Instead of filing with the Secretary of State, South Carolina corporations file their annual reports as part of their tax returns with the Department of Revenue. For LLC owners in South Carolina, there's good news: most LLCs don't need to file annual reports at all, regardless of their tax status.
C corporations, S corporations, and LLCs taxed as corporations must file through the Department of Revenue’s tax system.
South Carolina's system differs significantly from other states. The Secretary of State handles business formation and registration, while the Department of Revenue handles ongoing annual reporting for corporations through the tax filing process.
New corporations must submit Form CL-1 (Initial Annual Report of Corporations) and a $25 fee. This is a one-time initial filing, not an annual requirement. It applies to:
You can submit Form CL-1 online at sos.sc.gov/online-filings when registering your business.
After the initial CL-1 filing, corporations and LLCs taxed as corporations must file annual corporate tax returns (SC1120 or SC1120S) with the Department of Revenue. The annual report information is included as Schedule D of these returns.
Standard LLCs (those taxed as partnerships or disregarded entities) do not file annual reports or Form CL-1 in South Carolina.
You must file the CL-1 within 60 days of starting business in South Carolina. Skip this step and you could face significant late fees and penalties.
Continued non-compliance will lead to administrative dissolution by the South Carolina Secretary of State. When this happens, your business loses its legal standing to operate in South Carolina, potentially voiding contracts, disrupting banking relationships, and creating personal liability issues for owners and officers.
Organizing your information before filing can reduce your submission time from an hour to just 15 minutes. Use this checklist to prepare everything you'll need.
How do I correct an annual report I already submitted?
For errors on Form CL-1, file a corrected CL-1 with the Secretary of State. For errors on your corporate tax return (including the annual report portion on Schedule D), file an amended return (SC1120X or SC1120SX) with the Department of Revenue.
Do I need original signatures if I file online?
No. Electronic signatures are fully acceptable for online filings through MyDORWAY. The person signing must be an authorized representative (officer, director, or owner), but physical signatures aren't required for electronic submissions. Maintain internal records documenting who submitted the filing and when.
Do most LLCs really not need to file an annual report in SC?
Correct. Standard LLCs (taxed as sole proprietorships or partnerships) don't file annual reports in South Carolina. Only LLCs that elected corporate taxation must file Form CL-1 initially, followed by annual corporate tax returns (SC1120 or SC1120S).
This exception makes South Carolina's requirements significantly different from most states, where all LLCs must submit annual reports.
What's the difference between an annual report and a tax return in SC?
For corporations in South Carolina, they're integrated. Your annual report information is included as Schedule D of your corporate tax return (SC1120 or SC1120S), not filed as a separate document with the Secretary of State, as in most other states. South Carolina's integrated approach streamlines the process but differs from standard practices.
South Carolina's tax-integrated annual report system creates unique challenges for entity management. For those managing multiple entities across different states, Secretary of State filings can feel like a never-ending maze. The secret is establishing efficient filing processes to ensure compliance without drowning in administrative tasks.
Discern offers a comprehensive solution for businesses managing multiple entities across various jurisdictions.
Let Discern help you handle compliance. Book a demo today, and we’ll have you up and running in minutes.
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