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If you are opening your own business or expanding your operations, you might be wondering “What is the difference between a DBA and an LLC?” While an LLC or limited liability company can register to do business under another name, so can many other business entities. As we compare the benefits of using DBA vs LLC business names, it is important to understand that one does not replace the other.
What Is a DBA (Doing Business As)?
A DBA allows a business owner or board of directors to legally register a trade name that they will do business under. The common reasons for filing a DBA (doing business as) registration are:
Creating an offshoot of an existing business
Launching a new product or service
Rebranding without creating a new company
Expansion into a state or region where their business name is taken
What Is an LLC (Limited Liability Company)?
Registering your business as an LLC or Limited Liability Company is establishing a legal structure for your business. One step beyond a sole proprietorship, organizing as an LLC provides you some personal limited liability protection from debts accrued by your business.
After forming an LLC or another structure like a corporation or partnership, you could then decide to register a DBA for branding purposes or other sound business reasons. Using a DBA business name does not change your level of liability protection; that is determined by how your business is structured.
Comparing a DBA vs. an LLC
There are differences and similarities between using an LLC or a DBA to name or rebrand your business. As you consider a DBA vs. an LLC for business naming, these factors might affect your decisions.
Similarities Between a DBA and an LLC
You can operate your business in your state under your registered LLC name or under a registered DBA name.
You can advertise, use signage, set up bank accounts, and enter into contracts using both your LLC or DBA business names.
Using a DBA does not change your tax liabilities, liability protections, or responsibilities for annual reporting.
Differences Between an LLC and a DBA
Using a DBA as a sole proprietorship does not provide the limited liability protections of organizing as an LLC.
Organizing as an LLC creates a separate legal entity, while registering a DBA does not.
An LLC limits your personal liability for business obligations. A DBA does not give you any additional liability protection.
Filing a DBA usually requires a one-time registration fee, while your LLC or other business structure will have annual or biannual filing requirements.
Creating an LLC or other business entity with your state will give you exclusive rights to use that business name, but, depending on the state, DBA names do not come with exclusive rights.
The Advantages and Disadvantages of an LLC vs. a DBA
The benefits of a DBA include:
Inexpensive and easy to file
Less paperwork and annual responsibilities
Does not change tax status
Offers privacy over using your primary business or personal name
The advantages of forming an LLC include:
Creating a separate legal entity to do business
Offers some liability protection over operating as a sole proprietorship
Prevents other businesses in your state from registering the same name
Offers some flexibility and tax advantages over a sole proprietorship with DBA
Distinctions to Remember About Using a DBA vs. an LLC
A DBA is not a business structure like a sole proprietorship, LLC, corporation, or cooperative.
A DBA does not change your tax status or your liability protections; these are determined by what your state requires from your business entity.
A DBA is a valid way to create an offshoot of an existing LLC or to rebrand your business without changing how the business is structured.
Should Your Business Use a DBA?
Changing the name of your LLC, partnership, or corporation is a difficult process and should not be the first choice when DBA is a good option. Filing for a DBA is fast and easy and usually inexpensive. If you are already using a name for business purposes that is not a registered business name, then you should consider filing the paperwork to make it official.
Most states require you to register a DBA before you do business and create contracts using anything other than your own legal name or a legally registered business name. If you own a franchise location, your agreement might also require you to register as a DBA. You can avoid legal headaches by taking care of this as soon as possible.
Another great reason to use a DBA name is when the type of business you run changes direction or expands into new territory. Even if the name you use is registered in another state, you can usually operate there under a DBA unless the name is trademarked.
Protect the Good Name of Your Business
You will need to file both kinds of paperwork with your secretary of state or county clerk to form an LLC or register a DBA. You can also use a state authorized filing service to simplify the process. At FastFilings, we offer an easy-to-use online portal and business filing services that simplify the process of keeping up to date.
For a small fee, we error check and rush processing on all of your submitted forms, and we can provide sales tax forms, wholesale licenses, and certificates of good standing that might be required. Let us help prepare your government documents and register your business today for a hassle-free business filing experience.
