Managing a South Carolina healthcare practice requires tracking physician CME credits, corporate tax deadlines, and entity ownership rules simultaneously. Falling behind on any one triggers cascading consequences. One missed CME deadline doesn't just affect an individual license. It automatically strips ownership rights and forces mandatory share divestiture under state law.
The state enforces the Corporate Practice of Medicine doctrine through common law rather than explicit statutory prohibition. Combined with ongoing tax obligations (5% corporate income tax, Corporate License Fee calculations, and quarterly estimated payments), healthcare organizations face administrative complexity maintaining good standing across multiple regulatory frameworks.
Before diving into formation requirements, here's what makes South Carolina unique: the state recognizes four professional entity types: Professional Corporations (PCs) under Title 33, Chapter 19, Professional Limited Liability Companies (PLLCs) under Title 33, Chapter 44, Limited Liability Partnerships (LLPs) under Title 33, Chapter 41, and Professional Associations (PAs).
Choosing the right professional entity structure affects liability protection, ownership flexibility, and administrative burden. South Carolina's statutory framework creates significant differences in ownership restrictions, governance requirements, and professional practice limitations across entity types.
Professional Corporations (PCs)
Professional Corporations represent the most established entity structure for South Carolina healthcare organizations, governed comprehensively by Title 33, Chapter 19 of the South Carolina Code of Laws. Healthcare entities must file Articles of Incorporation (Form F0023) explicitly stating the entity is a professional corporation and specifying the professional services to be rendered. The statutory framework imposes strict ownership limitations: only licensed professionals may own shares and provide services through the PC.
Section 33-19-230 creates mandatory share divestiture provisions. When a shareholder becomes a "disqualified person" under Section 33-19-103 (losing professional licensure), the PC must acquire those shares. This makes CME compliance and license renewal critical corporate governance matters.
Under Section 33-19-150, names must contain "professional corporation," "professional association," "service corporation," "chartered," or abbreviations "P.C.," "PC," "P.A.," or "PA." The South Carolina Secretary of State Business Entities Division processes PC formations exclusively, and no separate Board of Medical Examiners entity-level approval is required.
Professional Limited Liability Companies (PLLCs)
South Carolina does not create a separate statutory designation for "Professional Limited Liability Companies." Instead, professional LLCs are formed under general LLC statutes in Title 33, Chapter 44 with professional service limitations. Healthcare attorneys structuring professional LLC formations must carefully incorporate professional practice restrictions into operating agreements, as Title 33, Chapter 44 does not contain explicit professional ownership designations like those found in PC statutes (Title 33, Chapter 19).
The naming requirement for professional LLCs follows standard LLC rules: entities must include "Limited Liability Company," "L.L.C.," or "LLC" in their legal names. This means entities cannot use "PLLC" as a standalone abbreviation in their legal name; they must instead use the standard LLC designators.
Limited Liability Partnerships (LLPs)
Healthcare organizations may form Limited Liability Partnerships under Title 33, Chapter 41 (Uniform Partnership Act), specifically Section 33-41-1110. LLPs register by filing for LLP status with the Secretary of State.
LLPs offer liability advantages where partners are not individually liable for other partners' professional errors, providing risk isolation while maintaining partnership taxation.
Professional Associations (PAs)
South Carolina does not maintain a separate statutory framework for Professional Associations. "PA" functions as a naming designation for professional corporations under Title 33, Chapter 19, with identical requirements as "PC" entities.
Corporate Practice of Medicine Doctrine
South Carolina enforces CPOM doctrine through common law rather than explicit statutory prohibition. The foundational case, Ezell v. Ritholz, 188 S.C. 39, 198 S.E. 419 (1938), established that corporations cannot practice professions requiring personal qualifications, skills, and trust. The South Carolina Board of Medical Examiners Advisory Opinion on Corporate Practice of Medicine (November 21, 2022) provides official regulatory guidance confirming physicians must maintain independent clinical judgment, non-physician entities cannot control medical decision-making, and corporate influence over medical practice is prohibited.
Here's where South Carolina makes life easier: no Board of Medical Examiners entity approval required. You file directly with the Secretary of State and typically get approval in 24 hours.
Good news: South Carolina eliminates annual reports for professional healthcare entities. This significantly reduces administrative burden compared to states requiring annual Secretary of State filings. For healthcare organizations managing 50+ professional corporations across multiple states, South Carolina's simplified structure means fewer recurring deadlines to track, though you still face quarterly tax payments, license renewals, and Corporate License Fee calculations for each entity.
