If you are doing LLCs in the U.S. or planning to register your business by giving it a unique name, then you are in the right place. Forming an LLC can provide you with lots of benefits. But this will be more beneficial when you can conduct multiple businesses under the same entity. Isn’t that exciting?
But to take advantage of this exciting opportunity, you must file a DBA for your LLC. A DBA can relieve the many stresses of conducting your LLC business.
In this blog, we will help you by enlightening your basic knowledge of LLC DBA.
What Is Doing Business As (DBA)?
The word “DBA” stands for doing Business As, also known as an assumed business name. This is usually a separately registered name or nickname that businesses use for branding, marketing, and conducting business. When a business decides to operate under a different name than its legal name, it’s called a DBA, or Assumed Business Name. This is also known as a Fictitious Business Name or trade name in some states.
How Does a DBA Work Under an LLC?
If you are a non-resident or if you are already doing business in the U.S., then you must register a DBA to launch different product lines or businesses under the same umbrella, especially in the case of LLCs. Filing a DBA means you can do business under a name other than your LLC. Now have a look at how a DBA operates under an LLC structure:
Understanding of LLC DBA
First, you must understand the whole concept. If you are operating a business or planning to start one, you already know that every business has an official or legal name. Regarding limited liability companies, corporations, or other types of business structures, businesses use the name mentioned in the legal documents, like articles of organization or articles of incorporation, during the formation.
Now you may be wondering what this DBA we are talking about is. Let’s clarify that.
Any other name used for business purposes instead of a legal name is known as a “fictitious name” or “doing business as.” For example, if you are a non-resident in the U.S. and want to operate in New York, you will need a fictitious name with the Department of State.
DBA is used for operating a business under a separate name that is not their partner’s or individual’s personal name. Businesses that are already established as LLCs are treated as separate legal entities distinct from their owners and can operate additional lines of business under a different name without organizing a new legal entity by using a DBA. This especially benefits businesses seeking to increase their product lines or enter new markets.
Formation of an LLC
Before setting up a DBA under an LLC, you must form the LLC first. This includes choosing a unique name, filing the required documents with the eligible registered state agent, and paying the required fees. The LLC provides personal liability protection to its owners (called members) by separating personal and business assets.
Registration for a DBA
Once the LLC is formed, you can register a DBA if you wish to conduct business under a name different from the legal name of the LLC. Check the specific requirements of your state or local jurisdiction regarding DBA registration.
Conducting Business Under DBA
Once the DBA is registered, you can operate the business and sign contracts using the DBA name. You can open bank accounts, brand your business, and receive payments using the DBA name.
Legal and Tax Considerations
While operating as an LLC DBA, you should remember that it doesn’t provide liability or personal asset protection. Your business is responsible for taxes, liabilities, contracts, and other legal obligations. Moreover, it’s necessary to ensure that your registered DBA complies with the state’s laws and regulations.
Please remember that the rules and regulations about how a DBA works under an LLC can vary from state to state. So it’s best to take suggestions from any legal business expert.
Examples of LLC DBA
An LLC with diverse business activities may use DBAs to operate different divisions under separate names from the legal entities while maintaining the overall legal business protection and structure of the LLC. If you want to do business under a name other than the one on your company’s formation document after you form your LLC, you must file the appropriate form and documents to register your “doing business as” name.
- For example, you decide to turn Yum Burgers into an LLC, and it’s doing so well that you plan to expand into soft drinks. You want to stay under “Yum Burgers LLC” but also wish to do business under “Yum Shakes.”
A DBA helps differentiate the businesses without creating various corporate structures in this situation. Because Yum Shakes is just one of the LLC’s assets, if something goes wrong with it, the assets of the Burgers Company are also at risk. If you wanted to separate the liability, you’d have to open another LLC.
The correct legal presentation of a DBA under an LLC is for the fictitious name to come after the registered name of the business, such as,
- If you formed your business as an LLC called “Maxwell’s IT LLC” but did not operate it under its legal name, you may need to register a DBA to operate under “Maxwell’s IT” without the word “LLC.”
