Should I have an LLC or DBA?

Uncategorized Jun 01, 2020

I get this question ALL the time! Should I form an LLC or DBA?

Being a sole-proprietorship and filing a DBA is the easiest, cheapest and fastest route. In order to become a DBA you must file a form with your local County office and then submit the DBA for publication, which must be published for 4 weeks in a row.

The publication puts others on notice that you are intending to do business under that DBA name. Once the notice has been published and the County receives confirmation of the publication, then you are free to do business.

A DBA is great for a quick way to start your business. However, a DBA doesn’t afford you a ton of personal protection. It acts as an extension of you. So if you don’t have the right protections for your business, this leaves you open for potential claims against you. For example, if you get sued for your business as a DBA the claimant can come after your personal assets.

An LLC, on the other hand, provides a lot more protection BUT it is more costly and timely to file. An LLC acts as a separate entity, like a separate person rather than an extension of you. That means that should a dispute arise in your business the claimant can ONLY go after business assets.

The cost of an LLC varies from state to state. For example, in California the yearly fee is $800. LLCs also have a ton more paperwork to do! You must file Articles of Organization and a Statement of Information. Hiring an attorney to file these for you will also cost additional money.

Both are good options, depending on your needs and where you are in your business. As always, speak to a local attorney for more detailed advice concerning your business.

Having the right contracts in place can help protect your business even further, whether you are a DBA or an LLC. You can control where a dispute can take place, the extend of what you are liable for, the scope of things you are liable for and protect the content on your website, blog posts, courses and more.

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