Business owners frequently wonder if they can structure multiple businesses under one LLC – there are several ways to do this, but a popular way is with DBAs. DBAs (doing business as) are extra names businesses can use alongside legal names. A sole proprietor, partnership, LLC, or corporation can have multiple DBAs. Let’s take a look at how it works.
What is an LLC?
A limited liability company is a business structure that protects individuals from being held liable for debt liabilities and financial losses. In the event of business failure or legal action, liability is assumed by the company rather than the LLC managers.
LLCs are easy to set up, and millions of entrepreneurs have one. In most states, you can even set up an LLC online. This protection of personal assets makes LLCs a popular type of business. If you have an LLC, you can use DBAs. But DBAs aren’t separate businesses and don’t offer additional liability protection, only an assumed name.
What is a DBA?
Doing business as a “DBA” may also be known as a trade or fictitious name. Your DBA will differ from your own or your business’s legal name. Filing for a DBA allows you to conduct business under a different name.
Who needs a DBA?
Not all businesses require a DBA, and it depends on your business needs, preferences, and the legal entity you’re setting up. DBAs are popular with franchises and companies that have multiple branches of business. For example, a hairdresser branching into nail services or a skincare brand opening a cosmetics business. DBAs allow you to operate your business under one umbrella while still having several names and identities to operate under.
Keep in mind that you’ll need to abide by your state laws when setting up a DBA, and they must be followed each time for separate DBAs.
How many DBAs can an LLC have?
According to national laws, an LLC can have unlimited DBA registrations. DBA names are not separate legal structures; they are business names that differ from the name of the LLC. Legally, an LLC isn’t limited to the number of fictitious business names it can file for; it’s unlike having a single business registered on the LLC articles of organization. You can use as many trade names as required as long as they are available for use.
When does it make sense to register multiple DBAs for an LLC?
There are several reasons you might want to register multiple LLC DBAs, even with the various state filing fees. Common reasons include the following:
Due to compliance requirements: In states such as Georgia and New York, business name registrations are issued by counties, not state authorities. You’ll need to register multiple DBAs if your business operates in multiple counties.
For marketing/branding purposes: A business might need to use different names for different products or service lines. For example, ”Thomas & Smith LLC” could register ”Thomas & Smith Law Firm” as a DBA and advertise it as ”TS Law” for marketing purposes; they could get another DBA for the trade name.
When operating/having a foreign LLC in several states: Companies operating nationwide may require DBA registration in other states, for example, ”Thomas & Smith LLC” may have ”TS Law Alabama” or ”Thomas & Smith Georgia” registered, creating multiple business names without forming separate LLCs.
When changing a business line: Sometimes, companies need to launch a similar product in an adjacent category. For example, ”Thomas & Smith Law” may register ”Thomas & Smith Real Estate”; they don’t need to restructure their business to trade under a new name.
When a company needs a fresh start: Organizations occasionally want to start from a clean slate. Creating a new DBA lets the business pursue a new direction without forming a new LLC.
To distinguish different company divisions. An LLC can act as a holding company – meaning it pursues several business activities while operating as a single entity. There are several ways for this to happen, with umbrella and series LLCs, but DBAs can also be used to differentiate between each division or business activities.
How to handle DBA registration
The DBA registration process is easy – most states offer a hassle-free online form that only takes a few minutes, or you can complete a paper application and mail it to the Secretary of State. In Florida, you’ll need to answer some basic questions and pay a $10 state filing fee. Overall, you’ll need to provide basic details, including:
- Your LLC name
- Company address
- Nature of your business
- EIN and state registration number (if you have it)
- Signature and date
Before you register a DBA, small business owners should search to ensure their chosen trading name is available in that state; LLCs can repeat this process to register a subsequent DBA.
Wrapping up
Registering multiple trading names may be necessary; business needs may require multiple names, and legally protecting those names is crucial. For example, a hairdresser branching into nail services or a real estate agency operating across multiple states. DBAs allow you to operate your business under one umbrella while still having several names and identities. A DBA ensures your name is legally recognized and can’t be used by a competitor. DBAs are easy and usually cheap to register, and a business can have unlimited DBAs.
