There are several factors to take into account while beginning a business, such as the legal framework, finances, branding, and more. Choosing whether to operate under a business name or a personal name is one of the most crucial considerations. If you choose to utilize a business name, you must apply for an EIN (Employer Identification Number) from the IRS and register the name with the state. Which comes first, EIN or DBA, is the question.
The state and type of your firm will determine this, is the response. Before submitting an application for an EIN, you can get a DBA (Doing Business As) in some states, but you must first get an EIN in others. For instance, in Texas, obtaining a DBA requires that you first obtain an EIN. However, in California, you can first register a DBA before requesting an EIN.
An EIN is what?
An EIN is a special nine-digit number given to your firm by the IRS to be used for tax purposes. This is your company’s equivalent of a social security number. If you want to file taxes, create a business bank account, hire staff, or apply for business credit, you’ll need an EIN.
A DBA is what?
A DBA is a type of legal fictitious name that enables you to conduct business under a name other than your given name. For instance, if your firm will be run under the name “Smith’s Services,” but your legal name is John Smith, you’ll need to file a DBA. Other names for a DBA include “fictitious name” and “trade name.”
Depending on the jurisdiction, Texas’s DBA registration fees change. The cost varies by county, starting as low as $13 in some and up to $118 in others. For particular costs and regulations, you should check with your neighborhood county clerk’s office. Which comes first, the EIN or the DBA?
The answer differs by state, as was already established. In general, you’ll need to apply for an EIN and establish a DBA if you intend to operate under a business name. However, the requirements of your state could dictate the order in which you do these things.
In Texas, registering a DBA with the county clerk’s office comes after obtaining an EIN from the IRS. You must submit a DBA form and pay the appropriate money to register your business name after receiving your EIN.
In conclusion, it’s crucial to comprehend the legal criteria for obtaining an EIN and registering a DBA when starting a firm. The precise criteria for your state and county should be researched in order to determine the best order to do these tasks. Additionally, knowing how much a DBA in Texas and other states would cost you will help you plan your budget for operating costs.