Transforming your DBA into an actual business entity can be beneficial for several reasons. Here’s what you need to know about turning your DBA into an LLC:
What’s the difference between a DBA and an LLC?
An LLC is a legally recognized business entity, while a DBA (Doing Business As) Name is simply a way of branding your business, like a pseudonym. A DBA is NOT a legal name. For example, if a sole proprietor (let’s call her Jane Doe) doesn’t want to use her personal name for her auto body shop, she can obtain a DBA, like “Jane’s Auto Body.” In this case, her business would legally be recognized as “Jane Doe DBA Jane’s Auto Body.”
A DBA can be helpful for separating a business owner from the business itself—but in name only. Financially, a sole proprietor’s personal assets and business assets are still one in the same. This is where a business entity like an LLC can come in handy.
How do I form an LLC for my DBA?
You can form an LLC for any business you’ve previously operated using a DBA by going through the same steps you’d use to Start an LLC. While the process may vary slightly state-to-state, the general steps are the same:
- Designated a registered agent
- Name your LLC*
- Submit LLC Articles of Organization
- Get an EIN
- Write an LLC Operating Agreement
*Note that if you are transitioning from a DBA to an LLC, it’s still a good idea to check with your secretary of state’s office (or the equivalent governing body in your state) to make sure your desired business name is available to use. Even if you’ve been using it as your DBA name, your desired name might already be registered to an LLC in your state.
Should I keep my DBA name?
Probably not. Since you’ll be operating your business as an LLC, there’s no reason to keep your DBA name. In most states, you’ll need to deregister or dissolve your DBA with your state’s governing authority (usually the secretary of state). You should also contact the government authority in the jurisdiction in which you operated your DBA to alert them of your new business entity—they’ll let you know if any additional filings are necessary.
How do I make my new LLC official?
In addition to filing paperwork with the state, you’ll want to make sure your business accounts and paperwork are both tied to your new LLC instead of your former DBA. Here are some aspects of your business to consider:
- Bank accounts
- Vendor accounts
- State / city / county registrations (i.e. business licenses)
- Company letterhead
- Websites
- Business cards
- Telephone listings
- Etc.