# dba? llc?



## Use Less (Nov 8, 2007)

Do you have either a dba or an llc for your home business? Can you explain the difference? How about for something like a farm-market or craft-show business off-site? Thanks.


----------



## clovis (May 13, 2002)

I've always only had a DBA, especially since I had very small amount of liability exposure.

I think this very much has to do with what type of business you are conducting.

Making coat racks or screen printing? A DBA will most likely work.

Making baby food or toys? Starting a trailer repair business? Having farm tours for thousands of people? In these businesses, where you have lots of liability exposure, I'd definitely look into a LLC.


----------



## Marshloft (Mar 24, 2008)

I've had both.
Starting out I was DBA, after a few years and the liabilities climbed , I had to go LLC.
I really don't know what service LLC changed things for me,,, have to ask my accountant.


----------



## edcopp (Oct 9, 2004)

DBA links your business name to you. For example if your name is Mike Smith, and your business name is Hilltop Carry Out. The state will simply check the business name and it will tell them that Mike is the owner of that name.

This is usually very cheap to do. The main purpose is to make it easy for the state to see if you are filing tax returns and so on.

License is a permit to do something. Costs vary. For example Hilltop may need a license to sell Beer, and or tobacco, and many other things. Each license will have a fee (tax) required as well as the name of the real owner of the DBA. This way if Mike goes out of business and owes some taxes the government can come find him and place liens on his property for the money owed, and the penalties, and the cost to find him.

Please do all the paperwork. Thousands of government employees need the cash.


----------



## unioncreek (Jun 18, 2002)

When we had our restaurant we asked our attorney which one we should use and he said. An LLC will not totally protect you it someone wants to sue you. Your state may be different, but you may want to consult someone.

Bob


----------



## maddy (Oct 30, 2010)

A d/b/a ("doing business as") is simply a trade name. You can have a trade name regardless of the form in which the business is organized. For example, "Ronnie Mac's Drive-In" is a d/b/a for a business that probably is a corporation. (Who would buy milkshakes from a place called B&R Ventures?) In fact, most corporations and LLCs that deal regularly with the public use a d/b/a (trade name).

So I assume that what you're really asking is whether you should organize the business as a sole proprietorship or an LLC. State laws vary, but in general, LLCs provide better protection than sole proprietorships for the principals (human owners) of the business. If you're a sole proprietorship, the business' obligations are your obligations, plain and simple.

With an LLC, the principals of a business have some protection against the liabilities of the business, but that protection is not absolute. Again, state laws vary, but in general LLCs do a good job of insulating the principals against contractual liabilities, but are not so good as far as protecting them against tort-based liabilities (liabilities arising out of negligence or intentional conduct, such as personal injuries or defamation). So if a principal's main concern is for insulating himself the consequences of a default on the company's monetary obligations, an LLC is a reasonable option. However, to the extent that a business owner wishes to protect himself against tort-based claims, his principal line of defense is--you guessed it--insurance.

In actual practice, organizing as an LLC may not be all that valuable even for insulating against debt-based liabilities. The reason is that small businesses (especially those without substantial assets) usually cannot get loans or credit accounts without posting a personal guarantee. (If you were a creditor, would you loan money to an LLC knowing that the business could fold up shop over night and that there would be no human being to go after?) If a business owner signs a personal guarantee, he is agreeing to be personally responsible for the debt regardless of the form of organization. So in that case, it wouldn't help to have organized as an LLC.

Just some things to think about as you research the issue further.


----------

