One of the most crucial considerations that owners must make when founding a Limited Liability Company (LLC) is deciding on the name of the company. However, it happens frequently that several LLCs would like to utilize the same name or one that sounds similar. In these circumstances, the question of whether two LLCs can share a Doing Business As (DBA) name arises. No, two LLCs cannot share the same DBA name, to keep it simple.
It is crucial to realize that a DBA name is not the same as a legal name. It is a moniker, as opposed to a company’s registered legal name, under which it conducts business. A trade name or fictional name are other terms for a DBA name. The usage of the same DBA name by two LLCs may cause confusion among clients and vendors. Additionally, it could lead to legal problems over who owns the name. Is it important what I call my LLC?
It matters what you call your LLC, yes. The name you choose for your LLC is crucial since it will affect your branding, marketing, and legal ramifications. It is crucial to have a name for your company that is distinctive, memorable, and associated with it. The name must also not violate any registered trademarks or corporate names. What is the purpose of a DBA?
A DBA enables a business to conduct operations under a name other than its legal name. For branding and marketing purposes, an LLC, whose legal name is XYZ Corporation, may utilize the DBA name ABC Services. A DBA name also enables a company to grow without having to create a new corporation. A DBA may have an EIN number.
A DBA is not permitted to possess an Employer Identification Number (EIN). The Internal Revenue Service (IRS) issues an EIN, a special nine-digit number, to identify a company organization for tax reasons. An EIN can only be connected to an LLC’s legal name; it cannot be coupled with a DBA name. Is it necessary for me to update my DBA with the IRS?
No, you don’t have to inform the IRS of a change in your DBA name. However, you must update your information with the IRS if your legal name or registered agent address changes. You must also inform the IRS of any changes to your business entity, such as going from an LLC to a corporation, if you have an EIN.
Therefore, no two LLCs may share the same DBA name. It is crucial to pick a name for your LLC that is distinct, pertinent, and does not conflict with any already-used trademarks or company names. Although it lacks legal validity, a DBA name can be a beneficial branding and marketing tool. In addition, unless you alter your legal name or registered agent location, you do not need to modify your DBA name with the IRS. A DBA name cannot have an EIN number.
Therefore, how much should a DBA set aside for taxes?