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AI Still Makes Things Up: Why Professionals Must Remain the Experts

April 30, 2025/in Business Law, Criminal Law, Estate Planning, Real Estate Law, Resources

Artificial intelligence is a powerful tool, a great staring point to starting a project or an article for social media, but we must remember that it isn’t infallible. We should still check to see if the information it provides is reliable.

A recent legal research experience reminded me that diligence and human judgment remain essential in the age of AI.

I recently used artificial intelligence to assist with legal research. I was working on a matter involving South Carolina property law and asked the AI to identify case law about the possibility of changing ownership from Tenants in Common to Joint Tenants with Rights of Survivorship, post death of the parties, if the deed, when signed, was signed with a misunderstanding as to type of ownership. The AI returned what looked like a legitimate and useful citation: Durham v. Blackard, 255 S.C. 202, 177 S.E.2d 601 (1970).

It even provided a case summary: (This portion is from my conversation with the chatbot)

I took out the parts where I ask it nicely to perform a function. My wife likes to make fun of me for saying please and thank you to the AI. I tell myself, politeness doesn’t cost anything, but in reality, when the AI takes over the world and comes for us, I know it’s going after the rude ones first.

“Facts: Parties sought reformation of a deed due to mutual mistake.

Holding: Reformation was allowed only upon clear and convincing evidence that the deed failed to reflect the parties’ true intent.”

Unfortunately, the case didn’t exist. There is a Durham v. Blackard, but it’s a 1993 decision involving fraudulent conveyance under the Statute of Elizabeth. It has nothing to do with mutual mistake at the time of signing the deed.

I brought up the fake case and the made-up content to the AI and it gave me another case. Creekmore v. Redick, 246 S.C. 423, 143 S.E.2d 251 (1965). The summary it produced sounded plausible and relevant, claiming the case dealt with a mistaken property description and supported deed reformation.

But once again, I could not locate any such case in South Carolina’s reported decisions. The case was simply fabricated, citation, summary, and all. Here is the AI’s response when I once again informed it that it made up a case.

“Apologies for the earlier citation errors. Upon further review, I found that the case Creekmore v. Redick does not exist in South Carolina case law. I regret any confusion caused by these inaccuracies.”

This experience underscores a reality that many professionals are beginning to discover: AI can still make things up. It will confidently produce answers that look right, sound authoritative, and might even contain accurate legal principles, but unless you already know the area well, it can be nearly impossible to spot where the technology fabricates.

This is particularly dangerous in a field like law, where the foundation of our work is truth, precedent, and precision.

Artificial intelligence can be a useful starting point for organizing thoughts, identifying issues, or framing arguments, but be cautious about trusting it to finish the job. It is not a substitute for subject matter expertise.

As professionals, we cannot blindly accept what AI gives us. We must remain vigilant, verify sources, and apply our judgment. We are the subject matter experts, not IT.

This Is How to Start a Business in South Carolina

June 8, 2021/in Resources, Uncategorized

Have a great idea for a startup but not sure where to start?

Starting your own business is an exciting adventure! Starting your business in South Carolina offers many business benefits. These include business tax credits and a fast-growing population.

Learning how to start a business in South Carolina can feel like an overwhelming process. There are many steps you’ll follow to ensure your business is legal and safe to operate.

By following this guide, you’ll learn how to safely and legally start your business off on the right foot.

How To Start a Business In South Carolina

The first step to starting any business type is having an idea of what kind of business you want to start. When starting a business, think about your natural abilities, interests, and personal interests.

Choosing a business idea that you’re passionate about will keep you motivated and make your business a success! A few ideas could be starting a clothing boutique, local marketing firm, or a cafe.

With your idea fresh in your mind, consider drafting a business plan. A business plan can show you your business’s profitability based on startup costs, strategies, and the competition. Starting your business plan now will help you when you start looking for investors.

Register a Business Name

Choosing a name for your business is the fun part. You’ll want to choose a name that’s different from other businesses already filed with the South Carolina Secretary of State (SOS). Research your business name ideas on the SOS website to find which ones are available.

General partnerships and sole proprietorships have the option of registering their name with a South Carolina DBA. Many banks will require you to register your business name before allowing you to open a bank account.

Corporations and LLCs will need unique names. Both need filing with South Carolina before they can open their doors.

To protect your business’s name and any slogans, you may want to consider a trademark. A trademark will legally protect your business’s name and prevent others from using it. You will need to contact or research the USPTO or US Patent and Trademark Office to find which names have trademarks and trademark yours.

Do you plan on creating a website for your business? Consider a business name that’s unique to use as the domain name.

What’s Your Business Structure?

Businesses come in many different structures and entities, including proprietorships, partnerships, LLCs (Limited Liability Company), corporations, and many more. Here’s a brief breakdown of the most common structures:

Sole proprietorship: no state filing required to start a business, but the sole owner is responsible for every aspect of the business
General partnerships: Two or more people doing business together who are responsible for the entire business; there’s also no state filing
Corporation: business is separate from owners and offers liability protection to the owners
LLC: easy to operate but offers liability protection to the owner and tax flexibility

You will need to further research the business structure options available before starting a company. Depending on your business, you may wish to have the liability side of it off your shoulders.

