DBA vs. LLC: What’s the difference?
A “doing business as” (DBA) name allows your business—whether it’s an LLC, C corp, S corp, or sole proprietorship—to operate under a legally registered nickname. DBAs are also known as a “trade name” or “fictitious business name.” Read on to learn how they are related:
Doing Business As (DBA)
Ease and affordability
If you want to register a business name without forming a formal business entity like an LLC, a DBA is a simple way to achieve that.Expansion and personalization
A DBA allows you to customize your business name based on location. For instance, if you own several ice cream shops in different towns, each shop can be branded with the name of its respective town.Easy upkeep
A DBA typically only needs to be renewed every few years, making it an excellent choice for business owners who want an official business name without the ongoing maintenance required for an LLC.Limited Liability Company (LLC)
Protect your personal assets
Forming an LLC and keeping your personal finances separate ensures that your personal assets are shielded from business liabilities.Tax flexibility
You have the flexibility to choose your tax structure—whether as an LLC or a corporation—allowing you to optimize savings and reduce tax liability.More maintenance
While LLCs have less complex record-keeping requirements compared to other business entities, they still require more ongoing maintenance than a DBA, including annual filings and reports.DBA vs. sole proprietorship: What you should know
There are several important differences between a DBA and a sole proprietorship.
Keep your private life separate
Registering a DBA name lets you promote your business while protecting your privacy by minimizing the use of your personal legal name in everyday transactions.
Branding and marketing
A DBA makes branding simpler. By registering a DBA, you can choose a name that clearly reflects and promotes the product or service you’re offering.
Increased legitimacy
Establishing a DBA name enhances your business’s credibility, and the best part is, it doesn’t require a significant investment.
Open a bank account
To open a business checking account, many banks require sole proprietorships to have a DBA name rather than using the owner’s personal name.
Frequently asked questions
There are initial filing and renewal fees, which can vary depending on the business type and state. However, since a DBA is not a formal business structure, it typically does not involve ongoing annual fees or filing obligations.
You can look up DBA requirements in your state or contact the state agency where your LLC is registered. Once you know the correct process, you may be able to register your DBA online. You will need to provide your LLC’s official name and the fictitious name you’d like to use. Keep in mind that there are often restrictions that prevent you from using a DBA that’s identical or too similar to one already registered.
Yes. If you want to use more than one DBA, you’ll need to file a separate registration for each name.
No, an EIN is not required for a DBA. Whether you need one depends on the structure of your business.
In most states and counties, DBAs must be renewed every 5 to 10 years. However, some states, such as Indiana, Iowa, and New York, do not have an expiration date for DBAs.
A DBA does not provide liability protection. To obtain liability protection, you must form an LLC, corporation, or nonprofit.
You will need to follow the standard process of registering your business with the state, which includes conducting a name search to ensure that no other business has the same name. A DBA does not guarantee that the name you choose will be available for your business entity.