South Carolina Qualification for a Corporation Formed Elsewhere

South Carolina labels any corporation formed under another jurisdiction's law as foreign, whether the home jurisdiction is a sister state or a different country. To transact business here, a foreign corporation applies to the Secretary of State in Columbia for a certificate of authority under section 33-15-103 of the Business Corporation Act. Once authorized, a foreign corporation stands on the same footing as a South Carolina corporation of its kind: no greater rights or privileges, and the same duties, restrictions, penalties and liabilities.

Nothing about this changes the corporation's identity. The statute says the state does not regulate the organization or internal affairs of a foreign corporation with a certificate, so the bylaws, share structure and board rules continue to follow the home jurisdiction.

Under section 33-15-101, no foreign corporation can transact business in the state without first holding the Secretary of State's certificate. The Act does not say what transacting business means; in its place sits a negative list, and the Act says that list is incomplete:

• Maintaining, defending or settling a proceeding
• Meetings of the board or the shareholders, and similar internal matters
• Maintaining bank accounts
• A stock-transfer or registrar office for the company's own shares and bonds, or trustees and depositories that hold them
• Selling through independent contractors
• Taking orders that are accepted outside South Carolina before they turn into contracts
• Borrowing against, or taking a mortgage or security interest in, real or personal property
• Pursuing unpaid debts and enforcing rights in pledged property
• Owning real or personal property, without more
• A lone transaction completed within a thirty-day period, outside any series of similar ones
• Business in interstate commerce
• Owning and controlling a subsidiary corporation that is organized in, or does business in, the state
• Owning, without more, an interest in a limited liability company that is organized or transacting business in the state

How to read the list

Owning property without more appears on it, so merely holding title to land or equipment does not by itself amount to transacting business. The words without more matter, though. A corporation that also leases the property to tenants, staffs it or runs operations from it has done more, and the list gives it no protection. The Secretary of State's FAQ states the rule plainly: an entity transacting business here must apply for a certificate of authority. If the facts are close, take the question to a South Carolina lawyer.

The application is Form F0002, revised April 2018. Its fee is $110, which the statute builds from a $10 filing fee and a $100 tax. The form's instructions add a second payment: the CL-1 Initial Annual Report, a $25 license fee paid to the Secretary of State with the application, for a total payment of $135. The CL-1 is a Department of Revenue form, and the Secretary of State cannot process it unless it accompanies the application.

You can file through the Business Entities Online system, which the Secretary of State says is faster and lets you correct errors before acceptance, or mail the form to Attn: Corporate Filings, 1205 Pendleton Street, Suite 525, Columbia, accompanied by a check for the Secretary of State and a return envelope bearing your address and postage.

What the form asks

• The corporation's name, matching the name on its home certificate of existence
• The state or country of incorporation, and whether it is a general business corporation or a professional corporation
• The date of incorporation and its duration
• The principal office address
• The proposed registered office in South Carolina, with the registered agent's name and the agent's signed consent
• The directors, or those who exercise a director's authority, and the principal officers, each with a business address
• The authorized shares by class and series, or none if no shares are issued
• An effective date, unless a delayed date is chosen, and an officer's signature

A foreign professional corporation also states that its sole purpose is a specified professional service and that its shareholders, at least half its directors and its officers other than the secretary or treasurer are licensed in one or more states.

South Carolina requires one. Instruction 5 on Form F0002 asks for the original certificate of existence signed off by the home-state records official, dated within the past 30 days. The Secretary of State lists a missing or stale certificate among the common reasons foreign applications are rejected. Online filers upload a copy.

The corporation requests the document from its home filing office, which sets the fee. Because 30 days run fast, request it only when the rest of the package is ready, and make sure the corporate name on line one of the application matches the certificate exactly.

A foreign corporation's name here must satisfy section 33-4-101, so a home name lacking an ending takes an ending (corporation, incorporated, company, limited, or inc., corp., co. and ltd.) for use in South Carolina. On the Secretary of State's records the name must differ clearly from other corporations, reserved names and not-for-profit corporations. When the real name cannot be used, the corporation may use a fictitious name instead, supported by a certified board resolution filed with the application and an extra $10 filing fee.

Agent eligibility

Section 33-15-107 conditions authority on an unbroken registered office and registered agent here. The statute names three kinds of agent: an individual living in South Carolina, a domestic corporation (profit or nonprofit), or an authorized foreign corporation (profit or nonprofit). In every case the registered office address is the agent's own business office. The statute does not mention LLCs, and it states no business-hours rule. Before ordering an agent, check with Mainstay Filing support that it is eligible for your filing.

A corporation changes its agent or office by filing a statement of change for $10. If only the street address of the agent's office moves, the agent can file it for $2.

The annual report here is a tax-side requirement. A registered foreign corporation files its annual report with the corporate income tax return at the Department of Revenue, in Schedule D, and pays a license fee that is at least $25 each year. Calendar-year C corporations file by April 15, and S corporations by March 15. The Department of Revenue also lists corporations whose only contact with South Carolina is their registration with the Secretary of State as exempt from the annual report and license fee, so ask the Department how it applies to you.

The Secretary of State must begin revocation proceedings if the corporation does not deliver its annual report to the Department of Revenue when due, does not pay franchise taxes or penalties when due, or lacks a registered agent. A name, duration or home-state change requires an amended certificate of authority.

Leaving

A foreign corporation cannot withdraw until it obtains a certificate of withdrawal. The form is the Application for Surrender of Authority to Do Business, $10. The application recites that business here has ended, surrenders the certificate, ends the agent's appointment and routes later service of process through the Secretary of State. The Department of Revenue will not accept a final tax return until the withdrawal is on file.

Section 33-15-102 sets the consequences of operating without a certificate.

• No certificate, no lawsuit: the corporation cannot pursue a claim in a South Carolina court, and a successor or assignee of such a claim is barred as well. A judge can also stay a lawsuit until the question of whether authority was required is settled.
• A civil penalty accrues at $10 a day, up to $1,000 for each year of unauthorized business, and the Attorney General collects it.
• The failure does not impair the validity of its corporate acts, and the corporation can still defend any proceeding against it.

Mainstay Filing's foreign qualification service takes a corporation formed elsewhere through the South Carolina registration. Mainstay Filing drafts the application and files it at the Secretary of State's Columbia office. It lists a Mainstay Filing registered agent address on the form, free for the first year and then renewing at $149 a year. The owner provides the corporation's details and orders the certificate of existence from the home state. The annual report, tax returns and the withdrawal are the corporation's own.

Current checkout lines and the total are listed on the South Carolina foreign qualification page. If you file the application yourself and need only an agent, the South Carolina registered agent page covers that. Mainstay Filing provides filing and agent services only, so a doubtful doing-business question belongs with an attorney.