Are you looking to start a nonprofit corporation in South Carolina, but you’re not entirely familiar with how the formation process works?
Forming a nonprofit organization can have some tricky compliance requirements, and you don’t want to risk making any mistakes during this process. In this guide, we’ll discuss all the relevant details of forming a nonprofit corporation in South Carolina.
To get started, please reference our 11-step guide below or hire a professional online incorporation service to get started.
How to Form a South Carolina Nonprofit Corporation (in 11 Steps)
1) Name Your Nonprofit
The first step for forming a nonprofit organization in any state is to come up with a strong name for it. Remember that the name of your nonprofit is often your best opportunity to make a good first impression with people, and you should clearly describe your organization’s mission in your name.
Before you become too attached to one name idea, you should run a Business Name Search on the South Carolina Secretary of State website.. This will tell you if someone else is already using your desired name, or if it’s available for your nonprofit to use.
Get Your Nonprofit URL
To solidify your brand and to fully lean into your nonprofit name, register the URL. Through GoDaddy you can easily register it and build a professional website so that nobody else can use or claim it.
2) Designate an Incorporator and an Initial Board of Directors
The incorporator is the person who is responsible for preparing, signing, and filing your nonprofit’s Articles of Incorporation. This document is the form that officially creates your organization with the state of South Carolina.
At this time, you should also choose your initial board of directors.
In South Carolina, you are required to have at least three people on your initial board.
3) Designate a Registered Agent
South Carolina nonprofit corporations must designate a person or business to receive legal notices on behalf of the company. This important point of contact is known as the registered agent. You will be required to list the registered agent’s name and address when filing the Articles of Incorporation.
Who Can Be My Registered Agent? A registered agent must have a physical address within the state of South Carolina where mail and legal notices can be served during regular business hours. You can hire a service to act as your registered agent, serve as your own registered agent, or even use an accountant or other business professional’s address – with their consent, of course.
The South Carolina Secretary of State says that,
A Registered Agent is the person who is designated and authorized to accept service of process for another person, usually a corporation or other business entity. All corporations, limited liability companies, limited partnerships and limited liability partnerships must file organizing documents with the South Carolina Secretary of State’s Office. These documents are required to include the name of the Registered Agent.”
We recommend hiring a professional registered agent service to act as your registered agent. Doing so will help eliminate junk mail and more importantly, keep your personal and/or corporate or personal address off the public record.
4) File the Articles of Incorporation
The official document required to form your nonprofit corporation with the state of South Carolina is the Articles of Incorporation.
This three-page document includes all of the vital information describing the organizational structure of your nonprofit, including the following information:
- Name of your nonprofit corporation
- Name, address, and signature of consent of your initial registered agent
- Classification of your nonprofit: religious organization, public benefit, or mutual benefit
- Whether or not your corporation will have members
- Address of your principal office
- Description of how assets will be used (especially important if you’ll be applying for tax exemption with the IRS)
- Name, address, and signature of each incorporator
- Name and signature of each director
- Effective date of your organization (if different from filing date)
Once you’ve finished filling out this form, you’ll need to write a check for $25 and mail it along with your Articles of Incorporation to the following address:
South Carolina Secretary of State’s Office
Attn: Corporate Filings
1205 Pendleton Street, Suite 525
Columbia, SC 29201
The South Carolina Secretary of State typically processes nonprofit corporation formations within 1-2 weeks of receiving your articles (faster if filing online). This processing time assumes that all of your information has been filed correctly.
5) Acquire an EIN
According to the IRS, every nonprofit corporation should obtain a federal tax ID number, otherwise known as an employer identification number (EIN).
The EIN enables your nonprofit to hire employees, open business bank accounts, and file for 501(c)(3) tax exempt status. The process to acquire an EIN is quite simple, and includes the preparation and filing of one simple form. Obtaining an EIN is also free.
