This is a route to take if you can handle the burden of owning a large company. Small businesses can get by with a DBA. You can also establish a DBA to be part of an existing corporation.
If you want to establish a specific company, you can create a DBA with a different name so you don't have to create another corporation. The DBAs are called umbrella companies for the corporation and will save you money. If you have a small business, you can create a DBA with the secretary of state or county clerk and run the business as a partnership or sole proprietorship. It doesn't cost much to register a DBA, and in many states it is renewable every five years.
There's also little paperwork which allows you to run a business in the simplest manner. The Incfile blog is an entrepreneur's resource to grow. Read more. January 15, by Jackie Lam. While a DBA may be right for your business, it's important to understand how they work and when to use them. A DBA is often used by sole proprietors who want to operate their business under a business name that is different from their individual name.
In most states, registering a DBA name gives your business the ability to use a fictitious business name; however, keep in mind that a DBA name is not the same as a legal business entity and it does not give you the same limited liability or legal protections as an LLC or other corporate structure for your business.
There are two main situations where business owners would want to use a fictitious business name or DBA:. There are many reasons to use a DBA for your business, and they offer a lot of benefits. It's important 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 help your business grow and thrive.
DBAs and legal formation are not mutually exclusive, so to avoid these pitfalls, simply ensure you have a legal entity in place before filing a DBA. That is the reasoning behind such forms — making sure customers know the name of the business owner. The same is true if your partnership, LLC, or corporation wants to do business under a name different from its legal name. This would be the case if, say, the Veggies R Us corporation decided to spin off its ice cream business, naming it The Cream of the Crop.
The Cream of the Crop would need a DBA filing since the name being used is different from its parent corporation. For more information about where to file, check here. Get free online marketing tips and resources delivered directly to your inbox. In the meantime, start building your store with a free day trial of Shopify.
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