How to Start a Daycare in South Carolina: DSS Center License vs Family Home Registration

If you want to open a daycare in South Carolina, the first decision is not the building, the name, or the business plan. It is which category the South Carolina Department of Social Services (DSS) places your program in. That category sets your capacity limit, whether you need a license or a registration, what oversight you face, and how much paperwork you will carry. This guide covers how to open a daycare in South Carolina from that first decision through opening day.

This article is informational content, not legal or tax advice. Child care rules and local ordinances change. Confirm every requirement below with DSS, your city or county, and a qualified attorney or CPA before you sign a lease or buy equipment.

The short answer: which DSS category fits you

Section 63-13-20 of the South Carolina Code sorts child care programs into categories. For a new operator, three of them matter most:

Category	Who it serves	Where it operates	DSS status
Child care center	13 or more children	Non-residential space	License
Group child care home	7 to 12 children	The operator's residence	License
Family child care home	Up to 6 children, counting the caregiver's own and related children	The operator's residence	Registration (licensing is optional)

Two definitions change the math. First, DSS treats care as "regular" when it happens more than 2 days a week. Second, a program running 4 hours a day or less is not child care under the statute. A program that runs 5 hours a day, five days a week, is generally child care unless another exclusion applies, such as a school vacation day camp run in sessions of less than three weeks. A 3-hour enrichment class that meets twice a week may not be.

A family child care home counts every child in the home toward the limit of 6, including your own and related children. If you have two children of your own at home, you can care for no more than four other children under that category. If you expect more children than that, the group home or center categories apply.

Some programs sit outside normal oversight. A church-run center or group home that takes no state or federal child care funds may operate under the exemption, with limited DSS oversight. It may also elect licensing. Taking state or federal child care funds removes the exemption, so decide before you apply for subsidy payments.

Licenses now run 3 years, under 2024 Act 216. Plan your renewal calendar from the start, not when the first renewal notice arrives.

Materials and documents you need before you start

• A chosen business name, plus a backup in case the first is taken
• A business entity decision: sole proprietorship, LLC, or corporation
• An Employer Identification Number (EIN) from the IRS
• A site with proof that the use conforms to local zoning (required at licensing under 63-13-90)
• Your local business license, where your city or county levies one
• A floor plan, a list of indoor and outdoor play areas, and a site address for DSS and your zoning office
• Background check paperwork for staff and anyone else DSS requires (63-13-40)
• Written policies on enrollment, emergencies, discipline, medication, meals, and parent communication
• A budget that covers insurance, equipment, deposits, and several months of operating costs
• An account on Business Entities Online at businessfilings.sc.gov if you form an LLC or corporation

Step 1: Count the children you will have at one time

Start with the maximum number of children you expect to have in the building or home at once, not the total number of children you will enroll over a year. Enrollment often runs well above daily attendance, so plan for the peak. Then ask DSS how it counts your own children and any related children living with you. Your answer decides whether you apply as a family child care home, a group child care home, or a center.

Write the number down with the schedule: hours per day, days per week, and any seasonal programs. Those three facts decide whether DSS oversight applies at all.

Step 2: Confirm whether the exemption could apply

Check the 4-hour rule and the exemption for church-run and non-funded programs before you pay for anything. If your program is short and infrequent enough to fall outside the definition, you may not need a DSS license or registration. Do not assume that. Get a written answer from DSS, and keep a copy in your business file.

If you plan to accept child care subsidy payments or any other state or federal child care funds, the exemption will not apply. Plan for licensing or registration from day one.

Step 3: Choose your business entity and file if required

A sole proprietorship or general partnership does not file organizing documents with the Secretary of State. An LLC or corporation does, and the choice affects liability, taxes, and paperwork.

For an LLC, file Articles of Organization for a domestic limited liability company (S.C. Code Section 33-44-203). The filing fee is $110. The name must include the words "limited liability company" or "limited company," or an abbreviation such as LLC, L.L.C., LC, or L.C. The name must also be distinguishable from other registered names on the Secretary of State's records. You can reserve a name for 120 days, nonrenewable, for $25. Every LLC must maintain a registered agent in South Carolina with a street address for service of process (33-44-108). A standard LLC not taxed as a corporation files no annual report and pays no annual fee.

For a corporation, file Articles of Incorporation for a domestic business corporation (S.C. Code Section 33-2-102) with the $110 filing fee. File Form CL-1, the Initial Annual Report of Corporations, with its one-time $25 License Fee within 60 days of doing business or using capital in South Carolina. Corporations also file an annual report as part of the SC1120 or SC1120S with the SC Department of Revenue. Corporate tax and filing questions belong with a CPA.

A Secretary of State filing is not a business license. Registering the entity does not satisfy the local license requirement described in Step 5. The Secretary of State is online at sos.sc.gov.

Step 4: Clear zoning before you sign a lease

Zoning is the step most new operators get wrong, and it is the one that costs the most to fix after the fact. DSS requires proof of zoning conformity at licensing (63-13-90), so you need an answer from the local government before you commit to a site.

Call the zoning office for your address and ask three things: whether a child care use is permitted at this address, what home occupation rules apply if you operate from a residence, and what paperwork the office will issue to confirm conformity. If you lease, add a contingency that lets you exit if the answer is no. If you live in a community with an HOA or deed restrictions, read those documents too.