]]>https://dev.fastfilings.pomdev.net/choosing-a-dba-vs-an-llc-for-your-business/feed/0When Is a Fictitious Business Name Required in California?
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https://dev.fastfilings.pomdev.net/when-is-a-fictitious-business-name-required-in-california/#respondThu, 04 Mar 2021 15:41:08 +0000https://dev.fastfilings.pomdev.net/?p=3941When Is a Fictitious Business Name Required in California? If you want to start a business in California, you will need a name for your business. Most business owners want a creative business name that differentiates them from others or makes it easy to determine what products and/or services they sell. Selecting a business name […]
When Is a Fictitious Business Name Required in California?
If you want to start a business in California, you will need a name for your business. Most business owners want a creative business name that differentiates them from others or makes it easy to determine what products and/or services they sell. Selecting a business name often results in using a fictitious business name.
What Is a Fictitious Business Name?
A fictitious business name (FBN) is also known as a doing business as (DBA). It is a name used for conducting business that does not use the business owner’s name. For example, you want to open a food truck business in Los Angeles and will operate it as a sole proprietorship.
You could use your name as the business name, such as Sandra Lopez’s Food Truck. Since the business name includes the name of the owner, then an FBN is not always required. However, in this example, the business name is not very descriptive since it does not describe the type of food you intend to sell.
On the other hand, if you wanted to name your business Sandra’s Mexican Cantina, so it was more clear what you intended to sell, then you would need to file with the county clerk’s office an FBN. Since the business name does not give details about the owner of the business, the fictitious business name statement filed will provide those details instead.
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Anyone that names a business that does not include their name or the names of the business owners needs to file for an FBN in California. Sole proprietors, partnerships, limited partnerships, LLCs, or corporations can all require an FBN to be filed with the clerk of the county where they want to do business.
Why Is an FBN Required in California?
If you want to get a business license, open business bank accounts, apply for a business loan, and so on, and you are not doing business using your name or the name of the business owners, then you need an FBN. Without one, you cannot enter into legal agreements with other businesses, such as vendors or suppliers. Nor are you allied to legally sign contracts, apply for small business loans, etc.
What Is Required to File for a Fictitious Business Name in California?
The first thing you will want to do is check with the California Secretary of State and conduct research for the business name you want to use. You need to verify that the name is not already being used somewhere in California.
If you discover a business is operating with the FBN you want to use, then you will need to choose a different business name. Otherwise, there could be legal implications you could face if the other business owner were to object to you using the same business name.
Once you verify your FBN is available, the next step is to fill out your business registration by completing various forms. You need to submit these, along with application fees in the principal place of business—i.e., the primary country where your business will operate.
After your application is approved, you may need to publish your FBN in newspapers of general circulation in your county. You should check with your local county clerk’s office to see if they have recommendations on what newspapers to use. At a minimum, you must publish this information for one month to establish your legal claim to the business name.
How Long Is a Fictitious Business Name Good For in California?
Your FBN will be valid for five years from the date of issue. However, if there are changes to the business during that time, like additional owners are added or removed or you change the business structure from a sole proprietorship to a limited liability company, then you must file these changes to your FBN when they occur.
Otherwise, if there are no changes, you will need to refile your FBN every five years to continue using your business name. If you do not file for renewals, then someone else could file an FBN and legally use your business name once your FBN expires.
Why Should I Get Help Filing for a Fictitious Business Name in California?
While you can file for an FBN on your own, it is recommended to get help. Various forms need to be completed, detailed research conducted, and other such tasks correctly completed to get your FBN.
Often, when people go it alone, they make mistakes, which must be corrected, and the forms must be re-filed. This can delay getting your FBN and opening your business. In the meantime, someone else could get approved for the FBN you want to use, requiring you to start the entire process all over.
Not to mention, getting help provides you with support from a business that is familiar with filing FBNs in California. They will help make the entire process of getting your FBN stress-free and simple.
For further information about when a fictitious business name is required and assistance filing your FBN in California, please feel free to contact FastFilings by filling out our online form today!
]]>https://dev.fastfilings.pomdev.net/when-is-a-fictitious-business-name-required-in-california/feed/0California DBA vs. LLC: What’s the Difference?
