You might be asking whether you require a DBA (Doing Business As) for your LLC (Limited Liability Company) if you are launching a business in Texas. The response is that it depends on the name that your LLC uses to conduct business. You do not require a DBA if you are using your own name as the company name. However, you must submit a DBA application to the Texas Secretary of State if you are using a name other than your own.
But what precisely is a DBA? A business that conducts business under a name other than its legal name is referred to as a DBA in legalese. A DBA is often referred to as an Assumed Name Certificate in Texas. For instance, if your LLC is called “Texas Business LLC” but you wish to do business as “Texas Business Services,” you must submit a DBA application.
It’s crucial to understand that filing a DBA does not establish a new legal company. It merely enables your LLC to function under a different name. Additionally, registering a DBA does not protect your company name as a trademark. You must apply for a trademark with the United States Patent and Trademark Office if you wish to protect the name of your company.
Due to their flexibility and tax advantages, LLCs are a common choice for small businesses. In contrast to a sole proprietorship or partnership, an LLC offers its owners limited liability protection. This indicates that the owners are not liable for the debts and liabilities of the business.
An LLC also has the benefit of allowing pass-through taxation. This indicates that the business’s gains and losses are transferred to the owners’ individual tax returns. The business owners may have to pay less in taxes as a result of this.
It’s critical to take your company’s unique requirements into account while choosing between a S Corp and an LLC. There are several significant distinctions even though both organizations offer pass-through taxation and limited liability protection.
S Corps have restrictions on who can be a shareholder and how many stockholders a corporation can have, which is one significant difference. S Corps must also adhere to certain formalities, including having regular board meetings and maintaining thorough corporate documents.
How long can an LLC demonstrate a loss?
An LLC is able to demonstrate a loss for as many years as required. In fact, when they make investments in the expansion and development of the business, many businesses actually suffer losses in their early years. For tax purposes, these losses may be utilized to reduce the firm owner’s personal income. It’s crucial to remember that the IRS can consider a business that frequently posts losses to be a hobby rather than a real enterprise. It’s crucial to have a strong business plan and demonstrate that you are actively trying to earn a profit in order to prevent this.
The IRS cannot pursue an LLC for unpaid personal taxes. The IRS, however, has the authority to seize the company’s assets and bank accounts if the LLC doesn’t pay its taxes. Furthermore, if the LLC has only one member, the owner’s private assets may be in jeopardy if the company is sued or subject to other legal action.
Conclusion: Depending on the name your company is operating under, you may or may not require a DBA for your LLC in Texas. However, it’s crucial to take into account both the benefits of an LLC for your company and the distinctions between an LLC and a S Corp. A limited liability company (LLC) can demonstrate a loss for as many years as necessary, but it’s crucial to have a strong business plan and demonstrate that you are actively trying to earn a profit. Although the IRS cannot pursue an LLC for unpaid personal taxes, the LLC’s assets and the owner’s personal assets may be at danger if the firm is sued or has unpaid taxes.