How to Start a Nonprofit in South Carolina

1. Name Your Organization

   Your organization’s name establishes its brand and is also important for incorporating with the state. The legal name of your nonprofit corporation may not conflict with any other organization registered in the state. Make sure the name is available and meets state requirements.

   Name Search:	South Carolina Secretary of State - Division of Business Filings Name search
   Suffix:	Not required.  South Carolina Code of Laws &sect33-33-401

2. Recruit Incorporators and Initial Directors

   The incorporator is the person who signs the Articles of Incorporation for your nonprofit. You will need at least one, but can have more than one. Directors make up the governing body of your nonprofit corporation and are stakeholders in your organization’s purpose and success. You’ll want to identify three, unrelated individuals to meet IRS requirements. You will also want to be aware of any age or residency requirements.

   South Carolina director requirements:	Number: minimum 3 Qualifications: Natural person. No residency requirement. No membership requirement. Term: default is 1 year, 5 year maximum Quorum: majority Committee: minimum 2 directors
   South Carolina officer requirements:	A president, a secretary, and a treasurer are required. Two or more offices may be held by the same individual.

3. Appoint a Registered Agent

   A registered agent is responsible for receiving legal notices on behalf of your organization. The appointed registered agent must be physically located in the state and maintain an office that is open during regular business hours. As a nationwide registered agent, our service is designed to receive your legal documents and provide secure access to those documents through your online account. Our local South Carolina registered agent office is located in Charleston, SC. We offer registered agent service independently or as part of our nonprofit formation packages.

4. Prepare and File Articles of Incorporation

   Your nonprofit’s articles of incorporation officially mark the creation of your organization. They document where and when the organization was formed and capture other information necessary to verify its existence. While requirements for language vary from state-to-state, there are some basic provisions that the IRS will look for when you apply for 501(c)(3) exemption. It is important to customize the articles for your organization and make sure you meet the state and IRS requirements. Meeting these requirements from the start will help avoid having to make amendments later or risk getting your 501(c)(3) application rejected. Some states will also require you to publish your articles of incorporation, so be mindful of any deadlines and publishing instructions.

   Agency:	South Carolina Secretary of State - Division of Business Filings
   Form:	Articles of Incorporation (§33-31-202)
   Filing Method:	Mail or online.
   Agency Fee:	$25
   Turnaround:	~7-10 business days by mail. ~1-2 business days online.
   Law:	South Carolina Nonprofit Corporations Act
   Notes:	You must attach 501(c)(3) Attachment ($0 fee) if you will apply for 501(c)(3) tax exemption. Submit the original and one copy. Include a self-addressed stamped envelope. Political associations must also submit CL-1 and an additional $25 fee.

5. File Initial Report

   After filing articles of incorporation, you must file an initial report.

   Agency:	South Carolina Department of Revenue
   Form:	Form CL-1: Initial Annual Report of Corporations
   Filing Method:	Mail or online.
   Agency Fee:	$25 (paid at time of formation)
   Due:	At the time of formation.
   Law:	S.C. Code of Laws § 33-31-202
   Penalties:	Late filing of this return will incur a delinquent penalty of 5% per month not to exceed 25%.
   Notes:	Most nonprofits do not need to file an initial report. Only political associations are required to file.

6. Obtain an Employer Identification Number (EIN)

   This unique, nine-digit number is assigned by the IRS to identify your nonprofit. All types of nonprofits will apply for an EIN, not only those that hire employees. You will use your EIN to open a bank account, apply for 501(c)(3) status, and submit 990 returns to the IRS.

   Agency:	Internal Revenue Service (IRS)
   Form:	IRS Form SS-4
   Instructions:	Applying for an EIN without a SSN/TIN: Online applications are not accepted if an individual does not have a SSN/TIN. Form SS-4 must be completed, signed, and faxed to the IRS, leaving the SSN/TIN field blank or adding the terminology "foreign" to that line item. To follow up on the application, call the IRS and ensure they received the application.  Depending on the agent you speak with, you may be able to obtain the EIN over the phone. The IRS may then fax the EIN documentation back to you.
   Filing Method:	Mail, phone, fax, or online.
   IRS fee:	$0
   Turnaround:	Immediately online or by phone. 4 business days by fax. 4-5 weeks by mail.
   Notes:	The IRS website is only available during certain hours. Print your EIN before closing your session. For additional guidance, see IRS Pub 1635: Understanding Your EIN.

