- Sole proprietorships offer no liability protection.
- DBAs only brand a business name.
Advantages and Disadvantages of DBA and Sole Proprietorship
Pros:
- Organisational and administrative simplicity.
- Integration of business and personal incomes and costs.
Cons:
- Personal liability for all business matters in a sole proprietorship.
Setting Up a Sole Proprietorship Using a DBA
- Registering a DBA with a state is a step in officially forming a sole proprietorship.
- Use of a DBA is always optional in every jurisdiction.
Comparison Between DBA and Sole Proprietorship
- A sole proprietorship is a legal structure, while a DBA is not.
- A DBA is a legal requirement to operate a business with a trade name different from the registered legal name.
Main Disadvantage of a Sole Proprietorship
- No separation between business assets and personal assets.
Taxation and Liability Considerations
- Sole proprietors are personally liable for any debts of the business.
- DBAs offer no legal protection for assets.
Clarification on DBA and Sole Proprietorship
- A sole proprietorship is a type of business entity.
- A DBA allows operating under a name other than your own.