DBA VS. LLC
Most people confuse the business structure “LLC” with the trading name “DBA.” They think both are the same, which is not true. There are a few differences between these two:
LLC, short for Limited Liability Company, protects your personal assets from any business liabilities like a fortress. It’s like having a superhero cape that shields your car, home, and favorite collection of bobbleheads from potential harm.
On the other hand, Doing Business As a name is your confidential identity in the business world. It allows you to operate under a different name, giving you the flexibility to brand yourself creatively and leave a lasting impression on your customers. So, whether you’re “Superstar Sweets LLC” baking mouthwatering pastries or “Tech Wizards LLC” conjuring up innovative gadgets, the DBA is here to add that extra sparkle to your brand.
How to Do DBA Registration
With an LLC DBA, you’ll unlock a world of possibilities, whether you are a resident or non-resident of the United States. It’s like having the key to a magical portal where you can expand your business as a non-resident, protect your interests, and project an image that captures the essence of what you’re all about.
But to enjoy these benefits, you must register a DBA name for your LLC by following a certain process. Here are a few steps you can follow to register your DBA with LLC:
- Research the State’s or County’s Regulations: Registering DBAs for LLCs can vary based on different requirements from state to state. So need to know the necessary requirements of the state in which your business will be operated.
- Contact with the State Office: Then, you should talk to the Secretary of State’s office where your LLC is registered. Be sure that the DBAs are filed at the county level or the state level. If the DBAs are handled at the county level, you must call the county clerk’s office for filing forms and instructions.
- Choosing a Name: Then, you need to choose a name that is a different name than your legal name. According to jurisdictional laws, your chosen name should reflect your company’s branding.
- Check the Availability: Your name should be different, catchy, memorable, and unique. Check the availability of your name with the help of any registered agent within the state.
- Gather Required Documents: Once you are sure about the availability of your selected name, gather the required documents that you need to establish your eligibility to do business as a non-resident.
- Complete Forms: To register a DBA, you must now complete the forms that the county clerk’s office or the Secretary of State’s office will provide for you.
- Announce the Public Notice: Before submitting the registration, you might check whether you need to announce the public notice because some states require public announcements to notify the state population during DBA registration.
- Submit the Registration: Once your necessary paperwork is completed, submit the registration form and the required fees.
- Once you submit the registration form, you need to follow up with the state’s office to confirm if your DBA name is registered.
We understand it’s difficult to file or register for the DBA, especially if you are a newbie in entrepreneurship or doing business in the U.S. as a non-resident. Therefore, we suggest you consult with a professional and experienced business attorney. You can get your DBA done by providing some necessary information through Business Globalizer. We have years of experience. You can save time by giving us the responsibility for filing the DBA for your LLC in the U.S.
DBA Under LLC Pros and Cons
Now that you know how to register for the DBA, you must know the pros and cons of the LLC. We understand how it impacts you when you do anything without acquiring proper knowledge. We shouldn’t make any decisions by following the trend or hearing others’ opinions without proper research.
Here are some pros to obtaining a DBA for your LLC, such as :
- Multiple Business: With the help of DBA, you can do more than one business without having established a separate LLC.
- Opening a Business Account: Many banks require a DBA for opening a business bank account. So LLC owners should have registered a DBA before applying for a business bank account.
- Privacy: If the LLC owner wants to maintain some privacy and not have their personal name associated with the business, a DBA can provide a layer of anonymity by using a different business name.
- Flexibility and Branding: A DBA enables an LLC to establish a unique brand identity separate from its legal name
There are some disadvantages, along with pros, to registering a DBA under an LLC, such as:
- Limited Liability Protection: One of the key disadvantages is that even though you need to register a DBA for your LLC, this doesn’t provide the same level of liability protection. If your business faces legal issues or financial obligations, you may be personally liable for any debts or legal claims.
- Limited Scope: A DBA is typically valid only within a specific jurisdiction or geographic area. If the LLC plans to expand nationally or internationally, it may need to register the DBA separately in each desired location, incurring additional costs and administrative burdens.