**Annual Report Requirements: Eliminated**
According to the South Carolina Secretary of State FAQs About Business Entities, "Professional Corporations (PCs) and Professional Limited Liability Companies (PLLCs) do NOT have to file an annual report." This represents a major compliance simplification unique to professional entities. Healthcare organizations file only the initial CL-1 report (Form F0134) within 60 days of commencing business with a $25 minimum license fee, with no subsequent annual filings required to the Secretary of State.
Healthcare organizations must still track Corporate License Fee deadlines (April 15 for C Corps, March 15 for S Corps), quarterly estimated tax payments, and individual physician license renewals. Late filing triggers 5% per month penalties (maximum 25%) plus 0.5% per month late payment penalties (maximum 25%).
Corporate License Fee (Not a Franchise Tax)
South Carolina does not impose a separate franchise tax. Instead, corporations pay an annual Corporate License Fee calculated as 0.1% of capital paid in surplus plus $15, with a minimum annual fee of $25. This fee is paid annually as part of the corporate income tax filing (April 15 for C Corporations using Form SC1120, or March 15 for S Corporations using Form SC1120S), rather than as a separate Secretary of State filing.
Payment Deadlines:
Corporate Income Tax
South Carolina imposes a 5% corporate income tax on South Carolina taxable income for both C Corporations and S Corporations. Filing deadlines are April 15 for calendar year C Corporations (using Form SC1120) and March 15 for calendar year S Corporations (using Form SC1120S). If tax due is $100 or more, quarterly estimated payments are required on the 15th day of the 4th, 6th, 9th, and 12th months of the tax year. Electronic filing is mandatory if tax liability is $15,000 or more.
For practices with multiple professional corporations, quarterly payments multiply quickly. An organization with 10 South Carolina PCs must submit 40 separate quarterly estimates annually.
Extensions and Payment Requirements
Healthcare entities may request an extension to file by paying the balance due by the original due date. However, the SC Department of Revenue provides no extension of time to pay the Corporate Income Tax or License Fee. S Corporations must also withhold tax for nonresident shareholders, with the withholding due on the 15th day of the 3rd month following the end of the tax year (March 15 for calendar year filers).
Healthcare organizations must carefully estimate quarterly tax payments. If tax due is $100 or more, quarterly estimated payments are required on the 15th day of the 4th, 6th, 9th, and 12th months of the tax year. Underpayment triggers penalties, while organizations managing multiple professional corporations must calculate separate quarterly estimates for each entity.
Late Filing Penalties
South Carolina imposes specific penalties for late filing of the Initial CL-1 filing (Form F0134), which must be submitted within 60 days of commencing business or using capital in South Carolina:
These penalties apply to healthcare professional entities that fail to meet the initial 60-day CL-1 filing deadline. The minimum corporate license fee of $25.00 is due with this initial filing to avoid penalty assessment.
Recent Legislative Changes
Bill S.915 (2024) consolidated health agencies under the Executive Office of Health and Policy. Bill 486 (2026) creates annual cost reports for Medicaid HCBS providers only, not affecting physician practices or other professional corporations.
Here's what keeps healthcare practice administrators up at night: South Carolina law automatically strips physician-owners of ownership rights the moment their license lapses. No grace period, no discretion. Section 33-19-230 requires professional corporations to immediately acquire shares from any shareholder who becomes a "disqualified person" under Section 33-19-103. For multi-physician practices, this creates cascading risk—you're not just tracking CME compliance for professional development; you're monitoring entity ownership eligibility in real-time.
Continuing Medical Education Requirements
South Carolina physicians must complete 40 hours of Continuing Medical Education (CME) during each biennial (24-month) renewal period. CME credits must include Category I AMA/AOA approval designation, and documentation requirements include course provider information, course title, date of activity, Category I designation, number of hours earned, and recipient's name.
Renewal occurs on a biennial schedule with renewal dates falling between April 1 to June 30 every two years. Physicians may claim up to 10 hours of CME credit for volunteer medical services rendered without compensation, with a maximum cap of 25% of the required CME credits (exactly 25% of the 40-hour requirement), according to South Carolina Code Section 38-79-30(B).
Direct Statutory Connection: Licensing Status to Entity Ownership
Section 33-19-103 defines "disqualified person" as any individual ineligible to hold shares due to licensure loss. Section 33-19-230 mandates professional corporations acquire shares from disqualified persons, creating automatic ownership termination upon licensure loss.
