, it will have to take steps to foreign qualify before you legally start operations within South Carolina.
When Should You Do It? – The sooner, the better. Once you decide that you’re going to branch out into South Carolina, you should start the process to avoid potential problems with delays or speed bumps on the way to full foreign qualification and compliance. Generally, you will need to receive South Carolina foreign qualification if your company falls under any of the following criteria:
- Has a physical presence in South Carolina
- Buying a property there
- Have remote employees
- Accepts orders in South Carolina
- Owns a bank account in South Carolina
What Happens If Your Entity Does Not Foreign Qualify?
Failure to foreign qualify means that your business is unable to bring forth any legal action within the state. You may also face fines and penalties, including civil fines and tax related fines ranging from back taxes to penalties related to your operations without compliance. South Carolina may also stop you from continuing business operations until you become compliant.
Steps To Obtain Foreign Qualification
There are several steps that a business has to take in order to receive South Carolina foreign qualification. These include the following.
1. Obtain Certificates – You will need to obtain an original Certificate of Existence or its equivalent from your home state. Additionally, you must file an Application for a Certificate of Authority. This form is available for download on the Secretary of State’s website. Corporations will also have to submit an Initial Annual Report form.
2. Collect And Submit Information – The forms will request a variety of basic information about your business.
- LLC name registered in the home state
- Name of the home state
- Principal office street address
- The street address of the designated office in South Carolina
- Name and address of the registered agent in South Carolina
- Duration of the LLC
- The management structure
- Names and addresses of managers if the LLC is manager-managed
- Indication if one or more members are liable for the company’s obligations
- An authorized signature
- Corporation name
- Name of the home state
- The original date you formed the corporation
- Duration of the corporation
- Principal office address
- Address of proposed registered office in South Carolina
- Name and address of the registered agent
- Name and business addresses of directors and officers
- The aggregate number of shares the corporation has authority to issue, itemized by class and series
- An authorized signature
3. Appoint Registered Agent – Your registered agent is the person who will handle the majority of the foreign qualification process as well as maintaining full compliance. Most businesses elect to use a third party provider like DoMyLLC to handle this for them in order to simplify their daily activities.
4. File The Application – Once you finish filling out the paperwork, file two copies of it with the Secretary of State along with a filing fee of $110 for both a Corporation and an LLC. Corporations will also have to file an initial annual report with a $25 filing fee.
5. Ongoing Maintenance – Businesses in South Carolina must stay current on all of their taxes. Unlike some other states, there is no fee or any annual report requirements. As long as all taxes are paid and current, the business will be compliant.
What Is the Difference Between Foreign Qualification And Incorporating?
Incorporating actually modifies your business structure. Foreign qualification leaves your business structure completely unchanged but allows you to operate in a state other than the one your company was formed in.
How DoMyLLC Can Assist With Streamlining The Process
Business leaders have a lot to worry about on a daily basis. We do all of the work involved in South Carolina foreign qualification so you have more time to focus on other aspects of your business. We provide:
- Name availability checks
- Full filing and registration
- Dedicated account managers
- Ongoing, unlimited customer support
If you’re planning on starting operations in South Carolina, contact us to ensure that you get foreign qualified quickly and easily.
South Carolina Foreign Qualification FAQs
A certificate of existence or the equivalent in your home state along with an Application for a Certificate of Authority.
South Carolina charges a filing fee of $110 for both a Corporation and an LLC. Corporations will also have to file an initial annual report with a $25 filing fee.
Any business that exists outside of South Carolina that wishes to start business operations within the state.
No, but it’s always a good idea to discuss your plans with your legal team to ensure that you go about things properly.
Basic business information including:
- Name of business
- Business address
- Mailing address
- Names of members or managers
- Registered agent information
You will have to file under a fictitious name and operate under it. This won’t impact your name in any other state, however.
South Carolina Business Resources:
South Carolina Office of Secretary of State
South Carolina Secretary of State
1205 Pendleton Street, Ste. 525
Columbia, SC 29201