Request an EIN

An EIN is an Employer Identification Number issued to businesses by the IRS (Internal Revenue Service). The EIN is a 9-digit identification number used for a business’s for tax purposes, such as payroll taxes and tax returns.

Not all South Carolina businesses need an EIN. All sole proprietorships, LLCs, corporations, and partnerships with employees will need an EIN.

LLCs and sole proprietorships with only one member and no employees do not need an EIN. The owner’s social security number can also work as the business’s tax identity.

Filing for an EIN is quick and easy. You can file online through the IRS website and receive your EIN immediately. If you prefer the old-fashioned way, you can request an EIN via mail or fax.

Find Funding

Many businesses will require some form of funding before opening their doors. You’ll need a business plan detailing your business idea’s startup costs and profitability before requesting funding. A few funding options include:

Bootstrapping: funding the business from your personal accounts
Friends and Family: potential lenders to assist with your business adventure but make sure to write a written agreement
Small Business Grants: industry-specific grants for your business you don’t need to pay back
Small Business Loan: offered by banks and other money lenders, these are loans you will need to pay back but offer a great source of capital
Crowdfunding: funding coming from a variety of people and investors
Venture Capital Firms: Investors looking for fast ROI (return on investment), best for businesses expecting a rapid amount of growth
Angel Investors: Investors looking for ROI but more willing to invest in riskier businesses

Having more details regarding your business plan and idea will make finding funding easier. Most banks, investors, and others don’t want to invest in a business with little potential to offer an ROI.

Apply For Business Licenses, Permits, and Insurance

The type of business you have will dictate what licenses and permits you will need to open your business in South Carolina legally. Check the federal, state, and local requirements to make your business legally compliant.

Business insurance is necessary to protect both you and your business. Insurance options to consider include General Liability, Professional Liability, and Workers’ Compensation Insurance. You will need to determine which insurance type is best for your business.

Set Up Accounting

Almost every type of business should open a separate bank account and request a separate credit card. This will keep the finances of your business separate from your own finances. If you’re not fluent in business accounting and bookkeeping, consider working with a business accounting service.

What’s Your Business Idea?

What’s more exciting than turning your business idea into a reality?

Learning how to start a business in South Carolina is fun and exciting. By following this guide, you’ll start your South Carolina small business on the right foot.

Have questions or need help with the legal side of your South Carolina business? Send us a message. Our attorneys are happy to help you with any legal questions and concerns you have with your new business.

Registering for and Filing Income Tax Withholding in South Carolina

March 7, 2017/in Business Law

South Carolina business owners must take several steps to get their businesses off the ground. They must choose a location for their business and they must obtain financing. They must choose a business entity, such as a limited liability company or a partnership, and they must register a business name. And, of course, the business must register for state and local taxes.

Withholding Tax

Withholding tax is taken out of wages. The withholding tax goes toward the total annual income tax liability. Employers that hire South Carolina employees must issue a return to the South Carolina Department of Revenue for the taxes that have been withheld.

First, the business owner should complete Form SCDOR-111, which is the Business Tax Application. After this form is completed, the business owner will be able to move forward with a number of steps, such as registering for a retail license. After completing the Business Tax Application, the business owner will also be able to register for income tax withholding. Once the application is completed, the business will receive a withholding file number. The business owner will reference the withholding file number in all correspondence and when making payments. It must also be referenced when the business owner calls the Department of Revenue.

Tax Payments

The method of payment varies depending on the amount of withholding tax the business is filing. For those whose withholding tax is more than $15,000 during a quarter, or that make more than 24 payments each year, the business must pay online. These businesses must also submit the Withholding Tax Coupon, Form WH-1601. For businesses that must pay less than $15,000 per quarter, payment may be submitted voluntarily online.

W2 forms for employees are due by January 31 following the tax year. So for tax year 2017, W2s are due by January 31, 2018. These may be submitted online.

As for filing the returns, businesses must file a withholding quarterly tax return (form WH-1605) for the first three quarters of the year. At the end of the fourth quarter, a withholding fourth quarter and annual reconciliation return, WH-1606, must be filed.

Tax Deadlines

These returns are due on April 30, July 31, October 31, and January 31. It is very important to meet these filing deadlines. If a business misses one of the withholding tax deadlines, the business may be subjected to penalties.

As of January 1, 2017, the South Carolina Withholding Tax Tables have been updated for the first time in 25 years. The withholding tax tables will also be updated every year beginning with 2017. It is very important that business owners use the new tables to ensure they are submitting the proper amounts. These tables, along with the withholding tax formula, are available at the South Carolina Department of Revenue website, www.dor.sc.gov.

How business attorneys can help with registration and filing

Navigating the websites of South Carolina’s governmental agents is not always easy. There are dozens of forms online, and it is not always clear which ones you need to use. With the assistance of a business attorney, you will ensure that you are taking the proper steps to launch your business and meet state tax requirements. Rather than risk being subjected to penalties, it is better to seek the guidance of an experienced attorney who understands applicable laws and regulations.

Let our business attorneys advise you

At the De Bruin Law Firm, our attorneys are experienced in helping businesses register for state and local taxes and filing those taxes. To schedule a free consultation with our attorneys, call 864-982-5930 or visit debruinlawfirm.com.