What Is the Difference Between DBA and LLC?

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Definitions of DBA and LLC

  • DBA: "Doing Business As" or a fictitious name used instead of your legal name.
  • LLC: A separate legal business entity that provides liability protection.

Key Differences Between DBA and LLC

  • Liability protection: DBA offers no separation between personal and business assets, while an LLC protects owners’ assets.
  • Paperwork and tax requirements: LLCs require more paperwork than DBAs and have more tax requirements.

Comparison of LLC vs DBA

  • Liability: LLCs limit personal liability regarding business debts and obligations, while DBAs do not.
  • Setup: Setting up a DBA is more straightforward compared to an LLC.
  • Establishment Cost: DBAs typically cost less to register than LLCs.

Important Considerations

  • Evaluate risk, legal, and tax implications when deciding between a DBA and LLC.
  • Review thoroughly, seek expert advice, and choose the option that aligns with your business vision.

Summary

  • DBAs allow creative naming and are simpler and cheaper to establish than LLCs.
  • LLCs offer personal liability protection, flexibility in tax treatment, but require more paperwork and accounting.

Professional Help and Decision-making

  • Consult experts to consider costs, legal protection, and tax implications when selecting between a DBA and LLC.

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