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DBA in South Carolina
Entrepreneurs looking to grow their businesses in the Palmetto State need more than just good products and services to offer their clients. They also need good business names.
Business names are largely affected by a company’s actual structure. Sole proprietorships and general partnerships, for example, are required to use their owners’ legal names for the business. On the other hand, LLCs and corporations default to the legal name used to register the entity when they were formed.
That said, businesses can use what is known as a “DBA” to use any name they want for their venture. If you’re a South Carolina-based entrepreneur who wants to use a better name for your business, you’ve come to the right place. Let’s talk about DBAs in the state.
Definition
What Is a DBA?
A DBA, which stands for “doing business as,” is an alias or alternative name businesses can use in place of their legal names. These names can be used to present the business to potential customers, but the business will still be registered in the state of South Carolina using its legal name.
South Carolina refers to DBAs used by sole proprietorships and general partnerships as “assumed business names” and those used by corporations and LLCs in South Carolina as “fictitious business names.” They’re the same, however—aliases businesses use for their own benefit.
Advantages
What Are The Advantages Of A DBA In South Carolina?
Speaking of benefits, DBAs offer a variety of advantages to businesses in South Carolina. Here’s a quick look at the benefits:
Branding becomes easier
DBAs are primarily used to help business owners establish their brands. This is especially obvious for sole proprietors because they will use their legal names without assumed business names.
A sole proprietor named Charlie Smith, for example, can make a better impression for his peach cobbler business if he uses the assumed business name “Southern Peach Cobblers” than when he uses his own name on the signages. The same principle applies to LLCs and corporations, as they can establish their brands using fictitious business names more easily.
Increased privacy
Business owners benefit from the added layer of privacy that a DBA provides. Consider the sole proprietor of a spicy condiments store, Janet Brown. Instead of putting her name on posters, flyers, and other promotional materials to market her products, she can just use an assumed business name, “Carolina Reaper Hot Sauce.” Brown’s business still uses her legal name but operates under another name.
Better diversification
Fictitious business names help entrepreneurs and their companies diversify and expand their offerings to more customers. This is especially seen in bigger companies looking to offer a variety of brands.
A South Carolina food and beverage company named “South Carolina Good Foods LLC,” for instance, can open different shops to offer local delicacies. Some examples include “Carolina Thunder Chickens” for a venture selling turkey in various forms, “Great with Grits” for foods normally served with the South Carolinian staple; and “Southern Sweets” for a dessert business focused on desserts like the Huguenot Torte, apple and peach cobblers, cakes and so on.
Banking made easier
South Carolina doesn’t require all businesses to have DBAs, but banks do. This is so businesses can use them to have separate bank accounts from their owners’ personal ones. Having separate bank accounts for business and personal use helps you avoid mishandling your funds.
Disadvantages
What Are The Disadvantages Of A DBA In South Carolina?
While DBAs offer many benefits to businesses in South Carolina, they do have some limitations. And although these downsides are not serious, they could be disadvantageous if entrepreneurs don’t know how to handle them. Here’s a quick look at the limitations of a DBA in South Carolina:
Not separate entities
DBAs are not entities separate from the business they are used for. They are mere aliases or alternative names you can use in lieu of your business’ legal name. This means that if lawsuits are filed against the venture using a DBA, the main business that owns the DBA will be the one receiving the impact of the legal action.
No protection for personal assets
Unlike LLCs and corporations, DBAs do not provide personal asset protection for their owners in the event that the business using them gets sued for valid cases such as negligence. As such, sole proprietors and general partnerships cannot expect their DBA to protect them from lawsuits. These businesses must get insurance.
Names must meet state standards
South Carolina has some naming standards for DBAs. This means that while these assumed business names can be as unique and creative as possible, they are limited by some restrictions.
DBA Formation
How To Get A DBA In South Carolina
Now we proceed to the actual process of getting a DBA for your business in South Carolina. The process is easy and straightforward. Here’s what you need to do.
If your business is a sole proprietorship or general partnership:
Search for your DBA’s availability
First, come up with a unique name and search it in the South Carolina Existing Business Entity database if it’s available. Registering a DBA in the state does not prevent other businesses from using a similar name. What matters is that your name meets the naming standards and is available for use.
File with your County Clerk in South Carolina
Next, once you verify that your DBA name is available and eligible, you need to contact your County Clerk to register it. Each county has its own forms that you need to complete and their respective filing fees. You might need to visit them in person to claim your Certificate of Assumed Name form.
Notarize your Certificate
After applying for your DBA and paying the required filing fee, you will need to have your Certificate of Assumed Name form notarized. Some counties notarize the certificate for free, so make sure to check. South Carolina requires all sole proprietorships and some partnerships to have this certificate notarized.
If your business is an LLC, LLP, or Corporation:
Search for your DBA’s availability
Search for your preferred DBA in the South Carolina Existing Business Entity database to check if it’s available. Registering a DBA does not prevent other LLCs and incorporated businesses from using a similar fictitious name. What matters is your name meets the naming standards and is available for use. Still, it’s better that yours be as unique as possible.
File with the South Carolina Secretary of State
Next, after verifying that your name is available, complete the Adopting a Fictitious Name form and submit it to the South Carolina Secretary of State online. Do this, along with paying the required filing fees. You don’t need to notarize the document you used to file your DBA.
Costs
How Much Is A DBA In South Carolina?
South Carolina DBAs are affordable, although the price depends on your business structure. For sole proprietorships and partnerships, the cost of filing a DBA depends on the county where the business operates. Check with your County Clerk for actual costs.
For LLCs, LLPs, and corporations, the filing fee is $10 per DBA. South Carolina’s fictitious business names last for five years and must be renewed. Renewal costs $10 per fictitious business name.
Summary
An assumed business name or fictitious name for your business in South Carolina is easy to get and affordable. While a DBA does not protect your personal assets, it allows you to hide your personal information from customers. It also allows you to establish your brand easier, expand your offerings, and leave a good impression on customers. If you’re an entrepreneur looking to do business in South Carolina, apply for a DBA now. You will benefit from it.
FAQ
Frequently Asked Questions About A DBA
Here are the most commonly asked questions about forming a DBA:
Yes. There are no limits to the number of DBAs you have as long as you follow the correct process when registering them and pay the required filing fee. You also have to maintain and renew them before they expire.
It depends on your business structure. If your business is a sole proprietorship or partnership, the time it takes to process your DBA depends on your County Clerk’s office.
If your business is an LLC, corporation, or LLP, the South Carolina Secretary of State can process your DBA in 24 hours.
No. South Carolina DBAs are only meant to let businesses operate using an alias. While they provide a layer of privacy, they cannot prevent courts from requiring entrepreneurs to pay fines for court losses using personal assets. LLCs and corporations provide such protections even without DBAs, so sole proprietors and partnerships should get insured to protect their personal assets.
No. DBAs are not separate business entities and are non-taxable anywhere in the U.S.
South Carolina requires DBAs to avoid including the following to be approved:
- Business suffixes (LLC, LLP, Inc., Corp.) and indicators (Corporation, Incorporated). These are not allowed unless they’re your business’ actual structure.
- Words normally used by government agencies such as “State Department,” “Treasury,” and “FBI.” This is to avoid confusing your business with these agencies.
No. You cannot make any changes or amendments to your existing DBA, regardless of business structure. However, you can register a new DBA with the state to make changes to your Certificate of Assumed Business Name.
Yes. Sole proprietorships and partnerships need to contact their County Clerk to withdraw or cancel their DBA. On the other hand, LLCs, LLPs, and corporations need to fill out the correct form and submit it to the Secretary of State.