Free South Carolina Convertible Promissory Note Forms

South Carolina Convertible Promissory Note Overview

A convertible promissory note in South Carolina is a debt instrument commonly used in startup financing that converts into equity upon a triggering event. As a security, it must comply with both federal regulations (SEC Rule 506 under Regulation D) and South Carolina's state securities laws. The primary state exemption is: Section 35-1-202 exemption.

South Carolina requires Form D filing required when issuing convertible notes. The state provides standard protections for note holders through its securities regulatory framework. The interest rate must comply with South Carolina's 8.75% usury limit, though most convertible note rates (2-8%) fall well below this threshold. Companies should work with an attorney familiar with South Carolina securities law to ensure full compliance.

South Carolina Requirements

South Carolina has specific requirements for convertible promissory notes that both parties should understand before entering into the agreement.

• Interest Rate: Must not exceed South Carolina's usury limit of 8.75%
• Written Agreement: Must be in writing and signed by the borrower (maker)
• Clear Terms: Principal amount, interest rate, payment schedule, and maturity date must be clearly stated
• Default Terms: Late fees, grace periods, and acceleration clause must comply with South Carolina law
• Governing Law: The note should specify South Carolina as the governing jurisdiction

How to Create a South Carolina Convertible Promissory Note

Follow these steps to create a South Carolina-compliant convertible promissory note using our template.

Securities Compliance in South Carolina

When issuing convertible promissory notes in South Carolina, you must comply with the state securities exemption (Section 35-1-202 exemption), file the required Form D filing required, ensure the interest rate stays within the 8.75% usury limit, and follow South Carolina's investor protection requirements (standard protections). Federal Form D must be filed with the SEC within 15 days of the first sale. Our South Carolina-specific template ensures compliance with both state and federal securities regulations.

South Carolina Convertible Promissory Note FAQ

Answers to common questions about convertible promissory notes in South Carolina.

Official South Carolina Resources

Use these official resources to verify South Carolina requirements for your convertible promissory note.

Other South Carolina Promissory Note Types

Need a different type of promissory note for South Carolina? We offer state-specific templates for every type of promissory note.