Step 5: Get your local business license

South Carolina has no general statewide business license. Local business license taxes are levied by most cities and by only nine counties: Beaufort, Charleston, Dorchester, Horry, Jasper, Marion, Orangeburg, Richland, and Sumter. Check with your city and county, even if you think yours does not levy the tax.

Where the tax applies, the license year runs from May 1 to April 30, and the license is due April 30. Renewals are processed at localblrenewal.com. Confirm the fee and the application with the office that issues your license, because the amount varies by locality.

South Carolina also has no state DBA filing. If you will operate under a name other than your legal name or LLC name, show that trade name on your local business license where one is required. There is no separate county or municipal DBA filing. Then list the same trade name on your IRS EIN application and your SCDOR Business Tax Application.

Step 6: Get your EIN and state tax registrations

Apply for an EIN with the IRS before you open a bank account for the business, and before you hire anyone. Register with the South Carolina Department of Revenue (SCDOR) through the Business Tax Application on MyDORWAY, at dor.sc.gov.

A daycare that only provides care does not need a retail license. If you sell tangible goods, such as snacks, supplies, or branded clothing, you need an SCDOR Retail License. That is a one-time, nonrefundable $50 fee per location, applied for through the Business Tax Application. Confirm with your CPA whether any sales in your program fall under that rule, and how your payroll and withholding should be registered.

Step 7: Plan background checks and hiring

DSS requires background checks for staff and certain other people, under Section 63-13-40. The statute and DSS rules decide who must be checked, what the check includes, and when a person may have contact with children. Ask DSS in writing which individuals must clear a check before they start, and what documents the applicant or your program must submit.

Build that timeline into your hiring plan. A teacher you recruit in August may not be able to start on the day you planned to open. Do not place any person in a child care role until DSS confirms the required checks are complete for that person.

Step 8: Sort out the kitchen and meal service

Meals served to children are inspected under DSS rules. Whether your kitchen also needs a separate retail food permit is a separate question. Check with DSS and the South Carolina Department of Agriculture (SCDA) at agriculture.sc.gov. Retail food permits in South Carolina come from SCDA, not from DHEC, so do not call DHEC for that answer.

Ask both agencies what a food-prep area needs, whether you can use a commercial dishwasher or sink setup you already have, and whether a home kitchen can serve as the child care kitchen. Get the answers in writing before you buy equipment or remodel.

Step 9: Apply to DSS and prepare for inspection

The application path depends on your category. A center or group child care home applies for a license. A family child care home registers with DSS, and licensing is optional. Ask DSS for the current application forms, any application or license fees, the inspection sequence, and the expected timeline, because those details are not stated here and can change. Do not schedule a lease start date, hiring date, or enrollment launch around an assumed approval date.

Before the inspection, make sure your file contains your zoning proof, your background check records, your written policies, your floor plan, your emergency plan, and proof of your business entity and local license where applicable. Walk the space as an inspector would: exits, outlets, medication storage, first aid supplies, and outdoor play areas.

Step 10: Set up insurance, records, and enrollment

Speak with an insurance agent about general liability coverage and any coverage specific to child care, before you enroll your first child. Insurance requirements can come from your landlord, your lender, or your local government, not only from DSS. Keep signed enrollment forms, emergency contacts, immunization records, and parent agreements in a secure system. Set a calendar reminder for the 3-year license renewal and for the April 30 local license deadline if your locality levies that tax.

Common mistakes to avoid

• Counting enrolled children instead of children present at one time. Your category depends on the peak number, not the roster.
• Signing a lease before zoning is confirmed. Zoning proof is required at licensing, and a denial after you pay rent is expensive.
• Treating a Secretary of State filing as a business license. The filing creates the entity. It does not authorize you to operate in your city or county.
• Assuming an LLC must file an annual report. A standard LLC not taxed as a corporation files no annual report and pays no annual fee in South Carolina.
• Claiming the exemption while accepting child care funds. State or federal child care funds remove the exemption.
• Assuming a short program is always exempt. The 4-hour rule applies to programs of 4 hours a day or less, and a program that runs longer or meets more often is child care.
• Calling DHEC about your kitchen. Retail food permits come from SCDA.
• Hiring before background checks clear. Plan the calendar around the checks, not the other way around.

What results to expect

A complete, accurate application may help the process move forward, but DSS controls the timing and the decision. No one can promise an approval date, a specific number of enrolled children, or a particular level of income. Many operators find the first year is slower than planned because staffing, inspections, and parent enrollment each take longer than expected. Build a reserve that covers slow enrollment, and treat your projections as estimates to revise, not guarantees.

When to bring in a professional

Talk to a South Carolina attorney before you sign a commercial lease, form an LLC or corporation with co-owners, or accept funds from a partner. Talk to a CPA about entity tax treatment, payroll, and whether a retail license applies. The South Carolina Small Business Development Centers can help you organize a plan and budget at no cost to you, though they do not give legal or tax advice.

Disclaimer

This article is informational content about starting a child care business in South Carolina. It is not legal, tax, or insurance advice, and it does not replace the guidance of DSS, the Secretary of State, the SCDOR, the SC Department of Agriculture, or your local government. Requirements change. Confirm every item in this guide with the responsible agency before you act on it.