How to Dissolve an LLC in South Carolina

Dissolving a business often involves complex procedures. However, for a limited liability company in South Carolina, dissolving it takes a handful of paperwork. When an LLC is formed in South Carolina, the owner(s) draft the operating agreement. If the owner(s) decide to dissolve the business, the dissolution takes place following the articles mentioned in the operating agreement.

In this article, LLCBuddy editors shared the ins and outs of dissolving an LLC in South Carolina. LLCs must file the Articles of Dissolution with the South Carolina Secretary of State like the formation certificate was filed at the time of forming an LLC in South Carolina. It takes a few days to process and a handful of fees to be paid to the SOS. Many people hire a professional service to do the paperwork to process it hassle-free.

How to Dissolve an LLC in South Carolina

At the time of forming an LLC, an operating agreement draft must be written. Generally, the process of dissolution takes place following the operating agreement (read: South Carolina LLC operating agreement). Before the dissolution process, there are a few things to consider in the LLC.

First, make sure all the members of the LLC agree to dissolve the business. Once all the members are ready, their consent should be recorded via voting. After casting their vote in favor of the dissolution, the legal process must be started.

Dissolution of South Carolina LLC requires three broad procedural steps. Having a South Carolina LLC Operating Agreement, closing all the tax accounts, and finally submitting the Articles of Dissolution form to the South Carolina Secretary of State.

Step 1: Follow the LLC Operating Agreement in South Carolina

When you have started an LLC as a business entity, then there is an operating agreement that is formed. There are complete details of how the company will function and grow in that operating agreement, which acts as a comprehensive guide. There is also a dissolution process, which is added to your agreement. The common dissolution steps that almost every LLC follows are:-

First of all, the dissolution vote will take place among the LLC members in the dissolution meeting. If the majority is with the YES, then the process goes into legal proceedings.

All the dissolution votes will be noted down and recorded with the minutes of the meeting or a consent form.
After that, a formal date for dissolving the LLC will be decided.
The next step is counting the LLC assets and dividing them among the stakeholders and members accordingly.
Finally, the creditors of the business are notified, and the debts of the business are settled.

This is a general process. However, it is strongly recommended to seek professional help to avoid any complications when it comes to terminating an LLC in South Carolina.

Get a Professional Agent Service

When it comes to a limited liability company dissolution, it is important to get professional help. South Carolina registered agent will guide you with everything you need to close your limited liability company. While choosing a registered agent make sure they have a physical street address in the state. A professional service provider helps you to file the Article of Dissolution and close your various tax accounts without any hassle. Below are the best LLC services in South Carolina that we strongly recommend for you.

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Step 2: Close All Tax Accounts

Every action that an official business takes is legally bound to some minimum business taxes. For that, various accounts, especially business entity tax accounts, are maintained by the state government with the help of various departments. You should consider all the taxes that you have paid for your LLC’s duration and make a list of them.

You must contact all government entities and clear the amount of outstanding taxes due by the date you have decided to dissolve. All the taxes must be paid in advance so that you don’t face any issues in the process of shutting down your LLC.

Some of the common taxes that limited liability companies have to pay are:

Unemployment insurance tax
Employee withholding tax if your LLC has employees.
If your LLC is engaged in selling taxable goods then they are liable to pay the sales and use tax.

Most of these taxes are normally filed, but some departments require official paperwork, without which it is impossible for the business to close their accounts. Apart from business taxes, federal taxes, personal income taxes, and franchise taxes are to be considered. For the franchise taxes, a franchise tax form is required. That is why the LLC owner should go through the sales tax guide and hire an accounting service.

Tax clearance

While dissolving the South Carolina LLC, the owner is not required to obtain a tax clearance certificate. However, if you have filed federal taxes, then you must go through the final return option on your IRS form.

The IRS form for the LLCs that are classified as partnerships is Form 1065, and those LLCs who have registered themselves as corporate should check IRS Form 1120.

