DBA stands for "doing business as". An LLC, or limited liability company, is a separate legal business entity.
Key Differences
- Liability protection: With a DBA, there is no legal separation between personal and business assets. An LLC protects owners’ personal assets from business debts and lawsuits.
- Paperwork and compliance: LLCs require more paperwork and compliance than DBAs, which are simpler to set up.
- Business name rights: LLCs provide exclusive rights to the business name in a state.
- Tax requirements: Taxes for DBAs pass through to the owner’s personal tax return while LLCs have more complex tax requirements.
Making Your Decision
- Consider your business risk and liability exposure.
- Understand the legal and tax implications.
- Weigh costs and administrative requirements.
- Consult experts to ensure you make the best decision.