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 April 05, 2022

How to Add a DBA to an LLC in 3 Steps

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Once you’ve finished setting up an LLC you may ask yourself, “Do I need a DBA for an LLC?” While it isn’t strictly necessary to do so, adding a DBA to an LLC can be a great opportunity to expand and diversify your company. Some even choose to operate multiple DBAs under a single LLC. Some create DBAs for advertising purposes; others to limit liability. Let’s take a look at the possibilities.

How do I create a DBA for my LLC?

Wondering how to create a DBA under an LLC? Concerned about the effort and money involved? Don’t be: Assigning a “Doing Business As” (DBA) name to your Limited Liability Company (LLC) is neither difficult nor expensive. In fact, creating a DBA for your LLC is a short 3-step process.

1. Choose a name

LLCs are named for their proprietors. That can make for a company name that looks awkward in print or on signage. A company simply named Jane Doe LLC reveals nothing about what the company does. This is where a DBA tradename comes in handy. A DBA is a great marketing opportunity: The right tradename can excite curiosity about your company while clearly communicating what it is you do or sell. Or, if you want it to, a more oblique DBA tradename can arouse an intriguing sense of mystery, especially in a crowded, in-demand industry. Either way, assigning a DBA to your LLC is a smart marketing decision. Be aware that you’ll likely want to come up with a list of possible names, as the one you want may already be taken. You can find out what’s available by performing a business name availability check. To do so, you—or, better still, a business lawyer—do the following:

  • Do a basic search engine query
  • Conduct a domain name search at Whois.com or another registrar
  • Search county and state websites to see if the name you want is taken
  • Check your Secretary of State’s database of existing DBAs
  • Search the U.S. Patent and Trademark Office website for name matches

Be sure you’ve performed a thorough search before assigning your DBA: A duplicate DBA is an infringement on another person’s intellectual property that can result in a lawsuit they’ll most likely win.

2. Register your name

After you’ve carefully chosen your tradename, you’ll need to register it. This involves filling out forms of one kind or another, depending on what exactly your state, county or city requires. Depending on where your company is based, you may be able to register your DBA name online. DBA registration fees vary depending on where, and at what municipal level, you register. You may also be required to publish a DBA notice in an approved publication—usually a newspaper or local-events periodical, etc.

3. Trademark your name

Once you’ve registered your DBA, trademark your tradename. After all, you’ve worked hard to get it just right; it’s your intellectual property and should be protected as such. To do this, visit the U.S. Patent and Trademark Office website.

Can one LLC have multiple DBAs?

A single LLC can be associated with multiple DBAs. You will need to register each DBA separately, per the steps above. Two or more LLCs, however, cannot be associated with the same DBA.

Does a DBA need a separate bank account?

If you’ve registered multiple DBAs under a single LLC, you may want to assign each one its own bank account in order to make tracking your cash flow easier. In fact, many banks require you to separate individual DBAs into their own discrete accounts. If, on the other hand, your bank doesn’t require you to separate your DBA accounts, you can aggregate your DBAs in a single bank account. Just make sure you establish some kind of reliable bookkeeping system: Accurately tracking cash flow can head off downstream problems with customers, lenders and the IRS.

Is DBA a sole proprietorship?

DBAs are most commonly associated with sole proprietorships. You aren’t required to assign a DBA to your sole proprietorship. But you and your sole proprietorship are one in the same: You share not only full liability but a name. This can put you in an awkward position marketing-wise; a DBA tradename simplifies and conventionalizes a company’s moniker, whereas christening it with a proper name could foster ambiguity regarding what it is your company does.

Can you have multiple DBAs under one EIN?

An Employee Identification Number, or EIN, is issued to each registered proprietor. A single EIN, then, is associated with a single, individual LLC. As mentioned, you can register multiple DBAs under a single LLC. Therefore, you can register multiple DBAs under a single EIN, in the sense that multiple DBAs are associated with a single LLC, each of which has a unique EIN.

Is it better to have multiple LLCs or DBAs?

Depending on your business plan, you may want to register either multiple LLCs or multiple DBAs under an extant LLC. There are pros and cons to each approach.

Pros of multiple LLCs

It makes sense to register multiple LLCs if your companies offer various, unrelated services. For instance, if you’re looking to register your IT company, a restaurant chain, and a line of private ambulances, registering each as an LLC rather than a DBA of Jane Doe LLC makes clear that the three services you offer don’t overlap, clarifying customer or client expectations. Another advantage of multiple LLCs is that each individual company is isolated against risk. That is, if Jane Doe LLC I is sued, neither Jane Doe LLC II nor Jane Doe LLC III are liable. Also worth mentioning is that an LLC can own another LLC.

Cons of multiple LLCs

To keep multiple LLCs running you’ll need to pay a number of fees, some of them repeatedly throughout the lifetime of your company:

  • Initial incorporation fees for each LLC
  • Annual state or local maintenance fees
  • Fees for individual business licenses and EINs
  • The cost of filing taxes for each individual LLC

For some, operating multiple LLCs simply isn’t realistic considering the fees involved.

Pros of multiple DBAs

From a marketing standpoint, operating multiple DBAs under a single successful LLC looks good to customers and clients. The thing at issue here is branding: If Jane Doe’s IT firm, restaurant chain, and ambulance fleet operate under multiple DBAs rather than as three distinct LLCs, her three companies fall under the Jane Doe LLC umbrella. If her ventures are successful, Jane Doe LLC—her brand—becomes a mark of quality, which she stamps on future DBAs. In other words, her brand itself does the heavy lifting advertising-wise. Were she to operate each company under a different LLC it would be hard for a cogent brand to appear, depriving her of a major marketing opportunity. Other pros of multiple DBAs over multiple LLCs:

  • You’ll pay fewer annual fees
  • Each DBA is afforded the legal protection granted the overall LLC, thereby guarding your assets
  • You can report aggregate income from DBAs on your tax form as a single LLC

Cons of multiple DBAs

The biggest con of operating multiple DBAs under a single LLC is that, should one DBA get sued, all the DBAs registered under that one LLC would be liable. On the other hand, multiple LLCs are discrete entities, so a suit against one wouldn’t directly affect the others.

Get started now!

Whether you’re looking for more information on either a DBA or LLC, wondering how to create a DBA for your LLC, or you have any other legal questions, let LegalShield help. Get started today!

Pre-Paid Legal Services, Inc. (“PPLSI”) provides access to legal services offered by a network of provider law firms to PPLSI members through membership-based participation. Neither PPLSI nor its officers, employees or sales associates directly or indirectly provide legal services, representation, or advice. The information available in this blog is meant to provide general information and is not intended to provide legal advice, render an opinion, or provide any specific recommendations. The blog post is not a substitute for competent legal counsel from a licensed professional lawyer in the state or province where your legal issues exist and the reader is strongly encouraged to seek legal counsel for your specific legal matter. Information contained in the blog may be provided by authors who could be third-party paid contributor. All information by authors are accepted in good faith, however, PPLSI makes no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of such information.

 

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