BOI Reporting

If you’re going to dissolve your LLC this year, make sure to update your BOI reporting. From January 1, 2024, the Financial Crimes Enforcement Network (FinCEN) implied a rule to all businesses, including LLCs in South Carolina to file the BOI Report. The Beneficial Ownership Information (BOI) in South Carolina is a report that states about in and out of the company. This report must be up-to-date and submitted to the FinCEN before you proceed to the dissolution.

Step 3: File Articles of Dissolution

There is a list of dissolution documents that you, as an LLC owner, have to file. Once these articles are filed, the legal existence of the LLC will be over. Like a South Carolina Articles of Organization, one has to file South Carolina LLC Articles of Organization. The dissolution procedure and filing the articles of dissolution form is very easy and is discussed below.

First of all, the LLC owner(s) has to file the Article of Dissolution. There are multiple methods of filing available, such as filing by mail, in-person drop, or/and online filing.
You can follow the filing instructions on the official portal so that the steps for dissolution will be easier to complete.
For offline filing, LLCs must download the form and submit it to the South Carolina Secretary of State physical office along with the state filing fee.
If you want to dissolve South Carolina Foreign LLC then look for the Foreign LLC Dissolution process.
You must fill in all the important and legal information in the form, so you should be extra careful.
After filling in all the important information, you must choose the mode of payment you want to use to pay the LLC dissolution filing fees.
After filling in every detail, one should submit the form through an official mail address and make a payment.

Filing	Forms and Details
Online Applications	Sign in to SOS
Offline Applications	LLC Articles of Termination
SOS Contact (if offline application is available)	South Carolina Secretary of State’s Office, Attn: Corporate Fillings, 1205 Pendleton Street, Suite 525, Columbia, SC 29201
Filing Time	Within 2 working days
Filing Fee	$10

The LLC you own is dissolved, and you are free from all the liabilities linked with the LLC and its taxes. A copy of both original articles and recorded articles should be submitted in front of the probate judge. Now it’s his call whether he accepts your expedited dissolutions or not.

Points to Be Noted When Dissolving an LLC in South Carolina

Apart from these three steps, no major dissolution rules are there in South Carolina. However, there are some other tasks one has to keep in mind while dissolving an LLC legally.

Winding Up

Some purposes of LLC require some attention even after dissolution, known as winding up. The task of winding up includes.

For a certain period, the property of a business requires preservation.
If there is any civil case against the LLC, then the owner needs to finish them.
Settle all the existing disputes of LLC.
Transfer all the property of the LLC to the names of partners.
Release all the liabilities that the LLC owes to others.
Rightful distribution of all the assets among members, according to their percentage of partnerships.

Cost of Dissolving LLC

LLC costs in South Carolina include the formation as well as dissolution fees. To dissolve an LLC in South Carolina, LLCs have to file an Article of Dissolution. The filing fee is $10. The details are mentioned in the articles of dissolution filing form. Following are the ways to pay for the dissolution,

You can select a payment pick-up option.
There is an option for direct account transfer through your prepaid accounts.
LLC owners can also use their Credit cards, providing their complete details and types. Along with that, an original signature is required to authorize the transaction the state will make.

After Dissolving Your LLC

After you dissolve an LLC in South Carolina, you can reinstate or revive the same within a given time. In South Carolina, the LLC name will be available up to 120 days. After this, the name will be available to other LLCs. Besides, you might revive or reinstate the LLC in South Carolina if that is available. According to the South Carolina SOS, you can revive your LLC within 2 years.

Reasons Behind Dissolving an LLC in South Carolina

People always think they can leave the company without any notice and there will be no issue. But if you have an LLC that you created with a legal obligation, it needs to be ended that way. Yes, if someone will dissolve an LLC in South Carolina, they will have to do it while taking care of the government. For dissolving the company, there is always a reason. The reason can be voluntary or involuntary too. Let’s get to know about the involuntary reasons,

If the company was caught doing illegal business.
If the company’s member died due to some reason or went bankrupt.
The dissolution will be mandatory if the assets of the business are used unwisely.
If the time being of the company was already determined in the will, then the company will go into dissolution at that time.

Top Businesses in South Carolina

With the population of 5,266,343, South Carolina is one of the favorable places to start an LLC. According to several reports, starting an LLC for Financial services can be profitable as various places in the state showed steady growth in this business over the past few years. On the other side, based on the city or region you’re going to start your LLC, you can decide the type of business to start. Following are the top 5 businesses you can start in South Carolina.

Financial services
Car rentals
Fitness
Poultry Farming
Education and health services

South Carolina LLC Dissolution Review – A Quick Recap

Here’s a recap of the steps you must follow when dissolving your South Carolina LLC. Click on the steps in this list if you want to read the full details.

Follow Your South Carolina LLC Operating Agreement: Remember that when you started, you created an operating agreement. Use this agreement as a guide in proceeding with the dissolution of your LLC.
Close All Tax Accounts: Make sure you close all your tax accounts to avoid incurring further costs.
File Articles of Organization: File the article of dissolution to make it known to the state where your LLC operates that you are indeed no longer in business.

FAQs

What is the process for dissolving an LLC in South Carolina?

The process for dissolving an LLC in South Carolina involves filing the appropriate paperwork with the South Carolina Secretary of State.

Are there any specific requirements for dissolving an LLC in South Carolina?

Yes, in South Carolina, the LLC must be in good standing with the state and all necessary taxes must be paid before dissolving.

How long does it take to dissolve an LLC in South Carolina?

The time it takes to dissolve an LLC in South Carolina can vary, but typically it can take a few weeks to a few months.

Do I need to notify creditors when dissolving an LLC in South Carolina?

Yes, as part of the dissolution process in South Carolina, you should notify all creditors of the LLC.

Can I reinstate my LLC after it has been dissolved in South Carolina?

Yes, you can reinstate your LLC in South Carolina within a certain timeframe after it has been dissolved by filing the necessary paperwork and paying any required fees.

What forms do I need to fill out to dissolve an LLC in South Carolina?

To dissolve an LLC in South Carolina, you will need to fill out the Articles of Dissolution form provided by the South Carolina Secretary of State.

Is there a fee for dissolving an LLC in South Carolina?

Yes, there is a filing fee required to dissolve an LLC in South Carolina, and the amount may vary depending on the specific circumstances.

Can I dissolve my LLC online in South Carolina?

Yes, you can file for dissolution of your LLC online through the South Carolina Secretary of State website.

Are there any tax implications of dissolving an LLC in South Carolina?

Yes, there may be tax implications when dissolving an LLC in South Carolina, so it is advised to consult with a tax professional or accountant.

What happens to the assets of an LLC when it is dissolved in South Carolina?

Once an LLC is dissolved in South Carolina, the assets of the LLC will be distributed among the members according to the operating agreement or state law.

Can I dissolve my LLC in South Carolina if it is still active and operating?

Yes, you can dissolve an active LLC in South Carolina by following the necessary steps and filing the appropriate paperwork.

Will dissolving my LLC in South Carolina affect my personal liability protection?

Dissolving an LLC in South Carolina does not automatically remove personal liability protection, but it is recommended to consult with a legal professional to ensure proper steps are taken.

Do I need to notify the South Carolina Department of Revenue when dissolving my LLC?

Yes, as part of the dissolution process in South Carolina, you should notify the Department of Revenue to ensure all tax obligations are properly resolved.

Can I dissolve my LLC myself or do I need to hire an attorney in South Carolina?

You can dissolve your LLC yourself in South Carolina by following the required steps and filling out the necessary forms, but it is recommended to consult with an attorney to ensure compliance with state laws.

