Opening a Bank Account with a DBA
Yes, you can open a business bank account as a sole proprietor using a DBA. To open an account with a DBA, you’ll need:
- Photo identification
- DBA certificate
- Business licenses/permits
- Social Security card or federal tax ID certification
Most banks require a certified DBA copy to open a business bank account. You don’t need separate bank accounts for a DBA and LLC unless you have separate DBAs. Doing so can simplify accounting and taxes. You will almost always open the LLC account in the LLC name. That’s the legal entity that owns the money.
Establishing Legitimacy with a DBA
By protecting your DBA name and complying with regulations, you can establish legitimacy. Whether transitioning from a DBA to an LLC or corporation or managing multiple DBAs, this guide has equipped you to make informed decisions and thrive. What does having a DBA mean? You can procure an EIN from the IRS and open a business bank account. An EIN identifies your business for taxes. It’s required if hiring employees or opening a 401(k). However, it can help freelancers too.
Using a DBA Effectively
Registering a DBA name lets you use it legally without an LLC or corporation. You can open a bank account, write contracts and sell part of the business with a DBA. DBA protections don’t usually cross state lines. For stronger protection, register as a trademark with the USPTO. This isn’t required to make the DBA official. With a DBA as a sole proprietor you can use it to open bank accounts, promote your business and do other transactions. You can even pay personal bills from your DBA account. However, other structures like an LLC have more separation. Even as a sole proprietor it’s best to separate personal and business finances. You can get a business credit card with a DBA.
Joint Accounts and Account Requirements
You’re not required to have a business bank account. However, there are reasons to have a joint account with your partner. You must provide a Social Security number or Employer ID Number to open an account. If an LLC, you need articles of organization. If officers aren’t listed, you also need a corporate resolution. You can simplify accounting by keeping DBA income/expenses separate from your entity. A bank will need your assumed name certificate to open an account.
Difference Between LLC and DBA
Many banks do not even charge you to have separate bank accounts and doing so can make the accounting and tax process much easier. Is LLC better than DBA? The biggest difference is liability protection. An LLC provides limited liability protection while a DBA does not.