Statutory Chain of Consequences
CME non-compliance triggers license loss, automatically classifying the physician as a "disqualified person" under Section 33-19-103, requiring immediate share acquisition under Section 33-19-230.
Healthcare organizations managing multiple physician-owners across several professional corporations implement automated license monitoring specifically to prevent this statutory chain from triggering unexpectedly.
Supervisory Physician Requirements
South Carolina Code Section 40-47-195 requires supervisory physicians to hold permanent, active, unrestricted licenses and be actively engaged in practice. Loss of active licensure triggers mandatory share divestiture under Sections 33-19-103 and 33-19-230.
Multi-Profession Entity Considerations
According to SC Code § 33-19-110, a professional corporation may be organized for rendering more than one type of professional service, but only if the combination of professional services is authorized by the licensing laws applicable to each profession. This requirement means that organizers must independently verify that each profession's licensing laws explicitly authorize participation in multi-discipline structures before combining services within a single entity. The South Carolina Board of Dentistry FAQ demonstrates profession-specific variations, stating South Carolina "does not restrict who can own a dental practice as long as the owner's involvement does not interfere with the dentist's professional judgment."
Does South Carolina's Corporate Practice of Medicine doctrine prohibit non-physician ownership of medical practices?
Yes, through common law. South Carolina enforces CPOM doctrine based on Ezell v. Ritholz (1938) and Board of Medical Examiners guidance, requiring 100% physician ownership of medical practices.
Do South Carolina professional entities file annual reports?
No. Professional Corporations and Professional Limited Liability Companies do NOT file annual reports according to the South Carolina Secretary of State. Healthcare entities file only an initial CL-1 report (Form F0134) within 60 days of commencing business with a $25 minimum license fee.
Should a healthcare organization form a Professional Corporation or Professional LLC in South Carolina?
The choice depends on governance preferences, liability structures, and tax objectives rather than compliance differences. Professional Corporations under Title 33, Chapter 19 offer explicit statutory frameworks for professional practice including mandatory divestiture provisions upon licensure loss and specific naming requirements ("P.C.", "PC", "P.A.", or "PA"). Formation costs $135 with Form F0023. Professional Limited Liability Companies under Title 33, Chapter 44 operate under general LLC statutes with professional restrictions applied through operating agreements rather than separate statutory provisions. Formation costs $110 with Form F0006. Both entity types eliminate annual report requirements and carry identical tax obligations (5% corporate income tax, Corporate License Fee). Professional Corporations provide more explicit statutory guidance for ownership restrictions and share transfers, while Professional Limited Liability Companies offer greater operating agreement flexibility. Healthcare attorneys should evaluate liability protection objectives, planned ownership structures, and multi-state expansion considerations when selecting entity type.
Are there separate Board of Medical Examiners approvals required for healthcare entity formation?
No. The South Carolina Board of Medical Examiners does not require entity-level registration, Certificate of Authorization, or entity approval fees. According to the Board's Advisory Opinion on Corporate Practice of Medicine, "The Board does not license or regulate corporations themselves but focuses on the licensees (physicians) practicing medicine." Healthcare entities file formation documents exclusively with the South Carolina Secretary of State, with processing completed in approximately 24 hours for online filings. All individual practitioners within the professional entity must hold current South Carolina medical licenses, with individual licensure applications processing in approximately 15 business days. This streamlined approach eliminates entity-level approval waiting periods and separate Board filing requirements, significantly reducing formation timelines compared to states requiring dual agency approvals.
How do multi-entity healthcare organizations manage compliance across multiple professional corporations?
This is exactly where administrative burden compounds quickly. A practice with 10 professional corporations faces 10 separate corporate tax filings, 10 Corporate License Fee calculations, 40 quarterly estimated payments annually, plus individual license renewals for all physician-owners.
Discern consolidates this complexity. Instead of receiving separate invoices from South Carolina for each entity's quarterly payment, you get unified deadline tracking across all your professional corporations. Our platform automatically monitors filing deadlines, calculates Corporate License Fees, and flags upcoming physician license renewals before they trigger mandatory divestiture provisions. Replace hundreds of separate state compliance tasks with consolidated entity payment management.
Replace hundreds of separate state invoices with consolidated entity payment management for ongoing compliance. Book a demo with Discern today and reduce administrative burden while maintaining compliance.
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