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https://dev.fastfilings.pomdev.net/california-dba-vs-llc/#respondWed, 17 Feb 2021 15:33:38 +0000https://dev.fastfilings.pomdev.net/?p=3882California DBA vs. LLC: What’s the Difference? California is home to nearly forty million people and two of the three largest urban economies—the Los Angeles and San Francisco areas—in the entire U.S. If you plan to launch a business, you certainly have plenty of opportunities in the Golden State—but there are a few things that […]
California is home to nearly forty million people and two of the three largest urban economies—the Los Angeles and San Francisco areas—in the entire U.S. If you plan to launch a business, you certainly have plenty of opportunities in the Golden State—but there are a few things that any aspiring entrepreneur needs to know before they open their doors to the public.
Starting a business in California involves more than just setting up a shingle that bears your company’s name. You will need to file papers with the relevant governmental entities that oversee business operations in the state. This will require you to make decisions at the outset about the legal classification of your business. In order to make the correct decisions, you need to learn the differences between a California DBA and an LLC. These are essentially two distinct types of legal statuses, each with its own advantages and disadvantages. Selecting the right option can save you a lot of time, money, and hassle in the long run.
Because this topic often confuses would-be business owners, FastFilings has prepared a brief infographic that offers an easy-to-follow overview of the differences between a DBA and an LLC. Scroll down to view our infographic, and feel free to contact us with your questions.
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]]>https://dev.fastfilings.pomdev.net/california-dba-vs-llc/feed/0What Happens if You Don’t File a CA DBA?
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https://dev.fastfilings.pomdev.net/what-happens-if-you-dont-file-a-ca-dba/#respondSat, 16 Jan 2021 00:00:46 +0000https://dev.fastfilings.pomdev.net/?p=3693What Happens if You Don’t File a California DBA? Some California businesses must file a DBA in order to operate legally. Not submitting a California DBA filing can have several consequences. We take a closer look at what DBA stands for, who needs it, and what happens if you fail to file. What Does a “Doing Business […]
Some California businesses must file a DBA in order to operate legally. Not submitting a California DBA filing can have several consequences. We take a closer look at what DBA stands for, who needs it, and what happens if you fail to file.
What Does a “Doing Business As” Registration Mean?
If you’re the owner of a business but your business name doesn’t include your last name, registering a DBA will identify you as the person who owns the business. In addition, the DBA also establishes your exclusive right as the business’s owner to use the business or trade name you’ve chosen.
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Need help filing your wholesale license in California?
No; when discussing who needs a DBA, the law refers to only the following entities and circumstances:
Sole proprietorships conducting business with a name that doesn’t contain the last name of the owner
Partnerships using a business name that doesn’t suggest additional owners (such as “& Co.” or “& Associates”), or that don’t include the last names of each partner
Any LLC, corporation, or limited partnership conducting business under a name not stated in the Articles of Organization or Articles of Incorporation they filed with the California Secretary of State
What Can Happen if You Don’t Register a Doing Business As in California?
Not filing for a DBA can have several unwanted consequences for a California business.
California statute prohibits a person from conducting business legally until and unless they have followed the DBA registration procedure. If a company that is supposed to file a DBA is found to be conducting business without one, they can incur penalties for doing so.
Your ability to open a bank account in your business’s name, as well as your ability to earn income under your business name can be prevented if you don’t file a DBA.
Without a DBA, you’ll also be unable to create multiple businesses without forming a different entity. For example, if your business has or wants multiple locations, you won’t be able to create a parent corporation and then use a single DBA for those multiple locations.
The validity and enforceability of contracts your business enters into can also be affected if you don’t file a DBA. This extends to contracts entered into by others on behalf of your business.
Finally, not registering a DBA can mean that you, or officers and other agents entering into contracts on your business’s behalf, can be found personally liable for failing to disclose the surname of the business owner.
The process for filing a DBA requires several steps, including completing and submitting forms for approval. Any errors or missing information can delay the process and prevent you from opening on time.
FastFilings specializes in how to get a DBA in California. We ensure your forms are not only complete and error-free but filed directly with the issuing office, so you can focus on your business. Get started now. Just visit us online.