An LLC must submit a Certificate of Assumed Name to the North Carolina Secretary of State’s office in order to register a DBA in the state. The legal name of the LLC, the proposed DBA name, and a brief explanation of the commercial operations connected with the assumed name are all required on this form. This paperwork must be filed, and the charge will depend on the county in where the LLC is situated.
As long as each name is distinct and has not previously been registered by another company, an LLC may utilize more than one DBA in North Carolina. This can be advantageous for LLCs who provide various services or work across many industries. For instance, an LLC that offers both gardening and interior design services can decide to use two different DBAs to distinguish the two business segments.
It is crucial to remember that an LLC is not legally protected by a DBA. The LLC is still liable for all obligations and liabilities related to the firm, and the name used for legal and financial transactions continues to be that of the LLC. A DBA is merely a tool used for branding and marketing.
Also, what is a sole proprietorship, one would wonder? An individual owns and runs their business as a sole proprietor in this form of business structure. A sole proprietorship, in contrast to an LLC, lacks the legal distinction of a separate legal entity, making the owner personally liable for any obligations and liabilities incurred by the business. Since the owner of a sole proprietorship already conducts business under their legal name, sole proprietorships are not eligible to register a DBA in North Carolina.
What are the drawbacks of a DBA, one can also ask? The absence of legal protection for the business owner is one of the key drawbacks of a DBA. The owner remains individually liable for all debts and liabilities connected with the firm because a DBA does not offer any liability protection. Additionally, a DBA does not provide any tax advantages because the company is still taxed under its legal name as a single entity. Finally, if a DBA is not properly registered or used consistently throughout all business operations, it may confuse clients and suppliers.
In North Carolina, an LLC is allowed to operate under a DBA, but it’s crucial to be aware of the restrictions and criteria. Before making any decisions about the name or structure of their business, LLCs should carefully weigh the advantages and disadvantages of adopting a DBA and speak with a legal or financial counsel.