Understanding the South Carolina Solicitation of Charitable Funds Act: A Guide by Twisdale Law, PC
The South Carolina Solicitation of Charitable Funds Act, enacted in 1994 and codified at S.C. Code §§ 33-56-10 et seq., establishes a regulatory framework to oversee the solicitation of charitable funds within the state. This legislation ensures transparency, accountability, and compliance in how organizations solicit and manage contributions. Below, we provide an overview of the key provisions and requirements under the Act. What Is a Letter of Protest?What is a Charitable Organization? The Act defines a charitable organization as one of the following: 501(c)(3) Tax-Exempt Organizations: Entities recognized by the IRS as tax-exempt under Section 501(c)(3) of the Internal Revenue Code, including organizations focused on charitable, religious, educational, scientific, and other similar purposes. (S.C. Code § 33-56-20) Other Benevolent Organizations: Entities established for purposes such as social welfare, public health, civic improvement, or supporting law enforcement or firefighters. Soliciting Entities: Any organization employing a charitable appeal as the basis for solicitation or obtaining contributions from the public for charitable purposes. The definition explicitly excludes religious congregations (churches, synagogues, mosques) and political candidates or parties filing with the Federal Election Commission or State Election Commission. Registration Requirements for Charitable Organizations A charitable organization intending to solicit contributions in South Carolina must register with the Secretary of State’s Division of Public Charities prior to solicitation. This includes organizations that allow solicitation on their behalf. Key requirements: Initial Registration: A $50 fee is required, and registration must be renewed annually. Renewal is due 4.5 months after the end of the organization’s fiscal year. (S.C. Code § 33-56-30) Annual Financial Reports: Organizations must file financial reports annually, using IRS Forms 990, 990-EZ, or 990-PF. Extensions of up to six months may be requested. No fee is associated with this filing. Exemptions from Annual Registration Certain organizations may qualify for annual exemptions, including: Educational institutions. Groups soliciting for a named individual with proceeds directed to that individual. Small organizations intending to raise less than $20,000 annually and using unpaid or minimally compensated personnel. Organizations soliciting exclusively from members. Veterans’ organizations with congressional charters. State entities subject to Freedom of Information Act (FOIA) requirements. Note: Exemptions require an annual application and renewal. Professional Fundraisers and Solicitation Standards The Act also regulates professional fundraisers, defining three distinct categories: Professional Solicitors: Individuals compensated for soliciting contributions for a charitable organization. Paid employees or directors of a charitable organization may be classified as professional solicitors if their compensation is commission-based. Professional Fundraising Counsel: Consultants compensated for planning, managing, or advising charitable solicitation campaigns but who do not directly solicit contributions. Commercial Co-Venturers: Businesses promoting goods or services for profit while pledging a portion of proceeds to a charitable organization. Registration and Reporting Obligations Professional fundraisers must register annually with the Secretary of State, paying a $50 fee. Contracts between fundraisers and charitable organizations must be filed with the Secretary of State before solicitation begins. Professional solicitors and commercial co-venturers must file joint financial reports within 90 days after completing a campaign or annually for campaigns lasting longer than one year. (S.C. Code § 33-56-70) Disclosure and Ethical Practices Professional solicitors are required to disclose: Their status as a professional or paid solicitor. The true name of the fundraiser and the charitable organization. Upon request, provide the most recent financial report and registration of the organization within 15 days. (S.C. Code § 33-56-90) Misrepresentation or misleading practices during solicitations are strictly prohibited, with fines of up to $2,000 per violation. (S.C. Code § 33-56-120) Enforcement and Penalties The Secretary of State’s Office has the authority to investigate any charitable organization or fundraiser for violations of the Act. This includes issuing subpoenas, conducting audits, and requiring the production of documents. (S.C. Code § 33-56-140) Penalties for noncompliance include: Administrative fines of up to $2,000 for late filings or non-disclosure. Suspension of registration. Injunctions sought through the Administrative Law Court. Organizations or fundraisers may appeal fines and sanctions through the Administrative Law Court. Conclusion The Solicitation of Charitable Funds Act underscores the importance of ethical practices, transparency, and accountability in charitable