The foundation of the economy, small companies are essential to the expansion of the labor force and the economy. You may be a small business owner who is unsure if you need to register your company. The answer to this question is influenced by a number of variables, including your company’s legal structure, the state in which you conduct business, and the kind of business you operate.
If you are a sole proprietor, you are not obligated to register your business with the state, but depending on the kind of business you run and the state in which you do business, you might need to do so. However, you must register your company with the state where you conduct business if you run a partnership, LLC, or corporation.
A DBA, or “doing business as” name, is permissible for an LLC, or limited liability firm. A DBA is a made-up name that a company uses in place of its actual name. Businesses that want to operate under a different name or brand frequently use it. To utilize the name “Jones Consulting,” for instance, if your LLC is called “Smith and Jones LLC,” you can submit a DBA application.
There is no need for a separate bank account for a DBA. To keep your personal and business finances distinct, it is advised that you open a different bank account for your business. For accounting and tax purposes, this can be useful.
A DBA is a registered business name under the law. It neither establishes a distinct legal entity nor does it offer your company any kind of legal protection. Your personal assets are already secured from business debts and liabilities because you are an LLC, which means you already have limited liability protection. Operating as an LLC has a lot of advantages. Protection from limited liability is one of the key advantages. As was already noted, an LLC offers personal asset protection, meaning that your personal assets are shielded from obligations and liabilities incurred by your firm. Additionally, LLCs provide pass-through taxation, a flexible management structure, and simpler finance availability.
In conclusion, a number of factors determine whether or not your small business needs to be registered. Even though you might not need to register your single proprietorship, you could need to apply for a business license or permission. However, you must register your company with the state if you run a corporation, LLC, or partnership. A DBA is permissible for an LLC, and having a separate bank account is advised. An LLC already affords limited liability protection for personal assets, but a DBA offers no legal protection.