Can You Register A Dba That Is Similar To Existing Business Name

Many small business organization owners looking for alternatives to forming an LLC often come across DBAs ("Doing Concern As"), also known equally a fictitious business organisation proper name or trade name. While a DBA may be right for your business, it's important to understand how they work and when to employ them.

What Is a DBA or Fictitious Concern Name?

A DBA is frequently used past sole proprietors who desire to operate their business organisation nether a business name that is different from their private name. In most states, registering a DBA name gives your business concern the ability to use a fictitious concern proper name; however, keep in listen that a DBA name is non the same equally a legal business organisation entity and information technology does not give you the aforementioned limited liability or legal protections as an LLC or other corporate structure for your business.

Why Use a Fictitious Business Proper name?

At that place are two master situations where business owners would desire to utilise a fictitious concern proper name or DBA:

• Sole Proprietor or Partnership:If you are a sole proprietor or cofounder of a partnership and you lot desire to do business with a name that is different from your personal name, you tin annals a DBA name. This gives your business a marketing identity that is separate from your personal proper noun, merely it's not the same as a corporate structure in the eyes of the law.
• Corporation or LLC:If you already have ready a business construction and incorporated, but you desire to apply a different business name other than the name of your corporation (for case, yous operate in multiple states and want to utilise those states as part of your business organisation name), you can register a fictitious business name for this purpose.

Pros and Cons of Using a DBA

In that location are many reasons to employ a DBA for your business, and they offer a lot of benefits. Information technology's of import to keep in mind though, that a DBA doesn't replace the benefits you get with a legal business entity. But, when used in conjunction with your legal structure, a DBA can assistance your business grow and thrive.

DBA Upsides

• Makes Your Business organisation Name Official: DBAs tin give your business added brownie, particularly for sole proprietors who don't want to use their own name. It helps separate you from your business, and gives you a name you tin employ to market it.
• Helps Expand Your Business: Consider the example above. Allow'south say you operate flower shops in Minnesota and Wyoming. Y'all want to market the business to customers in those states, and aid them understand where and how to find your services. So your business, "Blooms past Barb," can operate every bit both, "Blooms by Affront - Minnesota," and, "Blooms by Barb - Wyoming."
• Makes You Hyper-Localized: Many DBAs are filed at the canton level, and then if you operate your concern in multiple locations within your land, you lot tin can give each location its own name using a DBA. This is a groovy option for brick-and-mortar businesses that want to be a thriving part of their local communities.
• Tin be Used in Conjunction with Your LLC: If yous've already formed an LLC, y'all tin can still take reward of a DBA to operate your business nether different names. That way, you can market each private proper noun, while still benefiting from the liability protection of your LLC.

DBA Downsides

The downsides of a DBA mostly occur when they are used in place of an LLC or other legal business concern entity. DBAs and legal formation are not mutually sectional, and so to avert these pitfalls, simply ensure you have a legal entity in identify before filing a DBA.

• Lack of Naming Rights: Using a DBA does not give you official rights to your business proper noun. If you lot have not incorporated a business organisation and assigned it the name of the DBA, anyone who registers a legal business organization entity can accept your DBA name. The best style to protect your business concern name is to register a trademark for it.
• Lack of Legal Protections: Using a DBA as well does non requite yous the same legal protections and limited liability as an LLC or other corporate structure. You don't take the "corporate shield" to protect your personal avails from your business liabilities, and you do not have the various taxation benefits that are available from setting upwards a legal business entity.

Common Questions (and Answers) About Using a DBA

If I accept to fix up a corporate entity, just I want to operate nether a dissimilar company proper name, will I still exist protected?

As mentioned in a higher place, one of the best reasons to use a DBA proper noun is to abound an already established business. Let'southward say that you lot accept a business organization that provides residential painting services and one day you make up one's mind to expand your services and start providing residential flooring services.

What yous can do is obtain a fictitious business name or assumed business name, which will allow you lot to operate under a name that is relevant to your new service offerings. In addition, you will still be able to apply the aforementioned EIN and not demand to file a separate tax return for the new service line of your business. The assumed business proper name volition essentially let you to operate the new business line as an extension of the existing LLC.

There are 2 caveats associated with this type of filing: one is that not all states offer the assumed/fictitious business proper noun at the country level, and if this is the case, and so your secondary option is to obtain a DBA nether the LLC or corporation structure, which will essentially achieve the same thing.

The 2nd caveat is that all the ownership of the new business must exist identical to the original, or else it may cause complications in filing the company's taxes. A DBA does not let yous to get a separate business bank account for that attribute of your business organization, or manage the finances for that aspect of your business concern separately; it is just a proper name.

If I have an LLC, do I nevertheless demand a DBA?

For nigh people, the answer is no, unless you desire to operate your business under a different name than the LLC. For most people who employ a DBA, it means that they are operating as a sole proprietor. (For instance, Jackie Jones operates every bit a sole proprietor graphic designer, and she decides to practise business concern as: "Jackie Jones Designs.")

In this case, for a sole proprietor, the DBA is an extension of the natural person. Only if you are operating as an LLC or corporation, so the company is treated equally a separate legal entity that is different from the person or people who own it.

As mentioned before, a DBA is useful for an LLC if your LLC has a proper noun that is not relevant to part of your business, and you desire to offering a different production line or different surface area of service.

For case, allow's say you own a business called Joe'southward Handyman Services LLC and you want to outset offering services for plumbing and general mechanic services. Filing DBAs for these separate types of services will let y'all go along your existing LLC without having to form a new business entity. You can go on your existing LLC and file DBAs for "Joe'south Mechanic Services" and "Joe'southward Plumbing Services," just all are included nether the overall umbrella of that same LLC.

This lets you lot expand your services and conduct business organisation under a dissimilar proper noun, but withal be protected under your existing LLC. For example: "Joe's Handyman Services LLC DBA: Joe's Mechanic Services." This indicates that your company is able to offer multiple lines of concern under the aforementioned LLC proper noun.

Another example: Jane Smith is a existent manor agent who runs her own business called "Jane'southward Existent Manor Sales LLC." In add-on to selling homes, she decides to showtime offering consulting services to assistance other real manor agents with staging and photographing homes for auction.

For this new line of business, Jane decides to file a DBA chosen "Jane's Home Staging and Photo Services." In this case, filing a DBA tin help a business possessor create a separate identity for one aspect of her business, without having to gear up a divide LLC or other business organisation structure.

The bottom line: DBAs are best used in conjunction with a legal concern entity, to expand your business or grow your service offerings. Information technology can too exist useful in changing your business organisation name without losing the existing business entity.

Source: https://www.incfile.com/blog/post/understanding-dba-doing-business-as

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