Key Takeaways

  • An LLC is a legal entity that offers liability protection, while a DBA is an alias for doing business under a different name and offers no liability protection.
  • You can operate a DBA under an LLC, allowing you to use multiple business names under one legal entity.
  • Registering a DBA is typically simpler and cheaper than forming a new LLC.
  • Reasons to file a DBA include rebranding, market targeting, or offering new products under a different name.
  • Requirements for DBAs vary by state, and missing renewal deadlines could result in name loss.

Starting an LLC with DBA is generally more affordable and easier to maintain a good standing than most business structures. But whether an LLC or DBA is best depends on several factors.

LLC Versus DBA

A limited liability company (LLC) is a separate legal entity with many benefits, including:

  • Personal liability protection for the LLC's owners, who are referred to as members.
  • The name of the company being its legal name when conducting business.
  • Expanding, selling the business, or seeking funding is easier with an LLC.

If you plan to hire employees or there's a possibility of liability, an LLC offers greater protections than a DBA.

DBA stands for “doing business as,” and it refers to conducting business under an assumed name. For example, if you are a freelancer and operate a website, a DBA allows you to conduct business under your domain name instead of your personal name. Essentially, you can use a fictitious name legally to conduct business.

A DBA alone will not provide the same benefits of an LLC. Instead, a DBA will:

  • Leave the individual who registered the DBA open to liability.
  • Not be considered a separate legal entity.

However, there are benefits to using a DBA. For starters, once you conduct business under an assumed name, you can then incorporate that name.

Financially speaking, it's also cheaper to conduct business as a DBA rather than an LLC, even though starting an LLC is more affordable than establishing a corporation. DBAs are only subject to two fees: 

  • The initial registration fee
  • A renewal fee. 

The renewal fee frequency varies by state, but it is typically every five years. LLCs, by contrast, must pay state taxes, which are more expensive.

If you have a sole proprietorship and don't want to incorporate your business, you can choose a DBA in order to brand your name and promote yourself without having to deal with LLC requirements. Moreover, LLC formalities, such as agreements and bylaws, are not imposed on DBAs. The biggest concern is that DBAs do not have the same liability protections as LLCs.

When to Use a DBA With an LLC

Using a DBA (Doing Business As) under an LLC can be especially helpful in scenarios such as:

  • Operating multiple business lines: You may want to sell products under distinct brand names while maintaining a single LLC for legal and tax purposes.
  • Rebranding or marketing: A DBA can make your brand more relevant to a target audience or specific locality. For instance, “West Coast Coffee LLC” could register a DBA like “Seattle Brew Co.” to better appeal to local customers.
  • Expanding into new regions or industries: If your LLC's original name no longer aligns with your new offerings or location, a DBA allows you to adapt without creating a new legal entity.

While a DBA offers flexibility, it doesn't replace the legal protections or structural benefits of an LLC. Businesses should carefully evaluate whether they need a new DBA or a separate LLC when entering a new venture.

Filing a DBA as an LLC

As a legal entity, an LLC has its own obligations and rights separate from its members, while a DBA does not have these rights. Whoever uses a “doing business as” name assumes all business obligations, but it is possible to use a DBA as an LLC.

Each state has unique laws regarding business formations and maintenance. For example, once you file LLC paperwork with the state, you must abide by the state's LLC naming requirements before the name is approved. As an LLC, your business can conduct its activities and provide products or services as its legal name.

Since a DBA is not a legal name, it's merely an assumed name under which a business participates in activities such as buying or selling goods and services. To use a DBA, you must register the “doing business as” name with the state, regardless of whether you are conducting business as a sole proprietor or an LLC.

If you already own an LLC and you register a DBA, your LLC has the right to conduct business using both the LLC's legal name and the “doing business as” name. However, you must take action to maintain your LLC and DBA names according to the requirements of your state.

For example, most states require LLCs in good standing to file documents periodically, such as a Biennial Report in Iowa or an Annual List in Nevada. Failing to file these documents can result in penalties and your LLC forfeiting certain rights.

Since a DBA is only valid for a set period of time and must be renewed on occasion, you can lose the name if it expires and another business takes it.

One of the main reasons for forming an LLC is to protect your personal assets from the business's own liabilities and obligations. If you do use a DBA alongside your LLC, make sure you do not confuse the two, as there are specific instances when you should use the LLC's legal name. Since a DBA doesn't provide personal liability protections in any sense, you could leave yourself liable for debts if your business documents use the DBA when the LLC name would have been appropriate.

Steps to Ensure DBA Compliance for LLCs

To legally operate a DBA under your LLC, follow these compliance steps:

  1. Verify name availability: Check your state's business name database to ensure your desired DBA isn’t already taken or too similar to another business.
  2. File with the correct agency: Depending on your state, DBAs may be filed at the state, county, or even city level.
  3. Pay required fees: Expect to pay a one-time registration fee and a renewal fee (typically every 1 to 5 years).
  4. Publish a notice if required: Some states (e.g., California, Florida) require public notice of the new DBA in a local newspaper.
  5. Renew on time: Mark your calendar with your renewal deadline to avoid losing rights to your business name.
  6. Keep records updated: If your LLC address, ownership, or structure changes, you may need to update your DBA filing.

Failing to adhere to these requirements can jeopardize your legal standing, branding rights, and customer trust.

How to Add a DBA to an LLC

Determine where you need to file a DBA and obtain the fictitious name form from your state agency. Simply fill out the form and file it along with the required fee.

Common Mistakes When Using a DBA With an LLC

Avoid these frequent errors when managing your LLC with a DBA:

  • Using the DBA as if it were a separate legal entity: Always clarify that the DBA is part of the LLC. Contracts and invoices should reference the LLC's full legal name (e.g., “ABC Enterprises LLC, DBA Tech Solutions”).
  • Failing to register the DBA properly: Operating under an unregistered DBA can lead to fines or the inability to enforce contracts in court.
  • Overlooking renewal deadlines: Lapsed DBA registrations can result in losing the right to your name, especially if another entity registers it.
  • Skipping a trademark search: Registering a DBA does not protect the name from trademark infringement claims. It's advisable to conduct a trademark search before committing to a name.
  • Neglecting local requirements: Some counties or cities have separate or additional DBA registration rules beyond the state level.

Maintaining both your LLC and DBA in good standing ensures brand consistency and protects your legal and financial interests.

Frequently Asked Questions

  • What is the difference between an LLC and a DBA?
    An LLC is a separate legal entity that provides liability protection. A DBA is simply a registered name that an LLC or sole proprietor can use to do business under a different name.
  • Can I have multiple DBAs under one LLC?
    Yes, many states allow you to register multiple DBAs under a single LLC, which is useful for managing different brands or services without forming separate companies.
  • Do I need a new EIN for my DBA?
    No. A DBA does not require a new EIN if it operates under the existing LLC. The EIN is tied to the LLC, which remains the legal entity.
  • Does a DBA provide liability protection?
    No. A DBA is not a legal entity and does not shield personal assets. Liability protection comes from forming and maintaining an LLC or corporation.
  • How long does a DBA registration last?
    DBA validity varies by state, typically lasting 1 to 5 years. You must renew it to retain exclusive rights to use the name.

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