What happens if I don’t dissolve my LLC in South Carolina properly?

Failing to properly dissolve an LLC in South Carolina can lead to continued tax obligations, legal liability, or other consequences, so it is important to follow the correct procedures.

What is the statutory authority for dissolving an LLC in South Carolina?

The statutory authority for dissolving an LLC in South Carolina is found in the South Carolina LLC Act, which outlines the necessary steps and procedures for dissolution.

Can I dissolve my LLC in South Carolina if it has outstanding debts?

Yes, you can dissolve an LLC in South Carolina even if it has outstanding debts, but you will still be responsible for resolving those debts.

Is there a specific timeframe I need to follow when dissolving an LLC in South Carolina?

In South Carolina, there is no specific timeframe for dissolving an LLC, but it is recommended to complete the process as soon as possible after deciding to dissolve the LLC.

What documents do I need to keep for my records after dissolving my LLC in South Carolina?

After dissolving an LLC in South Carolina, you should keep a copy of the Articles of Dissolution and any other related paperwork for your records.

Can I dissolve my LLC in South Carolina if it is involved in a lawsuit?

Yes, you can dissolve an LLC in South Carolina even if it is involved in a lawsuit, but it is recommended to consult with an attorney to properly handle the legal implications.

What steps do I need to take to notify creditors when dissolving my LLC in South Carolina?

To notify creditors when dissolving an LLC in South Carolina, you should send a written notice to all known creditors and publish a notice in a local newspaper as required by state law.

Can I dissolve my LLC in South Carolina if it has no assets or activity?

Yes, you can dissolve an inactive LLC in South Carolina that has no assets or activity by following the necessary steps and filing the appropriate paperwork with the Secretary of State.

Do I need to cancel my LLC’s licenses and permits when dissolving it in South Carolina?

Yes, when dissolving an LLC in South Carolina, you should cancel all licenses and permits associated with the LLC to ensure compliance with state regulations.

Can I dissolve my LLC in South Carolina if there are disputes among members?

Yes, you can dissolve an LLC in South Carolina even if there are disputes among members, but it is recommended to resolve any conflicts before proceeding with dissolution.

What are the potential consequences of not dissolving my LLC in South Carolina properly?

Not dissolving an LLC properly in South Carolina can lead to ongoing tax obligations, legal liability, or other consequences, so it is important to follow the correct procedures.

Can I dissolve my LLC in South Carolina if it has outstanding tax liabilities?

Yes, you can dissolve an LLC in South Carolina even if it has outstanding tax liabilities, but you will still be responsible for resolving those obligations with the appropriate tax authorities.

Can I dissolve my LLC in South Carolina if it is in bankruptcy?

Yes, you can dissolve an LLC in South Carolina that is in bankruptcy, but it is recommended to consult with a bankruptcy attorney to ensure the process is handled properly.

Are there any annual fees or reporting requirements for dissolved LLCs in South Carolina?

As of the last update, there are no annual fees or reporting requirements for dissolved LLCs in South Carolina, but it is recommended to verify with the South Carolina Secretary of State for any changes.

How do I dissolve an LLC in South Carolina?

To dissolve an LLC in South Carolina, you must file Articles of Dissolution with the South Carolina Secretary of State.

What is the fee to dissolve an LLC in South Carolina?

The fee to dissolve an LLC in South Carolina is $20 for online filings and $25 for paper forms.

In Conclusion

Dissolving a business is not an easy task as a lot of homework is involved with the process. The official process might have only a few steps, however, before and after dissolving the LLC, there might be a lot of other tasks. In this case, it is highly recommended to get a professional service. If you are looking to file an LLC at $0, then ZenBusiness is your answer.

Limited liability companies reduce owners’ personal liability. Having an LLC is quite cost-effective. However, if it is required to close down the business, then the dissolution process should be done legally. This article shared the general steps. Let us know if you have any queries.

How to Dissolve an LLC in South Carolina