solicitations. Nonprofits, professional fundraisers, and commercial co-venturers operating in South Carolina must navigate these regulations carefully to maintain compliance. For legal guidance on charitable registration, compliance, or fundraising practices, Twisdale Law, PC offers comprehensive services tailored to nonprofits and fundraising professionals. Contact us today to ensure your organization or fundraising campaign meets South Carolina’s legal requirements. Receive the latest news in your email Subscribe today You have been successfully Subscribed! Ops! Something went wrong, please try again. Table of Content What is a Charitable Organization? Registration Requirements for Charitable Organizations Exemptions from Annual Registration Professional Fundraisers and Solicitation Standards Registration and Reporting Obligations Disclosure and Ethical Practices Enforcement and Penalties Conclusion Related articles All Posts Business Case Law Mergers & Acquisitions North Carolina Business Patents South Carolina Business Tennessee Business Trademark Patents Plant Patents: Protecting New Plant Varieties Under U.S. Law July 2, 2025 Business Understanding the Differences Between an S Corporation and a C Corporation July 1, 2025 South Carolina Business Understanding the South Carolina Solicitation of Charitable Funds Act: A Guide by Twisdale Law, PC June 23, 2025 Case Law When Reaction Goes Too Far? Ethan Klein’s Lawsuits Against Kaceytron and Denims Raise Big Questions for Streamers June 23, 2025 Trademark Municipal Trademarks: How Cities Are Using the USPTO to Protect Their Brands March 25, 2025 Case Law The Thaler v. 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Navigating Mergers in South Carolina: A Guide by Twisdale Law, PC
Mergers can offer significant opportunities for business and nonprofit organizations in South Carolina, providing a pathway to consolidate resources, expand operations, or adapt to market conditions. However, South Carolina law establishes specific procedures and requirements for mergers, depending on the type of entities involved. This article provides an overview of the merger process and special considerations for entities operating in the Palmetto State. Types of Entities Eligible for Merger Under South Carolina law, a business corporation may merge with or into various types of entities, including: Another business corporation, whether domestic or foreign. A nonprofit corporation, provided the board of directors of each corporation adopts, and the shareholders or members approve, the plan of merger. A limited liability company (LLC), whether domestic or foreign. A partnership, whether domestic or foreign. A limited partnership, whether domestic or foreign. Each merger must follow the requirements set forth in the South Carolina Code, ensuring compliance with legal standards and protecting the interests of shareholders, members, and stakeholders. The Plan of Merger The foundation of any merger is the Plan of Merger, which must detail the following: The name of each entity involved and the name of the surviving entity. The terms and conditions of the merger. The manner and basis of converting shares of a business corporation into other shares, obligations, securities, membership interests, cash, or property. When applicable, the Plan of Merger must also address: Amendments to the governing documents of the surviving entity, such as articles of incorporation or partnership agreements. Any other provisions relevant to the merger. These details provide clarity and structure to the merger process, ensuring all parties understand their roles and outcomes. Special Rules for Parent-Subsidiary Mergers For parent corporations owning at least 90% of the outstanding shares of a subsidiary, South Carolina law allows a streamlined process without requiring shareholder approval. The parent corporation’s board of directors must adopt a Plan of Merger that includes: The names of the parent and subsidiary corporations. The manner and basis of converting the subsidiary’s shares into securities, obligations, or other forms of consideration. The parent corporation must mail a copy or summary of the Plan of Merger to each subsidiary shareholder who has not waived this requirement. For non-public corporations, the parent may not file Articles of Merger with the Secretary of State until at least 30 days after the mailing. Filing Articles of Merger Once the Plan of Merger is approved, the surviving or acquiring entity must file Articles of Merger with the South Carolina Secretary of State. These articles must include: The approved Plan of Merger. A statement that shareholder approval was not required, if applicable. For mergers requiring shareholder approval, detailed voting records, including the number of votes cast for and against the plan and confirmation that the plan received sufficient approval. The merger becomes effective upon the filing date or a later effective date specified in the Articles of Merger. Effects of a Merger When a merger takes effect: All entities except the surviving entity cease to exist. The surviving entity assumes ownership of