There will always be law differences between states. Our answer covers what is most commonly seen throughout the US while also pointing you in the right direction regarding state differences.
LLC organizations regularly enquire about DBAs, how they affect the running of your LLC, and if there are any negative impacts to filing for new ‘doing business as’ names.
If you ask the same questions, you’re in the right place. We’ve collated all of the information you need with expert advice.
How Many DBA Can an LLC Have?
There is a distinct difference between DBAs and LLCs. Think of the LLC as the heart of the operation. All DBAs branch off of that and operate underneath it.
USA law dictates that an LLC can hold unlimited DBA names.
DBA names, or doing business as names, don’t each operate separately in the eyes of the law. They are trading names detached from the primary LLC or limited liability company. Therefore, legally there isn’t a limit to the number of business sub-names you can file for.
You will only ever have one name registered as your LLC organization. Any trade names you then have are limitless, given that they remain available in your state.
In Florida, DBAs are referred to as fictitious names.
Your DBA can be used to transact your business on the ground, and that’s the name people will refer to when they quote your business name. It’s common for public members to need to be made aware of a company’s LLC.
When Does It Make Sense to Register Multiple DBAs For an LLC?
Each DBA follows a state filing fee. Yet, there are many reasons why organizations register multiple under their LLCs.
Compliance requirements in states like Georgia, countries issue registration names instead of state authorities. Due to differing state laws, you may need to register for multiple DBAs if you have a company operating in states where the law differs like this.
In marketing, companies often change their name slightly if their LLC is longwinded. You can advertise your brand with a catchy, easy-to-remember name that differs from the original. You would then get a DBA for an abbreviated name.
Marketing reasons can go as far as specifying the location, leading to a new DBA in each state. For instance, the name of your LLC could look something like ‘Thompson Expert Law LLC.’ State-specific DBAs make companies feel more local and trustworthy. A location-specific DBA might look like ‘Expert Law of New York.’ American people trust small businesses more than their congress, meaning any company that appears less corporate will be more popular.
If making a change to your product line, a name change could be made to reflect that. You may want a business name to recall your specific products, and rather than changing your LLC, you would adopt a new DBA.
DBAs offer a fresh start. Say your company needs a complete rewrite, hoping to conquer the area in a second attempt. A new DBA means you can re-launch your company under a new name, logo, and brand without needing to build the business from the ground up.
To separate your company divisions, use a DBA. LLCs can also be holding companies, meaning the LLC may perform various business types under one entity. Each division would then require a name that reflects that area of business.
How To Handle Multiple DBAs Registration
The process is simple, with many states using online resources to register DBAs.
Note that DBAs can be registered at your leisure. Please apply for your DBA when you start your LLC or apply for it later once you’re set up.
A Name Search
Before beginning your DBA registration, conduct a name search of your desired DBA. You must ensure that the name you want is available in the state it will be operating.
Online or Via Mail?
Next, decide whether you want to conduct the registration through the mail or online.
An online application should take around 10-15 minutes. The alternative goes through the paper process, which factors in mail time. Complete a DBA registration form and mail it to the Secretary of State.
Gather the Right Information
You will need the following information with you to complete your form:
- Your legal LLC name
- Nature of your business
- Business address
- Employer ID number and, if applicable, the state registration number
- Date and signature
There will be a fee alongside your registration. For example, some services in Florida require the answers to only some basic questions and charge a $10 fee.
Understanding Your Taxes and Bookkeeping
When you have multiple DBAs, bookkeeping will become slightly more complicated. Each one will charge filing fees, so ensure that multiple DBAs are necessary for you.
Since DBAs don’t stand as separate businesses, the IRS will look at every DBA as if one machine. It can become difficult to claim a loss from one DBS if you have others making money. It is impossible to separate your revenues when filing your taxes.
Note that you need to use your LLC and not your DBA when signing contracts and legal documents.
How Many DBAs Should You Have?
The answer ultimately depends on what kind of administrative support you have. The easy answer is that you can file for as many as you wish, given your current state.
Be aware having multiple DBAs does increase concern around liability. Because all your DBAs are filed under your LLC, one significant loss could bring down all your businesses. Losing your business is an absolute worst-case scenario, but be aware that the more DBAs you run, the higher you risk losses impacting the whole structure.
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