Tax Id Number Information
DBA VS CORPORATION VS LLC
Take
this Quiz
to You'll Find Whether You are Required to Register a DBA ,
Obtain a Tax Id or Wholesale License ,
Incorporate, Form an
Limited Liability Company , or Register Your
Business by Filing a
Business License.DBA
A DBA is just a Document you are legally required to file. It helps you open a bank account and be legal but it does not protect your personal assets.
A Corporation or Limited Liability Company
A corporation protects you from civil, and financial liability as well as saves taxes for you.
A Corporation or Limited Liability Company is a Legal Person. I.e., it is its own entity like you and me with the difference being that the corporation is a person in legal papers. Its birth Document is the filed corporate Document and its birthday is the file date. Its social security number is a federal business Tax Id Number.
A corporation or Limited Liability Company can sue and be sued. It has its own assets. Though the shareholders are the owners, the shareholders are not responsible for the debts or liabilities of the corporation.
The bottom line is that since it is a separate person, even though you will be the owner, you will not personally be responsible for the debts or liabilities of the corporation. So if a court judgment is entered against the corporation, the only assets that can be seized, are the corporate assets.
If you have separate bank accounts, and the corporate assets are one desk, one computer and $1000 in a bank account, that is all that can be seized. No one can go after your home or personal bank account.
Should you file a DBA , Incorporate, or Form an Limited Liability Company
In general, if you are one person, and have a lot of personal assets, incorporate or form an Limited Liability Company. You will be protected. If you don't have a lot of assets ( such as a home and an expensive car ), you may want to just file a DBA to start. A corporation depending on the state you want to incorporate, or form an Limited Liability Company , may cost $100 to $200 more than a DBA but it protects your personal assets. A DBA does not protect you. If you file a corporation or an Limited Liability Company , you don't need a DBA.
Note: If you incorporate, the default type of incorporation is a "C" corporation. Then, you can change it to an "S". So, just go ahead and incorporate or file an Limited Liability Company , you don't have to worry a lot about the type of corporation or Limited Liability Company.
Should you get an Limited Liability Company or a Corporation?
If you are a small business just starting out, just get an Limited Liability Company to start. In most cases, you will not be wrong. An "S" corporation is also a good choice. You cannot go wrong either way. The point now is to get some cheap insurance to protect your personal assets and both of the above are good choices. Later, you can change structure or type of entity.
Should you incorporate or form an Limited Liability Company in another state?
Just keep things simple for now. Just file in your state, and you will be alright and able to save money and have corporate protection. It is just too complicated and it costs a lot more to incorporate in a state other than the state in which your business is located. Also, you may have to incorporate or form an Limited Liability Company in your state as well in the other state. That will cost you double.
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Frequently asked questions about DBA filing
. A DBA , a “DBA ” (Doing Business As), an “assumed DBA ” or a “trade name.” are all the same.
Corporation or an Limited Liability Company DBA
(back to top)You only have to file a DBA if corporation name is different from trade name.
(back to top)If I am Doing Business under my personal name, do I need to file a DBA ?
You don't need to file a DBA if you doing business in your own personal name. Only if the DBA is a name other than your personal legal name.
(back to top)How does the DBA filing protects my business name?
Generally, the name is not protected but in some states the filing creates a rebuttable presumption that you have the rights to that name.
(back to top)Corporations or Limited Liability Company s Doing business under a trade name
You only have to file a DBA if corporation name is different from trade name. Do I have to publish my DBA ?You may depending on the state you are doing business. Publication in included in your filing fee.
When can I start my Business and open a bank account?
You need to file your DBA before you can start a business or open a bank account.
Do you conduct a DBA search?
Yes, in most states, we will search for DBA availability.