One of the first things you should think about when starting a new business in Michigan is if you need to register your business name. While it’s true that registering your business name isn’t always necessary, it’s still generally a smart move. We’ll look at the benefits of registering a DBA in Michigan, how long it takes to get one, and any drawbacks in this post.
A business that conducts business under a name other than the owner’s legal name is referred to as “doing business as,” or “DBA,” in legalese. For instance, if your name is John Smith and you are launching a business called “ABC Cleaning Services,” you must register your business name as a DBA. The benefits of filing a DBA in Michigan
You can conduct business under a name other than your legal name in Michigan, which is one of the main benefits of registering a DBA there. This can be crucial for branding and marketing objectives as well as for establishing your credibility in your field.
You can safeguard your company name by registering a DBA, which is even another benefit. No one else in Michigan is permitted to conduct business under that name after you have filed your DBA. This might assist you in avoiding confusion and safeguarding your brand from copycats. How Long Does It Take in Michigan to Obtain a DBA?
In Michigan, obtaining a DBA is a rather simple process. The Michigan Department of Licensing and Regulatory Affairs (LARA) will require that you submit a form and pay a fee. If there are any problems with your application, the procedure could take longer than the typical 7–10 business days. What Are the Negative Aspects of a DBA?
The fact that a DBA doesn’t provide the same amount of legal protection as an LLC or corporation is one of its key drawbacks. Your personal assets may be at danger if your company is sued. You might also need to register your DBA in other states if you plan to take your business outside of Michigan.
Even though it’s not necessarily necessary in Michigan to register a DBA, most firms should nonetheless do so. It can facilitate doing business under a name other than your legal name, safeguard your business identity, and assist you in establishing a professional presence. If you decide to take your business outside of Michigan, just be aware of the potential drawbacks, including the lack of legal protection and the requirement to register your DBA in other states.
Doing Business As (DBA)s do not submit a separate tax return. A DBA does not establish a separate legal organization for tax purposes; it is merely the name under which a firm conducts its operations. The owner of the business would continue to file their tax returns under their own names or the names of the legal entities under which their company is organized (such as an LLC or corporation).
A “doing business as” (DBA) entity is simply the name that a business uses to conduct its operations; it is not a distinct business structure from its owner(s). A DBA does not, therefore, pay additional taxes. All business gains and losses must be reported on the owner of the DBA’s personal tax return. However, it is significant to note that the tax implications could differ depending on the kind of business entity selected, thus it is advised to speak with a tax expert for more detailed advice.