6) Establish Bylaws and a Conflict of Interest Policy
Think of the bylaws as a governing document for how your nonprofit corporation will be operated. Bylaws outline procedures for things like holding meetings, outlining your membership structure, defining your corporate purpose, describing the responsibilities of your board of directors, and other important details.
A conflict of interest arises when a contributor to your nonprofit has personal interests that compete with those of your corporation.
The conflict of interest policy protects your nonprofit in these situations. It includes a duty to disclose clause that says anyone involved with your nonprofit must disclose any financial interests and material facts to your directors. It also outlines procedures for addressing conflicts of interest if they ever arise.
7) Hold an Initial Meeting and Establish Your Corporate Record
At this point, you’re ready to hold an initial organizational meeting with your board of directors. At this important meeting, you need to elect directors and officers, approve the bylaws and conflict of interest policy, and adopt resolutions.
As with any meeting of your nonprofit corporation, you should take detailed notes of everything that takes place. This documentation can then become part of your corporate record, which is a permanent written record of all important organizational decisions.
8) File for South Carolina Tax Exemption
Many nonprofit entities in South Carolina can apply for tax exemption within the state. First, to be exempt from the state’s corporate income taxes, you’ll need to start with a letter of exemption (obtainable from the IRS). You’ll send a copy of that letter along with a letter of your own requesting tax exemption within the state.
Next, if you want exemption from the state sales taxes, you can submit an application for exemption. For more information on this important step, the South Carolina Department of Revenue Services can help.
9) Register for Charitable Fundraising
In South Carolina, nonprofit corporations are required to register with the Division of Public Charities in order to receive and solicit charitable contributions. To learn more, check out the state’s public charities page. Then you’ll be ready to raise funds for your cause.
10) Obtain Business Licenses and Permits
While South Carolina does not have a general business license that applies to all companies operating in the state, there are hundreds of industry-specific permits and licenses that you may need to acquire for your organization.
For one, South Carolina upholds the licensing requirements of any federally-regulated industries. Check here to determine if your business must be licensed by a federal agency.
You’ll also want to take a look at the state’s license board listings to determine if any of them will apply to your nonprofit corporation.
Your city or county may also require general business licenses. Here some of the largest cities in South Carolina which require local licenses:
11) Acquire Insurance
Every business with employees located in the state of South Carolina is required by law to obtain two different kinds of insurance policies: workers’ compensation and unemployment insurance.
You can learn more about these insurance types and how they apply to South Carolina businesses by visiting the Workers’ Compensation Commission or the Department of Employment and Workforce websites. No matter what line of business your nonprofit is in, you need these policies.
In addition, you should also pursue general liability insurance and other more industry-specific types of insurance, but these are not legally required.
Where Can I Find Help for My South Carolina Nonprofit?
The process of forming and maintaining nonprofit corporations can be tricky, no matter which state you’re located. Fortunately, there are great resources in South Carolina to help you out in case you get stuck.
As for the state of South Carolina, if you require assistance, you can always turn to Together SC. In their own words, Together SC “serves the thousands of South Carolinians dedicated to community service, leadership and caring through nonprofit and philanthropic organizations.” Together SC does require membership, but joining grants you several advantages, including unique learning resources, member discounts, and more, so joining will be worth your while.
In addition, if you would rather hire a service to incorporate your nonprofit for you, that’s an option as well. There are plenty of services that can handle much of the formation process, leaving you more time to focus on the actual operation of your nonprofit corporation.
These service providers (like Northwest Registered Agent) also offer valuable and convenient bonus features, like the inclusion of a full year of registered agent service with the purchase of a nonprofit formation package. They can save you a considerable amount of hassle, and all without costing an arm and a leg.
As you can see, there are quite a few crucial steps that you’ll need to take if you want to form a compliant nonprofit corporation in the state of South Carolina. However, it’s important to remember that if you need help at any time, it is available to you ― you don’t need to DIY the entire process.
We hope this guide helped you understand the details of the South Carolina nonprofit corporation process, and we wish you the best of luck with your new charitable organization!