When starting a business, one of the first decisions you have to make is what type of entity to form. There are a few different types of business structures to choose from, but two common formaitons are the DBA and LLC. In this DBA vs LLC article, we will discuss the difference between both business structures. We will also outline the pros and cons of each structure to help you decide which is right for your business.
An LLC, or limited liability company, is a business structure that offers personal liability protection and tax benefits. LLCs are popular among small businesses because they are easy to set up and maintain.
A DBA, or doing business as, is a fictitious name that businesses can use if they are operating under a name other than their legal name. For example, if your company’s legal name is John Smith Enterprises, but you want to do business as Joe’s Plumbing, you would file for a DBA.
There are a few different pros of setting up an LLC, including:
There are a few potential cons of starting an LLC, including:
There are a few different pros if you choose to file a DBA online, including:
There are a few potential cons of starting a DBA, including:
Ultimately, there really isn’t a DBA vs LLC debate. Both structures are helpful for keeping personal and business income separate. However, an LLC is better suited to provide protection in court and specific tax benefits. If you’re interested in forming an LLC, click here to get started.
Do you have any more questions about the difference between DBA and LLC? If so, here are common questions on the subject.
Q. Is it better to make an LLC or DBA? A. It depends on your business and what you are looking for. If you want personal liability protection, an LLC would be the better choice. If you are looking for a cheaper and easier option, a DBA could be the way to go. It’s worth pointing out, though, that you can register a DBA for your LLC if you need it.
Q. Can you convert a DBA into an LLC? A. Yes, you can convert a DBA into an LLC. You would need to file the appropriate paperwork with your state and make sure that all of your business records are updated.
Q. Do DBAs pay taxes? A. DBAs are not taxed as their own entity. Instead, they are “passed through” to the owner’s personal tax return. This means that the profits and losses of the business are reported on the owner’s individual tax return.
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