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E-Mail 'What is a DBA (Doing Business As) and How to Register One' To A Friend

Q: How long does a DBA (Doing Business As) Last?

A DBA typically lasts as long as the business is in operation, but it can be renewed at any time if needed. Generally, a DBA will remain in effect until the business owner decides to end it or until there are changes made to the name or the state laws that require a renewal of registration.

Q: How do taxes work with a DBA?

Taxes for a DBA can vary depending on the type of entity or if you’re operating your business in multiple states. Generally, DBAs registered as sole proprietorships are subject to self-employment taxes, while DBAs that are corporations or limited liability companies (LLCs) may be eligible for different tax treatments. It is important to consult with a tax professional to determine the best option for filing any taxes associated with a DBA.

Q: Can I use the same DBA as someone else?

No, it is not possible to have two businesses with the same DBA. The name chosen must be available and not infringe on any other existing businesses’ names. Before registering a DBA, it is important to check with the Secretary of State in your state that the name you desire has not been taken. The secretary of state’s website will also typically provide guidelines for completing the registration process.

Q: What is the difference between DBA and LLC?

The main difference between a DBA and an LLC is the type of legal structure they provide. A DBA is used to register a business name under an individual, allowing them to use that name for their business. An LLC provides more formal legal protection and structure than a DBA does. With an LLC, liability is limited to the assets of the business and not the personal assets of its owners, while DBAs provide no such protection.

Q: Do you need a business bank account to apply for a DBA?

No, you do not need a business bank account to apply for a DBA. The registration process can be done online and will typically require providing proof that the name is available in your state. Once the paperwork is approved, you may open a business bank account if necessary.

Q: Is LLC better than DBA?

It depends on the individual’s needs and goals. An LLC provides more formal legal protection and structure than a DBA, while liabilities are limited to the assets of the business rather than personal ones. LLCs must also file annual reports and pay taxes in most states, while DBAs typically do not have such obligations. Therefore, an LLC may be better for certain types of businesses compared to a DBA. Either way, make sure to close an inactive business to avoid any potential confusion or legal issues.

Q: What is a DBA example?

If your company’s official legal business name is XYZ Enterprises LLC but you want to open a liquor store under the name ABC Liquor Store, you can register the DBA ABC Liquor Store. This would allow you to use the DBA for business transactions and documents without having to change your legal business entity name.

Q: How do I transfer my DBA to an EIN?

Once a business has a tax ID, the small business owners may decide to operate under one or several DBAs (Doing Business As). Regardless of whether taxes are paid through an SSN or EIN (Employer Identification Number), these DBAs are essentially nicknames for the existing business and therefore don’t require separate tax IDs.

Q: How much does a DBA cost?

The cost of registering a DBA varies from state to state but is typically less than $100. Some states may also require additional fees for registering at the county level, so be sure to research your own state before beginning the registration process. Make sure to also do proper research if you’re planning to register your business in another state. Having a small business compliance checklist may be helpful.

Q: Is a DBA a business entity?

No, a DBA is not its own legal business structure or entity. It simply allows the owner to conduct business under a name that is different from the one they would normally operate with. For example, getting certified as a women-owned business or applying for certain grants may require a DBA, as many of these programs have specific criteria that must be met.

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