A DBA, or “Doing Business As,” is a legal term that describes a company that is conducting business under a name other than the owner’s. Sole owners who desire to conduct business under a name other than their own frequently employ DBAs. Businesses that desire to expand into new product lines or services under a different name often employ DBAs. Although a DBA is not a distinct legal entity like an LLC or corporation, it may nevertheless be necessary in some situations to obtain an EIN, or Employer Identification Number.
The Internal Revenue Service (IRS) issues a special nine-digit number called an EIN to identify firms for tax reasons. If you are a sole proprietor with a DBA and no current workers and no plans to hire any in the near future, you can be exempt from needing an EIN. However, you could be needed to obtain an EIN if you intend to open a business bank account or if you have to file specific tax forms, such a sales tax return.
Whether or whether you have workers, you must obtain an EIN if you have a DBA and conduct business as a partnership, company, or LLC. This is due to the fact that these kinds of businesses are obliged to submit their own tax returns and are regarded as independent legal entities from their owners.
Your DBA and LLC may indeed share a name. The fact that a DBA is not a different legal entity from your LLC should be noted. This means that your LLC will be liable for any obligations resulting from your DBA. It might be a smart idea to run your firm under your LLC name rather than a DBA if you wish to protect your personal assets from business liability. In light of this, What Is DBA Example?
An illustration of a DBA would be if John Smith ran his landscaping company under the name “Green Thumb Landscaping” rather than his given name. To register “Green Thumb Landscaping” as his business name in this scenario, John would have to submit a DBA to his local government. Can I Change My DBA to Include Inc?
If you are conducting business as a company, you may add “Inc” to your DBA. It’s crucial to remember that a DBA does not offer a corporation the same amount of legal protection. It might be a smart idea to incorporate your firm rather than use a DBA if you wish to shield your personal assets from business responsibilities.
In conclusion, even though a DBA is not a different legal entity from its owner, it could be necessary to get an EIN in some cases. Regardless of whether you have employees, you must obtain an EIN if you operate as a partnership, company, or LLC. Both your DBA and LLC may use the same name, but your LLC is responsible for any liabilities associated with your DBA. An illustration of a DBA would be if John Smith ran his landscaping company under the name “Green Thumb Landscaping” rather than his given name. Finally, if you are conducting business as a corporation, you can add “Inc” to your DBA; nevertheless, it is crucial to remember that a DBA does not offer the same level of legal protection as a corporation.
Your DBA name may be taken, particularly if you haven’t protected it legally by registering it as a trademark or via other means. It is advised that you register your DBA with your state or local government and think about getting a trademark for it in order to avoid this from happening. It’s crucial to keep an eye on your company name and, if necessary, take legal action to safeguard your intellectual property.
It is possible to reserve a business name without using it. It is crucial to understand that trademark protection does not accompany business name registration. It is advised to submit a trademark application along with your business name registration if you want to protect your brand. Additionally, you run the danger of losing your registration if you don’t utilize the registered business name for a long period of time, at which point it might become accessible for use by others.