The South Carolina CL-1 form is the Initial Annual Report of Corporations, and every new corporation doing business in the state must file it along with a $25 minimum license fee. For domestic corporations, it travels with the Articles of Incorporation; for foreign corporations, it goes in with the Application for Certificate of Authority. The form sets up your tax account with the Department of Revenue, and without it the Secretary of State will not process your incorporation.
Who Has to File
South Carolina Code Section 12-20-40 requires the initial annual report and minimum license fee from any corporation submitting initial articles of incorporation, an application for certificate of authority, or articles of domestication.1South Carolina Legislature. South Carolina Code 12-20-40 – Initial Annual Report and Minimum License Fee To Be Filed With Initial Articles of Incorporation or Application for Certificate of Authority That covers every C-corporation and S-corporation, whether formed in South Carolina or coming in from another state.
LLCs are not automatically off the hook. If your LLC has elected to be taxed as a C-corp or S-corp, you file the CL-1 too.2South Carolina Department of Revenue. South Carolina Department of Revenue – Initial Annual Report of Corporations LLCs taxed as a partnership or disregarded entity do not. General partnerships are exempt, and so are most nonprofits. The one nonprofit exception is a nonprofit corporation formed as a political association, which does file the CL-1 with its Articles of Incorporation.3South Carolina Secretary of State. FAQs About Business Entities
A foreign corporation that begins doing business in South Carolina without first obtaining a Certificate of Authority still owes the CL-1 and the $25 fee. In that case, the form goes directly to the Department of Revenue within 60 days of starting operations or using capital in the state.1South Carolina Legislature. South Carolina Code 12-20-40 – Initial Annual Report and Minimum License Fee To Be Filed With Initial Articles of Incorporation or Application for Certificate of Authority You can submit it through MyDORWAY by sending a web message or starting a Business Tax Application.2South Carolina Department of Revenue. South Carolina Department of Revenue – Initial Annual Report of Corporations
What the Form Asks For
The CL-1 is short, but every field feeds the Department of Revenue’s records directly. You can download it from the Department of Revenue or from the Secretary of State’s forms page.4South Carolina Secretary of State. Business Entities Online – Downloadable Paper Forms Gather the following before you sit down to complete it:
- The corporation’s exact legal name, matching the Articles of Incorporation or Certificate of Authority.
- The registered agent’s name and South Carolina address. Under Section 33-5-101, the agent must be either a South Carolina resident or a corporation (domestic or authorized foreign) with an office at the registered address.5South Carolina Legislature. South Carolina Code 33-5-101 – Registered Office and Registered Agent
- The name, title, address, and Social Security number of every owner, officer, and director. The SSN requirement catches many first-time filers off guard.2South Carolina Department of Revenue. South Carolina Department of Revenue – Initial Annual Report of Corporations
- The total number of authorized shares of capital stock, broken down by class and series, with par value listed or marked as none.2South Carolina Department of Revenue. South Carolina Department of Revenue – Initial Annual Report of Corporations
- The month your fiscal year ends. This sets your tax reporting cycle, so pick a month that aligns with your natural business cycle before you file. The IRS treats your first return as the adoption of your tax year, and changing it later requires IRS approval.6Internal Revenue Service. Tax Years
- A signature from an owner, officer, or director. Not the registered agent. This is a common mistake.2South Carolina Department of Revenue. South Carolina Department of Revenue – Initial Annual Report of Corporations
How to File and What It Costs
Domestic corporations submit the CL-1 in one packet with the Articles of Incorporation. Combined payment is $135: $110 for the Articles and $25 for the CL-1.4South Carolina Secretary of State. Business Entities Online – Downloadable Paper Forms Foreign corporations attach the CL-1 to the Application for Certificate of Authority with the same $25 fee.2South Carolina Department of Revenue. South Carolina Department of Revenue – Initial Annual Report of Corporations
The $25 is a minimum license fee, not a flat processing charge. South Carolina’s corporate license fee is $15 plus $1 per $1,000 of capital stock and paid-in surplus, with a $25 floor.7South Carolina Legislature. South Carolina Code 12-20-50 – Imposition of License Tax on Corporations Generally A new corporation with modest capital will owe the minimum. A corporation launching with significant capitalization could owe more at the initial filing.
Online Filing
The Secretary of State’s Business Entities Online system at businessfilings.sc.gov accepts the Articles of Incorporation and CL-1 together electronically, with payment by credit card or electronic check.8South Carolina Secretary of State. Online Filings You receive digital confirmation and an electronic copy of the processed filing.
Paper Filing
If you file on paper, print the CL-1 and put it in the same envelope as your Articles of Incorporation or Certificate of Authority application. Pay by check or money order made out to the South Carolina Secretary of State, and mail the package to the business filings office in Columbia. A file-stamped copy comes back once the package is processed.
If You Don’t File
Without the CL-1, the Secretary of State will not process your Articles of Incorporation. Your corporation does not legally exist until the full package is complete.
A foreign corporation already operating in the state without filing faces a late-filing penalty of 5% per month up to 25%, a late-payment penalty of 0.5% per month up to 25%, and interest at the prevailing federal rate.
Continued non-compliance can trigger administrative dissolution. Under Section 33-14-200, the Secretary of State may dissolve a corporation that fails to deliver its annual report, lacks a registered agent, or fails to pay required fees and taxes.9South Carolina Legislature. South Carolina Code 33-14-200 – Grounds for Administrative Dissolution A dissolved corporation loses its legal standing, which can expose officers and directors to personal liability for business debts and make contracts harder to enforce. Reinstatement is available, but you have to clear every overdue filing and back fee, and the gap in corporate existence raises questions from banks and business partners.
What Comes Next
The CL-1 is a one-time filing. Your ongoing annual report rides along with the corporate income tax return each year: Schedule D of Form SC1120 for C-corporations, Form SC1120S for S-corporations. The same license fee formula applies annually, with the same $25 minimum.7South Carolina Legislature. South Carolina Code 12-20-50 – Imposition of License Tax on Corporations Generally
Once the Secretary of State has processed your filing, apply for a federal Employer Identification Number. The EIN application asks whether you have registered with the state, so finish the state side first.10South Carolina Business One Stop. Employer Identification Number If you plan to elect S-corporation tax treatment, file IRS Form 2553 with signatures from all shareholders, generally within 75 days of formation or by March 15 of the year the election takes effect.11Internal Revenue Service. S Corporations