What comes first, DBA or LLC?

Decide what your business needs today, for sole proprietorships and LLCs, let’s see when DBA are actually necessary. 

What comes first, a Doing Business As (DBA) or a Limited Liability Company (LLC)? Well that answer can go either way. It depends on whether you want to form a sole proprietorship or an LLC; in the former your DBA name will come when form or after your form your sole proprietorship and long before you may want to consider converting to an LLC. In the latter case, your LLC’s name serves the same purposes as a DBA name for sole proprietorships, and you can usually register for DBA names for your LLC once you have filed your LLC formation documents with the state. Let’s get into the ramifications of both scenarios. 

For sole proprietorships: 

As a sole proprietor, you can register for a DBA name within the state you conduct business with the county clerk’s or state’s office. Some states require that you register with both the state and county clerk’s office, while other states only register you register your DBA name at a county level. You will be able to conduct business, open bank accounts, and pay and receive invoices in your business’ DBA name. You can have as many DBA names as your business can afford and keep track of, however, in having several DBA names, you must understand that each one has its own fees and paperwork associated with it, so more is not always better. It may be good to have a single DBA name, and trade and create a brand awareness of one, before moving onto another DBA that then requires brand awareness and product credibility. If the DBA name of your sole proprietorship is not already a registered LLC name in the state you are filing in, you may use your DBA name as your LLC’s name once you convert your business. Only in cases where sole proprietorships (with DBA names) are converted to LLCs, will need a DBA name before you form an LLC in the same name if it is not already registered with the state.

For limited liability companies:

Limited liability companies do not necessarily need DBA names. This is because most LLCs will market their business using their LLC’s name and create a product and brand awareness around their LLC’s name. Forming an LLC also means you will have limited liability protection, something that a DBA name and sole proprietorship does not afford you. An LLC can provide your business with much needed credibility and can do nothing but improve your business’ credit record. An LLC, as a formal business structure, offers much more advantages than a sole proprietorship with a DBA name. Yet LLCs can also register for DBA names. The procedure to add a DBA name to your LLC varies from state to state but you would generally need a DBA name if you want to conduct business under a name different to the one you have registered for your LLC. You can have as many DBA names as you desire, but again you would need to account for the additional paperwork and fees of multiple DBA names. Yet if this is what your business requires, there’s nothing stopping you from adding multiple DBA names to your LLC.  

In the end, an LLC business structure  affords you similar advantages to having a sole proprietorship with a DBA name, if not better. In forming an LLC, you can market, brand and promote your business, open bank accounts and make and receive payments, all under the name of your LLC, and all without needing a DBA name as you would to achieve the same goal with a sole proprietorship. To learn more on how to obtain a DBA name for your sole proprietorship or LLC you can visit TRUiC’s site. Their assistance and how-to guides may be just what you need to put your business on the map.