7. Store Nonprofit Records

   As you launch your nonprofit, you will receive a number of official documents. Organizing these documents in one place will save you headaches down the road. You will soon have numerous items to keep in your records including your EIN letter, bylaws, meeting minutes, 501(c)(3) determination letter, and more.

   
   
   

   A great way to maintain necessary documentation is Records Manager, our software for storing records securely, tracking directors and officers, and getting notified of meetings.

8. Establish Initial Governing Documents and Policies

   Your bylaws are the governing document for your nonprofit. They serve as your organization’s operating manual and should be consistent with your articles of incorporation and the law. When your Board of Directors meets for the first time, you’ll review and ratify the bylaws and they will be a roadmap for governance from there.

   At the same time, you’ll also want to create and adopt a conflict of interest policy. A conflict of interest is when someone in a key position in your nonprofit has competing interests and is making choices that could benefit themselves to the harm of the organization. Personal interests should be set aside and organizational interests prioritized. If a conflict of interest does arise, it should be disclosed immediately.

   Your application to the IRS for 501(c)(3) exemption will require that both the bylaws and the conflict of interest policy are approved and adopted. Once they’ve been adopted, safely store them in your Nonprofit Records Kit.

9. Hold Organizational Meeting of the Board of Directors

   The initial organizational meeting of your Board of Directors will be incredibly productive. At this meeting you will approve the bylaws, adopt the conflict of interest policy, elect directors, appoint officers, and approve resolutions such as opening the organization’s bank account. Important decisions are being made so be sure to record them in the meeting minutes.

10. Get South Carolina State Tax Identification Numbers/Accounts

    South Carolina offers a combined registration application.

    Submit to:	South Carolina Department of Revenue https://dor.sc.gov/
    Form:	Form SCDOR-111: South Carolina Department of Revenue Tax Registration Application
    Instructions:	Form SCDOR-111 - Instructions
    Filing Method:	Mail or online
    Fee:	Varies based on taxes/licenses/permits required
    Notes:	If your organization qualifies for the sales tax exemption you do not need a retail license.

11. Apply for 501(c)

    Applying for 501(c) tax exemption can feel like the most daunting step in bringing your nonprofit dream into reality, but obtaining tax exemption comes with many benefits. You will be able to apply for grants and grow your fundraising success in addition to being exempt from IRS income tax. 501(c) is the chapter of the Internal Revenue Code that regulates nonprofit organizations. Like others, you may be most familiar with 501(c)(3) nonprofits, including charities and foundations. 501(c)(3) nonprofits apply using Form 1023 or Form 1023-EZ. Review the criteria for each application and make sure you meet the eligibility requirements set out by the IRS. Other types of nonprofits, including 501(c)(4)s and 501(c)(6)s, apply using Form 1024. After reviewing and approving your application, the IRS will return a Determination Letter officially recognizing your exemption.

    Completing the federal application for tax exemption is significantly easier with the assistance and support of a professional. Find someone with the expertise to ensure the correct application is being used and is completed accurately. A well-prepared application takes time, over 100 hours by IRS estimates, so put yourself on the path to success by finding a specialist to walk alongside you in the journey - from start to tax-exempt finish!

    Agency:	Internal Revenue Service (IRS)
    Form:	IRS Form 1023, IRS Form 1023-EZ, or IRS Form 1024
    Instructions:	IRS Instructions for Form 1023, IRS Instructions for Form 1023-EZ, or IRS Instructions for Form 1024.  Also see guidance IRS Pub 557: Tax-Exempt Status for Your Organization.
    Filing Method:	Mail
    Agency Fee:	$275 for organizations filing Form 1023-EZ and $600 for organizations filing Form 1023.
    Turnaround:	1023-EZ average: <1 month. 1023 average: 3-6 months.

    

12. Report Beneficial Ownership Information to FinCEN

    As of January 1, 2024, millions of entities in the US need to report beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN) as part of the Corporate Transparency Act (CTA). Nonprofits without 501(c) tax exemption formed before that date must submit BOI by December 31, 2024, while those formed after must submit it within 30 days of formation. Once 501(c) tax exemption is granted, the organization may claim an exemption from BOI reporting requirements via an update filing to FinCEN. Our BOI Reporting Service includes up to four initial, updated, and corrected reports per year, ensuring the data you report to FinCEN is updated.