all real estate and property without reversion or impairment. All liabilities of the merged entities transfer to the surviving entity. Ongoing legal proceedings involving a merged entity may continue as if the merger had not occurred, or the surviving entity may be substituted. The governing documents of the surviving entity are amended as provided in the Plan of Merger. Shareholders or members receive the rights specified in the Plan of Merger. Special Considerations for Nonprofits Nonprofit mergers in South Carolina require additional steps to protect public interests. Public benefit and religious corporations may only merge with: Other public benefit or religious corporations. Foreign corporations that qualify as public benefit or religious corporations. Business or mutual benefit corporations, provided the nonprofit is the surviving entity and remains a public benefit or religious corporation. In certain cases, the approval of the Richland County Court of Common Pleas and notice to the Attorney General are required. Additionally, assets of public benefit or religious corporations must be transferred in compliance with their charitable purpose, and detailed notice must be provided to the Attorney General at least 20 days before the merger’s consummation. Real Property Considerations If a nonprofit corporation involved in a merger owns real property in South Carolina and changes its name due to the merger, it must file a notice with the register of deeds in the county where the property is located. The filing can include: An affidavit with the old and new names of the corporation. A certified copy of the amended articles or articles of merger. A deed of conveyance reflecting the name change. This ensures record notice under South Carolina law and avoids potential title issues. Why Work with Twisdale Law, PC? Mergers involve complex legal and procedural requirements that demand careful planning and execution. Twisdale Law, PC offers expert legal guidance to businesses and nonprofits navigating mergers in South Carolina. Whether you’re a corporation planning to merge with another entity or a nonprofit seeking to preserve its mission during a merger, Twisdale Law, PC provides tailored legal solutions to meet your needs.Contact Twisdale Law, PC today to ensure your merger is executed smoothly and in full compliance with South Carolina law. Receive the latest news in your email Subscribe today You have been successfully Subscribed! Ops! Something went wrong, please try again. Table of Content Types of Entities Eligible for Merger The Plan of Merger Special Rules for Parent-Subsidiary Mergers Filing Articles of Merger Effects of a Merger Special Considerations for Nonprofits Real Property Considerations Why Work with Twisdale Law, PC? 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Dissolving a Nonprofit Corporation in South Carolina: A Guide by Twisdale Law, PC
Dissolving a nonprofit corporation in South Carolina is a process governed by specific legal requirements outlined in the South Carolina Nonprofit Corporation Act. Nonprofit organizations, particularly public benefit and religious corporations, have additional obligations to ensure compliance with state laws and proper handling of assets during dissolution. Below, Twisdale Law, PC provides a step-by-step guide to help nonprofits navigate this process. Filing Articles of Dissolution The first step in dissolving a nonprofit is preparing and filing the Articles of Dissolution with the South Carolina Secretary of State. The Articles must include an affidavit affirming that the person executing the document has the authority to do so, as required under S.C. Code § 33-31-1404. This affidavit ensures that the dissolution is being carried out by an authorized individual, such as a board member or officer of the nonprofit.Additionally, nonprofits must notify the South Carolina Attorney General’s Office of their intent to dissolve. This notification must be made on or before the date the Articles of Dissolution are filed. A copy of this notice must also be included in the Articles of Dissolution when submitted to the Secretary of State. This dual notification ensures that the state is aware of the dissolution and can oversee the proper distribution of assets. Asset Transfers and Attorney General Approval For public benefit and religious corporations, the distribution of assets comes with additional oversight. According to state law, no assets may be transferred until one of the following conditions is met: 20 days have passed since notice was provided to the Attorney General’s Office, or The Attorney General’s Office has given written consent to the dissolution. This waiting period or written consent ensures that the nonprofit’s assets are distributed in compliance with its charitable purpose and legal obligations. Once most or all of the nonprofit’s assets have been transferred, the board of directors must provide the Attorney General’s Office with a detailed list of asset recipients. This step ensures transparency and accountability in the asset distribution process. Practical Considerations Nonprofits