Businesses that operate under names other than those of their owners are referred to as “fictitious entities” in legalese. DBAs (Doing Business As) and LLCs (Limited Liabilities Companies) are the two types of fictional businesses that are used the most frequently. An LLC is a legitimate corporate structure that enables owners to safeguard their personal assets, whereas a DBA is also referred to as a trade name, assumed name, or false name.
You must submit a paperwork to the Pennsylvania Department of State if you currently have a DBA and want to alter it. From their website, you may download the form, fill it out, and send it in along with the filing fee. A new certificate bearing your new company name will be issued to you after it has been authorized. It is crucial to understand that changing your company name will not affect your tax ID number or legal framework.
Yes, a DBA may have a minimum of two owners. In actuality, a lot of small firms use a DBA and function as partnerships. Unless a written agreement between the owners specifies otherwise, everyone is equally liable for the business’ obligations.
A DBA’s primary drawback is that it does not safeguard the owner’s private assets. In other words, the owner’s personal assets may be at danger if the company is sued. A DBA does not offer any liability protection or tax advantages either.
An LLC may have a DBA, yes. In reality, many LLCs use a DBA to manage many businesses under one umbrella or for branding purposes. It is crucial to keep in mind that an LLC must continue to maintain its legal structure and file as an LLC for tax purposes. The DBA is only a name that is used for branding and marketing initiatives.
In conclusion, the phrase “fictitious entity” is used in law to refer to companies that operate under a name other than that of the owner or owners. The two most popular types of fake entities are DBAs and LLCs. While an LLC is a legitimate business structure that enables owners to safeguard their personal assets, a DBA is a trade name that a business uses. A DBA may have two or more owners, but neither liability protection nor tax advantages are offered by this structure. An LLC may also operate under a DBA, but it must preserve its legal identity and submit tax returns as an LLC.
In most states, the identity of an LLC’s owner is public knowledge. Usually kept on file with the state government, this information is accessible through the Secretary of State’s office or internet databases. To protect the owner’s identity, certain states might permit the employment of a registered agent or the creation of an anonymous LLC.