13. Apply for State Tax Exemption(s)

    With your IRS Determination Letter in hand, make sure you familiarize yourself with your state’s requirements for recognizing your nonprofit’s tax-exempt status. This is an area where requirements vary state-by-state. Many states issue their own tax-exempt certificate that can be used for sales and use tax purposes, but it may require application and periodic renewal.

    To file to obtain exemption from state income tax:

    Not required

    
    
    

    When you receive your IRS Determination Letter granting recognition of exemption, you are also exempt from South Carolina corporate income tax.

    More information: South Carolina Department of Revenue

    To file to obtain Sales Tax Exemption:

    Agency:	South Carolina Department of Revenue
    Form:	Form ST-387: Application for Sales Tax Exemption
    Agency Fee:	$0
    Notes:	Certain nonprofit organizations in South Carolina are exempt from sales and use tax on items sold by the organizations for charitable purposes. The exemption applies only to items purchased for resale and does not apply to items purchased by an organization for its own use.

14. Register for Charitable Solicitation (Fundraising)

    This is another area where laws differ from state to state, but most states require any nonprofit soliciting donations to register to do so on an annual basis. This means registering in the state prior to soliciting any resident of that state. Registering in your home state is essential, but you may also need to register other states depending on the scope of your organization.

    South Carolina Charitable Organization Registration

    Agency:	South Carolina Secretary of State - Division of Public Charities
    Law:	South Carolina Code Annotated §33-56-10 et seq.
    Foreign Qualification is Prerequisite:	No
    Registered Agent (Special Agency) Required?	Yes

    Automatic Exemption

    More Details

    Exemption Eligible Organizations:	Religious organizations Political organizations
    Notes:	Religious organizations and political candidates and groups are automatically exempt from registration.

    Registration to Obtain Exemption

    More Details

    Exemption Eligible Organizations:	Organizations that do not use professional solicitors, professional fundraising counsels, or commercial coventurers to solicit and meet one of the following criteria: An educational institution which solicits contributions from only its students and their families, alumni, faculty, friends, and other constituencies, trustees, corporations, foundations, and individuals who are interested in and supportive of the programs of the institution A person requesting contributions for the relief of an individual specified by name at the time of the solicitation when all of the contributions collected, without deductions of any kind, are turned over to the named beneficiary for his use, as long as the person soliciting the contributions is not a named beneficiary A charitable organization which (a) does not intend to solicit or receive contributions from the public in excess of $20,000 in a calendar year and (b) has received a letter of tax exemption from the Internal Revenue Service, if all functions, including fundraising activities, of the organization exempted pursuant to this item are conducted by persons who are compensated no more than $500 in a year for their services and no part of their assets or income inures to the benefit of or is paid to an officer or a member An organization which solicits exclusively from its membership, including a utility cooperative A veterans' organization which has a congressional charter The State, its political subdivisions, and an agency or a department of the State which are subject to the disclosure provisions of the Freedom of Information Act   Also, organizations that meet one one of the following criteria regardless of whether or not they use professional solicitors, professional fundraising counsels, or commercial coventurers to solicit: A public school district located in the State and any public school teaching pre-K through grade twelve located within the public school district. For purposes of this chapter, the term "public school" includes any student organization within the school that does not maintain separate financial accounts or a separate federal Employer's Identification Number (EIN) from the school and whose fundraising revenues are deposited in the school's student activity fund A charitable organization that does not intend to solicit or receive contributions from the public in excess of $7,500 during a calendar year
    Form:	Application for Registration Exemption
    Agency Fee:	$0
    Law:	SC Code § 33-56-50