should carefully plan their dissolution to avoid unnecessary delays or complications. This includes: Preparing all required documentation, including the affidavit, notification to the Attorney General, and the Articles of Dissolution. Ensuring compliance with restrictions on asset transfers, especially for public benefit and religious corporations. Maintaining accurate records of all asset transfers and recipients. Twisdale Law, PC Can Help The process of dissolving a nonprofit can be complex, particularly for public benefit and religious corporations that must navigate stringent asset distribution rules. Twisdale Law, PC offers comprehensive legal services to guide nonprofits through the dissolution process. Our expertise in nonprofit law ensures that your organization meets all legal requirements and protects its legacy during dissolution. Contact Twisdale Law, PC today to discuss your nonprofit’s needs and ensure a smooth and compliant dissolution process. Receive the latest news in your email Subscribe today You have been successfully Subscribed! Ops! Something went wrong, please try again. Table of Content Filing Articles of Dissolution Asset Transfers and Attorney General Approval Practical Considerations Twisdale Law, PC Can Help Related articles All Posts Business Case Law Mergers & Acquisitions North Carolina Business Patents South Carolina Business Tennessee Business Trademark Patents Plant Patents: Protecting New Plant Varieties Under U.S. Law July 2, 2025 Business Understanding the Differences Between an S Corporation and a C Corporation July 1, 2025 South Carolina Business Understanding the South Carolina Solicitation of Charitable Funds Act: A Guide by Twisdale Law, PC June 23, 2025 Case Law When Reaction Goes Too Far? Ethan Klein’s Lawsuits Against Kaceytron and Denims Raise Big Questions for Streamers June 23, 2025 Patents The Patent Application Process June 18, 2025 South Carolina Business Navigating Mergers in South Carolina: A Guide by Twisdale Law, PC June 16, 2025 South Carolina Business Dissolving a Nonprofit Corporation in South Carolina: A Guide by Twisdale Law, PC June 9, 2025 Trademark Municipal Trademarks: How Cities Are Using the USPTO to Protect Their Brands March 25, 2025 Case Law The Thaler v. Perlmutter Decision: What It Means for AI, Copyright, and Your Business March 19, 2025
How to Establish a Nonprofit in South Carolina: A Guide by Twisdale Law, PC
Creating a nonprofit in South Carolina is a structured process governed by the South Carolina Nonprofit Corporation Act (“Act”), codified under S.C. Code § 33-31-101 et seq. This Act assigns the South Carolina Secretary of State the responsibility of handling the necessary filings for forming nonprofit corporations. Below is an overview of the steps and legal requirements involved in establishing a nonprofit in South Carolina. Filing Articles of Incorporation The Articles of Incorporation serve as the foundational document for any nonprofit corporation in South Carolina. These articles must be submitted to the Secretary of State’s Business Filings Division and include essential information such as the corporate name, registered office and agent, and the classification of the corporation as a public benefit, mutual benefit, or religious organization.Public benefit corporations are defined under S.C. Code §§ 33-31-201 through 33-31-207 and are typically charitable organizations. Mutual benefit corporations, also defined in the same provisions, serve their members rather than the public. Religious corporations are created primarily for religious purposes. The Articles of Incorporation must also indicate whether the nonprofit will have members, provide the principal office address, and include provisions for asset distribution upon dissolution.The Secretary of State charges a $25 filing fee, and the Articles must be filed in duplicate. Optional provisions, such as specific operational clauses, may be included under S.C. Code § 33-31-202(c). For detailed filing instructions, refer to the template provided by the South Carolina Secretary of State. Tax-Exempt Status While forming a nonprofit corporation is a state process, obtaining tax-exempt status is a federal matter. Nonprofits seeking 501(c)(3) status from the IRS must ensure their corporate purpose and dissolution provisions align with IRS requirements. Filing IRS Form 1023 or 1023-EZ is the next critical step after incorporation to secure tax exemption. Bylaws: The Nonprofit’s Governance Blueprint South Carolina law requires nonprofit corporations to adopt bylaws under S.C. Code § 33-31-206. While these bylaws are not filed with the Secretary of State, they play a crucial role in governing the internal operations of the nonprofit. At a minimum, bylaws should address the organization’s name and purpose, details about membership (if applicable), and the structure of the board of directors, including their responsibilities and terms of service. Additionally, bylaws should outline procedures for holding meetings, electing officers, and managing financial matters, such as budgeting and fiscal oversight. A well-drafted