Can An LLC Have A Dba: Everything You Need to Know
The meaning of the abbreviation DBA is Doing Business As. In the United States, the purpose of a DBA is to allow the public to know the identity of a business's real owners. 3 min read
"Can an LLC have a DBA" is a question that many business owners contemplate when choosing a name for an LLC. Most LLC owners would agree that choosing a name is the most important step of forming an LLC.
What Is a DBA?
The meaning of the abbreviation DBA is Doing Business As. In the United States, the purpose of a DBA is to allow the public to know the identity of a business's real owners.
A DBA refers to a name used by a company. This name is different from the company's legal name. The company uses the DBA to do business.
A common misconception is that a DBA is a legal entity. The truth is that any party that uses a DBA is still responsible for assuming the business's obligations.
Many people refer to the DBA as an assumed business name or fictitious business name. Some refer to the DBA as a trade name. The DBA originated as a way to protect consumers. Prior to DBAs, dishonest business owners would use different names to do business to avoid getting into legal trouble.
When an individual files for a DBA, the filing is circulated through a print newspaper. The purpose of circulating the DBA is to allow the community to know who is running a business.
State law governs the use of the DBA. In some states, a business isn't allowed to use the same DBA as another business.
Reasons Why A Business In The U.S. Will Need To Get A DBA
A sole proprietor will need to file for a DBA if the name of their business is different from their own name. For example, if you start a restaurant called "Food for Thought," you will need to file a DBA for "Food for Thought."
If your business is an LLC or corporation, you don't need to file for a DBA. This is because you've already had the name of your business registered. However, if you want to do business with a name other than the name you used to file your paperwork, you will need to file for a DBA.
For example, if you used the name "Food for Thought" when forming an LLC or corporation and you want to do business under the name "FoodforThought.com," you will need to file for a DBA.
No matter how small of a change you make to the original name, you will need to file for a DBA. The only exception to this rule is if you add a description of the business's product or service to the original business name.
When Do You Not Need a DBA?
If the name of a sole proprietorship is Jane Doe's Food for Thought, you probably won't need a DBA. However, if the name of the sole proprietorship includes just your first name, then you will need to file for a DBA.
The Importance of a DBA
The best option for registering for a name for a sole proprietorship is filing for a DBA. Not only is filing for a DBA simple, but it is also an inexpensive process.
Keep in mind that it is not necessary to form a corporation or LLC to form a separate and professional business identity.
Sole proprietorships need a DBA to do the following:
- Open an account with a bank
- Receive payments in the business's name
If you want to expand your business into a number of different stores, services, websites, and restaurants, you have the option of using a generic name to create a corporation. Then, you can file for a DBA for each of the individual businesses. This approach will help you reduce both paperwork and expenses if you're working on more than one project.
A business that is a corporation or an LLC enjoys a number of legal protections. However, these protections may not apply if you choose to operate under a name that is different from the original name and you failed to get a DBA for your business. For example, contracts signed with a name different from the original name may not be held up in court.
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