    Renewal to Maintain Exemption

    More Details

    Exemption Eligible Organizations:	Organizations that do not use professional solicitors, professional fundraising counsels, or commercial coventurers to solicit and meet one of the following criteria: An educational institution which solicits contributions from only its students and their families, alumni, faculty, friends, and other constituencies, trustees, corporations, foundations, and individuals who are interested in and supportive of the programs of the institution A person requesting contributions for the relief of an individual specified by name at the time of the solicitation when all of the contributions collected, without deductions of any kind, are turned over to the named beneficiary for his use, as long as the person soliciting the contributions is not a named beneficiary A charitable organization which (a) does not intend to solicit or receive contributions from the public in excess of $20,000 in a calendar year and (b) has received a letter of tax exemption from the Internal Revenue Service, if all functions, including fundraising activities, of the organization exempted pursuant to this item are conducted by persons who are compensated no more than $500 in a year for their services and no part of their assets or income inures to the benefit of or is paid to an officer or a member An organization which solicits exclusively from its membership, including a utility cooperative A veterans' organization which has a congressional charter The State, its political subdivisions, and an agency or a department of the State which are subject to the disclosure provisions of the Freedom of Information Act   Also, organizations that meet one one of the following criteria regardless of whether or not they use professional solicitors, professional fundraising counsels, or commercial coventurers to solicit: A public school district located in the State and any public school teaching pre-K through grade twelve located within the public school district. For purposes of this chapter, the term "public school" includes any student organization within the school that does not maintain separate financial accounts or a separate federal Employer's Identification Number (EIN) from the school and whose fundraising revenues are deposited in the school's student activity fund A charitable organization that does not intend to solicit or receive contributions from the public in excess of $7,500 during a calendar year
    Form:	Application for Registration Exemption (Renewal)
    Agency Fee:	$0
    Due:	Annually by the 15th day of the 5th month following the close of your fiscal year.

    Initial Registration

    More Details

    Form:	Registration Statement for a Charitable Organization
    Filing Method:	Online or mail.
    Agency Fee:	$50 + $1.85 online filing fee.
    Turnaround:	1 week
    Original Ink:	Not required
    Notarization Required?:	Not required
    Notes:	The CEO and CFO must sign. Late registration forms may result in a fine of up to $2,000 against the charitable organization. Some South Carolina counties and municipalities may require charities that solicit in-person to register prior to fundraising.
    Before you Apply:	Domestic Applicants: Check the available exemptions to see if your charity is eligible for exemption from the full registration requirement. Appoint a registered agent to receive legal documents in South Carolina. Look through the list of required attachments and make sure that you have each required document in hand before starting the registration application. Foreign Applicants: Check the available exemptions to see if your charity is eligible for exemption from the full registration requirement. Appoint a registered agent to receive legal documents in South Carolina. Look through the list of required attachments and make sure that you have each required document in hand before starting the registration application. If you will foreign qualify in South Carolina, obtain a certificate of good standing from your home state to submit during the foreign qualification process. The certificate cannot be more than 30 days old when filing foreign qualification documents.
    How to Apply:	Domestic Applicants: File entity formation documents with the South Carolina Secretary of State - Division of Business Filings. Submit a Registration Statement for a Charitable Organization and all required attachments to the South Carolina Secretary of State - Division of Public Charities. Foreign Applicants: Determine whether or not your charity will need to foreign qualify based on your activity in South Carolina. If not required, skip to number 3. File foreign qualification documents with the South Carolina Secretary of State - Division of Business Filings. Submit a Registration Statement for a Charitable Organization and all required attachments to the South Carolina Secretary of State - Division of Public Charities.
    Required Attachments:	IRS determination letter List of officers and directors Professional fundraising contracts IRS form 990 (only if it hasn't already been submitted to the Secretary of State)

    Registration Renewal
    Annual Registration Statement

    More Details

    Form:	Registration Statement for a Charitable Organization (Renewal)
    Filing Method:	Online or mail.
    Agency Fee:	$50 + $1.85 online filing fee.
    Due:	Annually by the 15th day of the 5th month following the close of your fiscal year. So if your fiscal year ends December 31, then file by May 15.
    Due Date Extension:	The registration statement renewal cannot be extended.
    Original Ink:	Not required
    Notarization Required?:	Not required
    Penalties:	$10 per day per delinquent report (max $2,000 per report)
    Notes:	The CEO and CFO must sign. You must file an annual financial report with the Secretary of State. If this has not yet been filed, file it with your renewal. The exemption form must be resubmitted annually. Organizations who do not file by the due date will receive a notice by certified mail giving them 15 days to submit the required renewal before late fees begin to accrue.
    Required Attachments:	IRS form 990 This should only be submitted if the annual financial statement has not already been submitted to the department and NO extension was granted by the IRS. If an extension for time to file the annual financial statement was granted, submit a copy of that extension request/approval. The 990 can then be submitted along with the annual financial statement by the extended due date for the annual financial report. List of officers and directors Professional fundraising contracts IRS determination letter