conflict-of-interest policy is essential to ensure directors and officers act in the organization’s best interests. Procedures for amending bylaws and dissolving the organization should also be included. Together, these elements create a roadmap for the nonprofit’s governance and decision-making. Practical Steps for Forming a Nonprofit The process of forming a nonprofit involves several clear steps. First, prepare the Articles of Incorporation using the state-provided template or a custom draft that meets the legal requirements. Submit two copies of the Articles to the Secretary of State along with the $25 filing fee. If applicable, political associations must also submit a CL-1 form and an additional $25 fee. Next, adopt bylaws to establish governance practices and ensure compliance with state laws. Once these foundational documents are in place, apply for federal tax-exempt status by completing IRS Form 1023 or 1023-EZ. This ensures your nonprofit can access the tax benefits associated with 501(c)(3) status. Compliance and Ongoing Obligations After incorporation, nonprofits must comply with state and federal requirements to maintain good standing. This includes maintaining accurate financial records and adhering to the purpose of the nonprofit. Nonprofits should also review and update their bylaws periodically to reflect changes in operations or legal requirements. Establishing a nonprofit in South Carolina involves navigating both state and federal requirements, but the process is straightforward with careful planning. For tailored legal advice or assistance with forming your nonprofit, reach out to Twisdale Law, PC. Twisdale Law, PC is a boutique law firm for business law and intellectual property, including nonprofit formation and compliance, and can provide the expert guidance you need to ensure your organization is set up for long-term success. Receive the latest news in your email Subscribe today You have been successfully Subscribed! Ops! Something went wrong, please try again. Table of Content Filing Articles of Incorporation Tax-Exempt Status Bylaws: The Nonprofit’s Governance Blueprint Practical Steps for Forming a Nonprofit Compliance and Ongoing Obligations Related articles All Posts Business Case Law Mergers & Acquisitions North Carolina Business Patents South Carolina Business Tennessee Business Trademark Patents Plant Patents: Protecting New Plant Varieties Under U.S. Law July 2, 2025 Business Understanding the Differences Between an S Corporation and a C Corporation July 1, 2025 South Carolina Business Understanding the South Carolina Solicitation of Charitable Funds Act: A Guide by Twisdale Law, PC June 23, 2025 Case Law When Reaction Goes Too Far? 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Setting Up an LLC in South Carolina
Setting Up an LLC in South Carolina Creating an LLC in South Carolina is a straightforward process that provides liability protection and a flexible management structure. Here’s how to get started, based on South Carolina’s Uniform Limited Liability Company Act. S.C. Code § 33-44-101 et seq. 1. Choose an LLC Name Your LLC’s name must be unique and must include “LLC,” “Limited Liability Company,” or an appropriate abbreviation as required by S.C. Code § 33-44-105. The name must be distinguishable from other business names in South Carolina. 2. File Articles of Organization To form your LLC, file Articles of Organization with the South Carolina Secretary of State. According to S.C. Code § 33-44-203, this document should include: LLC’s name Designated office and agent information Organizer(s) details Optional details about management structure and liability 3. Appoint a Registered Agent Per S.C. Code § 33-44-108, your LLC must designate a registered agent to receive legal documents on behalf of the business. This agent can be an individual resident of South Carolina or a registered business entity. If you do not have one, or wish to remain anonymous, you may reach out to Twisdale Law, PC who can act as your Registered Agent. 4. Pay the Filing Fee There’s a filing fee associated with submitting the Articles of Organization, which may vary. Ensure timely payment to avoid delays in processing. Twisdale Law, PC can assist with the LLC setup process and provide guidance on compliance with South Carolina law. For expert legal support, contact us to ensure your business is legally and operationally secure from day one. Receive the latest news in your email Subscribe today You have been successfully Subscribed! Ops! Something went wrong, please try again. Table of Content Setting Up an LLC in South Carolina 1. Choose an LLC Name 2. File Articles of Organization 3. Appoint a Registered Agent 4. Pay the Filing Fee Related articles All Posts Business Case Law Mergers & Acquisitions North Carolina Business Patents South Carolina Business Tennessee Business Trademark Trademark Municipal Trademarks: How Cities Are Using the USPTO to Protect Their Brands March 25, 2025 South Carolina Business Setting Up an LLC in South Carolina February 17, 2025 Trademark How to Challenge a Pending Trademark Application? January 18, 2025