- Compliance and Administration: A DBA may require additional paperwork and administrative tasks, such as filing for a “Fictitious Business Name” or “Assumed Name” with the appropriate local or state authorities. This can add complexity and ongoing compliance obligations for the LLC.
- Restricted Business Activities: Depending on local regulations, there may be limitations on the types of business activities that can operate under a DBA. Certain industries or professions may require specific licenses or permits that are only available to formal legal entities.
DBA Under LLC Pros and ConsDo I Need a DBA for My LLC?
Have you ever wondered why you need a DBA for your LLC? Why do business legal experts suggest you register the DBA for LLC? There are specific reasons you should get a DBA, such as:
- If you plan to form any more businesses under the same LLC, a DBA can help you operate multiple businesses under the same roof. You don’t have to form a separate entity for that.
- If you are conducting LLC business as a non-resident, you can enjoy specific legal protections. But these protections could fail if you conduct your LLC under a different name and don’t file for a DBA.
For example, John Watson wanted to keep his assets protected, so he formed an LLC instead of doing business under his own name as a Sole Proprietorship. He makes an LLC named “JW Enterprises LLC” but wants to do business as “John’s Antique Shop.” So, his LLC files “John’s Antique Shop” as a DBA name. Therefore, “JW Enterprises LLC” and “John’s Antique Shop” are the same.
- Choosing a name for your company will give you marketing advantages as the DBA name better describes your industry, provides local resonance, or ranks higher in the alphabet in directories like the phone book or web directories.
Let’s say your LLC’s official name is “Texas Beverage Outlets LLC,” but if you plan to open a store in Dallas, you might want to call it “Dallas Beverage Outlet” instead. The full name of your business would then be “Texas Beverages Outlets LLC, DBA Dallas Beverage Outlet.”
- Additionally, if you purchase a franchise as a business owner, the franchisor offers the franchisee specific trademark rights. Also, when you want to borrow the names of popular local brands, you will need DBA. It’s typical for franchisees to form an LLC to secure their personal assets. You have to operate under the franchise name.
So, for instance, if you decided to invest in the Crunchy Cookies franchise, you would first create an LLC (for instance, “TRE Holdings LLC”) and then register a DBA called “Crunchy Cookies” with your state or county.
Can I Use a DBA for My LLC?
Yes, you can. There are about 900 places where DBAs can be filed or registered. Some states and counties don’t let LLCs and DBAs have “identical” names. So, if you want to file a DBA for your LLC, you have to make a call to the State or county where your business is formed.
Furthermore, if you want to open multiple branches or businesses officially under the same business structure or want to avoid using your personal name, you can use a DBA for your LLC.
Maintaining DBA with LLC
Now that you know the meaning of DBA and the process of filing a DBA, your work isn’t done yet. Once your DBA is filed, you have to do fewer things to protect your DBA name after the registration. You need to apply for a trademark for your LLC and file annual reports that include updated information about the company, such as its members, managers, and registered agents. Ensure that you file these reports by the required deadlines to maintain good standing.
Depending on your jurisdiction, a DBA may have an expiration date or need to be renewed after a certain period. Be aware of the renewal requirements and file the necessary paperwork to keep your DBA active. If you fail to maintain these, you may be fined, or another business may claim your DBA name. Moreover, you shouldn’t use your DBA name when signing a contract. This can go against the laws of your state.
FAQs
Q1: Do I need a DBA if I use my own name?
Answer: If you use your own legal name, DBA isn’t necessary in most cases.
Q2: How do I know if my DBA was approved?
Answer: By consulting a business legal attorney, you can be sure your DBA is approved.
Q3: Where do I register for a DBA?
Answer: You can register your DBA with the help of any business legal expert or Business Globalizer.
Q4: How much does it cost to start a DBA?
Answer: It depends on the state where your business will be formed and the legal service.
Bottom Line
Well, folks, that’s the lowdown on registering a DBA for your LLC. We hope this short, all-in-one guide has made the process a little less daunting and a lot more fun. So go ahead, unleash your creativity, and let your LLC’s new identity shine. The world is waiting for your DBA to make its grand entrance!