    Registration Renewal
    Annual Financial Report

    More Details

    Form:	Annual Financial Report for a Charitable Organization
    Filing Method:	Mail or online.
    Agency Fee:	$0
    Due:	Annually by the 15th day of the 5th month following the close of your fiscal year. So if your fiscal year ends December 31, then file by May 15.
    Due Date Extension:	The due date for the annual financial statement can be extended for 6 months beyond the original due date by emailing the department at charities@sos.sc.gov with your request.
    Original Ink:	Not required
    Notarization Required?:	Not required
    Penalties:	$10 per day per delinquent report (max $2,000 per report)
    Notes:	Organizations who do not file by the due date will receive a notice by certified mail giving them 15 days to submit the required renewal before late fees begin to accrue.
    Required Attachments:	None

    Contract Filing

    More Details

    Form:	Notice of Solicitation - CCV
    Filing Method:	Online
    Agency Fee:	$0
    Turnaround:	1-2 business days
    Due:	File a notice of solicitation at least 10 days prior to the start of each solicitation campaign.
    Notes:	Contracts between charities and commercial coventurers must disclose the following, if applicable: Legal name and alias name, address, and registration number, if any, of the professional solicitor, professional fundraising counsel, or commercial co-venturer; Legal name, address, and registration number of the charitable organization; Name and residence address of each person directing or supervising the contract solicitation services; Description of the event or campaign; Date the solicitation or campaign will commence; Date the solicitation or campaign will terminate; Statement of the amount or guaranteed minimum percentage of gross receipts to be remitted or retained by the charitable organization, excluding the amount which the charitable organization must pay for fundraising costs; Statement of the amount or percentage of gross receipts with which the professional solicitor, professional fundraising counsel, or commercial co-venturer is compensated, including the amount the professional solicitor, professional fundraising counsel, or commercial co-venturer must be reimbursed as payment for fundraising costs; and If applicable, the maximum dollar amount that will benefit the charitable organization.

    Reinstatement

    Not required

    
    
    

    Formal reinstatement is not required. Charities wishing to renew a lapsed registration should submit a renewal filing (registration statement and/or annual financial report) with payment of applicable fees (renewal + late fees). Organizations that have been out of compliance for an extended time should reach out to the Division directly for a detailed list of what they need to supply.

    Change of Fiscal Year

    More Details

    Filing Method:	Email charities@sos.sc.gov to update fiscal year.
    Agency Fee:	$0
    Turnaround:	1-2 business days
    Notes:	Your fiscal year can be updated by emailing the secretary of state with notice of this change. Make sure to include the full name of the organization and charity registration ID.

    Cancelation

    More Details

    Filing Method:	Email charities@sos.sc.gov
    Agency Fee:	$0
    Notes:	To withdraw a registration you must email and termination request letter and make sure all annual financial reports are up to date to the last day of solicitations in South Carolina.

    To fundraise nationally or online, please see our Fundraising Compliance Guide. Our services manage your initial, renewal, and exemption filings in every state.

15. Obtain Other Business Licenses & Permits

    Running your nonprofit corporation legally also means securing all applicable licenses and permits. The range of local, state, and federal requirements is wide. Access resources like the Small Business Administration Business License & Permit look-up tool and search by your business type and locality.

Frequently Asked Questions

You’ve made it! You turned your passion into a legitimate nonprofit corporation exempt under IRS 501(c) and are benefiting your community. That solid foundation on which you built your organization requires ongoing maintenance. Investing in maintaining compliance with all of the government agencies is an ongoing responsibility and commitment needed to ensure your vision continues long into the future. Check out our compliance guide to learn more!

Once you have registered your nonprofit per the steps listed above, you will need to maintain compliance with all of the government agencies. Staying current with the IRS and state requirements is an ongoing responsibility. Continue reading our South Carolina nonprofit compliance guide to learn more!

Continue reading "South Carolina Nonprofit Compliance"

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