Who Needs a Fictitious Business Name California?

Any company that conducts business under a name other than its legal name is required by law to have a fake business name, sometimes referred to as a DBA (doing business as) name in California. Businesses can operate under a name other than their legal name with the aid of a fake business name, which is advantageous for branding and marketing objectives. But in California, who needs a fictitious company name?

Any company that conducts business in California under a name other than its legal name must file for a fictitious business name. Limited liability companies (LLCs), corporations, partnerships, and sole proprietorships are all included in this. For instance, if John Smith wishes to run his company under the name “John’s Pizza,” he must apply for a fictitious business name with the state of California.

Can two businesses share the same DBA name in this regard? The short answer is no, two firms in California cannot share the same DBA name. The state forbids another firm from using a name that is already in use by one that is already in use. To avoid any future legal complications, it’s crucial to conduct a comprehensive search of existing business names before applying for a DBA.

What drawbacks does a DBA have? The fact that a DBA offers no liability protection is one of its key drawbacks. In other words, your personal assets may be at stake if your company is sued. A DBA also doesn’t protect your business name from taxes or provide any other tax advantages. Prior to registering for a DBA, it’s crucial to assess the benefits and drawbacks.

You are regarded as a member of an LLC as the owner of an LLC, therefore how can I pay myself from my LLC? Members are not regarded as workers and cannot be paid a salary. Instead, payouts are used to pay members. Payments distributed to members from the company’s revenues are known as distributions. It’s crucial to understand that unlike a salary, distributions are not subject to payroll taxes.

You might also inquire whether a DBA files a different tax return. A DBA does not submit a different tax return. A DBA is merely the name under which a company conducts business. Whether it is a corporation, partnership, LLC, or sole proprietorship, the business itself will file a tax return under its legal name.

In conclusion, it is necessary to file for a fictitious business name if you are conducting business in California under a name other than your legal name. To avoid any future legal concerns, it’s crucial to conduct a comprehensive search of existing business names. Even while a DBA can be useful for branding and marketing, it has no liability protection or tax advantages. Instead of receiving a salary, LLC members are compensated through distributions, and a DBA does not need to file a separate tax return.