A DBA( doing business as) allows a company to transact business using a different name. It generally takes place at the county level, but some states have state-level DBA filings. For sole partnership or partnership, unless a DBA is filed, the company name is same as the owners' names. A corporation or LLC can also file a DBA. What is the advantage of filing a DBA for corporation or LLC?
One example for filing for a DBA is for a business which has been bought by a new owner, but continues to operate as the same name. I once worked for a company which operated under a DBA. The situation here was that the business was originally family owned, however when the founder was ready to retire he sold the company to one of his employees. The company was purchased by an LLC that was set up with a new name, however it continued to operate under the old name via a DBA. The reason for this is because the machines that the company sold and serviced would last for decades, and when the time came for them to be serviced or replaced, customers could buy a new machine that came from a place with the same name.
There are a couple of advantages that I see pertaining to having a DBA or trade name. The first one was already mentioned, where a company is acquired by a new owner. The new owners will likely have a new legal name but may opt to convert the old name to a DBA, because it has already been established in the minds of customers. The other scenario is also business name-related; in doing, a corporate search a company may find that another entity in their state or another has the corporate name that they were interested in. A way around this is to establish a different, unique legal corporate name, but retain a trade name that is similar to original name. For example, consider that AA healthcare company came after A healthcare company. I have observed cases where AA will have trucks with the same color scheme as the branding for A, plus a DBA with a very similar name, in a not so subtle attempt to steal market share and prospect customers by emulating A healthcare company.
I agree with the previous posts. There are many benefits in DBA compared to a LLC. The benefits are listed in the below link are - Compliance, Business banking and Flexiblity.
https://exitpromise.com/what-is-a-dba/
Another advantage is the low-cost and easy to file which provide great flexibility for start-ups or expanding business. They come with lesser paperwork compared to LLC. But there are few hassle as well - it is restricted to the state where the business is done and new DBA needs to be filed in expanding the business to other state.
A DBA( doing business as) allows a company to transact business using a different name. It generally takes place at the county level, but some states have state-level DBA filings. For sole partnership or partnership, unless a DBA is filed, the company name is same as the owners' names. A corporation or LLC can also file a DBA. What is the advantage of filing a DBA for corporation or LLC?
Some of the benefits of filing a DBA for corporation or LLC is that it allows for increased flexibility, privacy protection, targeted branding, and easy legal compliance. Even with the pros, it also has cons, as does many things. For instance, filing a DBA has fewer tax benefits, fewer liability protections, and no exclusive rights to a business name.
