How to Get Started with DBA vs LLC for Executives in Chicago
The small business owners who are starting in Chicago have a crucial decision to make: DBA or LLC2 min read
The small business owners who are starting in Chicago have a crucial decision to make: DBA or LLC? Doing Business As (DBA) vs limited liability company (LLC) are both good choices for business protection and organization. But their features and regulations for entrepreneurs to consider vary greatly. Making the right decision involves understanding what differentiates these two entities, as well as understanding what is important to the owner in terms of liability protection and taxation.
If you are a small business owner in Chicago, operating as a legal business entity can be an important step for your business. Understanding the differences between DBA and LLCs is essential to make informed decisions. There are many factors to consider when determining which entity will work best for your business.
A DBA is a business structure created to do business under an assumed or fictitious name, or to correct the legal name of an existing business. A DBA is not a separate legal entity and does not protect personal and business assets from liability and taxation. There is no minimum capital requirement for a DBA, and the same rules apply to both individuals and legal entities.
An LLC is a legal business structure that provides owners with limited liability protection and some flexibility when it comes to taxation and other regulations. An LLC is a separate legal entity, which means that the LLC’s assets and liabilities are distinct from those of its owner. LLCs also limit personal liability of the owners, meaning that the owners will not be held financially liable if the business has debts or is sued.
When comparing the two, the biggest difference between DBA and LLC is that a DBA does not provide any form of personal liability protection. On the other hand, LLCs do provide limited liability protection and more options for taxation. DBA’s are also easy to set up, usually requiring little more than filing the necessary paperwork with the state. LLCs, on the other hand, generally require a more detailed set up process and more stringent regulatory requirements.
When making the decision between DBA or LLC, it is important to consider different factors, such as your business’s needs, long term goals, and your personal risk tolerance. If you are located in Chicago and need help deciding which business entity to choose, the UpCounsel team can help.
UpCounsel connects entrepreneurs and business owners with the trusted legal professionals they need to help them navigate the complicated legal issues that arise with a business. Whether you need a one-time consult or an entire freelance legal department, UpCounsel’s network of experienced lawyers has you covered. From small businesses to Fortune 500 companies, pioneering companies of all sizes trust UpCounsel and its attorney community to provide high quality, cost-effective legal services. Access to high quality attorneys on demand, friendly and knowledgeable customer service, and the most competitive rates available. With UpCounsel, you get peace of mind knowing that your legal needs will be taken care of expertly and promptly.
Topics:
