How Many DBA's Can an LLC Have?
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Registering an LLC is an important step in opening a business. But what happens when you already have an LLC but want to do business under a different name?
You’ll need a DBA in order for your LLC to do business under a different name. But what is a DBA? Is there a limit to the number of DBAs you can have? Read on to find out.
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What is a DBA?
A DBA stands for “doing business as” and can be thought of as a fictitious name for a company. Although it is fictitious in nature, a DBA is a legal name, and it must be registered with the authorities along with your LLC.
Entrepreneurs who open storefronts are the most common people to need a DBA. For example, if your name is Reed Smith, and you want to open a clothing store and a shoe store but separately. Under the rules of an LLC, both would need to bear the same name in order to operate legally, and that name would need to be the same as specified on the LLC.
But with a single LLC under the name Reed Smith Clothing, you can now operate under two different DBAs, Reed Smith Shoes and Reed Smith Dresses.
Basically, DBAs allow a single LLC to have multiple streams of revenue. It also allows an individual whose LLC is in their name to not need to put their name on every storefront. Think of it as an extra layer of privacy.
How Do You File a DBA?
A DBA is filed in the county or state where your business is legally located. You will have to start by requesting the name you want to do business with and keeping your fingers crossed that it is available. You can’t do business under a name that is already taken by another business.
You will need your LLC, your EIN (or social for sole proprietors), and your proposed DBA name in order to register. Typically, DBAs can be requested online, and once you fill out the application, the website will let you know when you can expect your response. It is different in each county. It doesn’t normally take longer than a week or two. It may cost a small fee to file a DBA–anywhere from $10-$100.
Do note, however, that you cannot begin working under your DBA until it is approved, as this is illegal. You will also need to renew your DBA periodically, so when you receive the approval, make a note of when you will need to file to renew.
What Can You Do With a DBA?
Once you have a DBA, you can have that name printed on storefronts or use it to open a business bank account. You can put the DBA on any official company documents, and when it comes time to sell that part of your business, it will be done under the DBA.
Something to keep in mind as you operate under your DBA is that it doesn’t offer the same protections as trademarking does. In fact, you may find, someday, as you try to expand over state lines, that another business has your DBA in that state. Therefore if you truly want to protect your business name for one reason or another, you should register it as a Trademark with the US Patent and Trademark Office.
How Many DBAs Can an LLC Have?
Now that you know the function of DBAs and how you can apply for one, you may be wondering how many DBAs a company is allowed to have. This question is not as easily answered because it depends heavily on the state the LLC is registered in.
For example, in the State of Colorado, you can have as many DBAs as you want, there is no legal limit and no real requirements beyond filling for them separately. But in California, while you can have as many as you want, each DBA needs to have its own logo, which can get costly to produce if you are planning to have 100 DBAs.
No matter which state you live in, multiple DBAs are allowed, and it is unlikely you will reach the limit of DBAs in any state before you run out of money to afford to file for them. Therefore you shouldn’t be afraid to register as many DBAs as you would like.
Are DBAs Required for an LLC?
In some states, you will find that giving your LLC a DBA is required. If you come across this and aren’t sure what DBA to give, you can always give the same title as your LLC. Just know that you will be using this name for almost every aspect of your business.
If you are struggling to navigate the legal framework of opening an LLC, don’t be afraid to get a lawyer to help. They can walk you through all the implications of opening an LLC, choosing a DBA, and more.
How to Choose a DBA
Once you’ve decided to add another DBA to your business, it’s time to look at how to choose a DBA. Though your choice may be restricted depending on your business and how many similar businesses there are in your state, you should choose a DBA that does all of the following:
- Represents the product you are selling
- Will influence your company in a positive way
- Matches with the image you want for the brand
Because it costs money to add each DBA and change around bank accounts etc., associated with a DBA, it is very important to take the time to select your DBA properly. The last thing you want to do is choose a poor DBA and need to pay to change it again in a couple of years.
The Benefits of Having Multiple DBAs
If it came as a surprise to you that you can have as many DBAs as you would like, it's important to know that there are several reasons for having a DBA. Below are some of the most common reasons companies have DBAs.
Doing Business in Other Locations
If your business wants to cross state lines, you may find that one name you operate under doesn’t mean the same somewhere else. For example, in Colorado, Beau Jo’s Mountain Pies is known far and wide to indicate a restaurant that is selling pizza. But if the company decided to expand to Texas, the word “mountain pies” doesn’t mean Pizza there, so they may select a DBA like “Beau Jo’s Mountain Pizza” to clear up confusion.
You Want to Expand
When a business wants to expand into other markets, it can be difficult to do business under a single LLC name. For example, if you have a print shop but want to go into the flower business, it will be very confusing to use the name Joe’s Print Shop when customers walk in to find a flower shop. Adding a DBA can help keep this confusion from happening.
You Want to Keep Your Name Out of It
While your LLC may be in your name, there may come a day when you want to sell your business. Then it will be kinda weird to hand over a business in your name to someone else. This is why it’s best to start a business that doesn’t have your name on, a DBA that can easily be sold to someone else, even if your name is in the LLC.
Creating a DBA without your name has also become increasingly important as identity theft becomes more and more and more of an issue. Even if you plan to operate your LLC from now until your death, an LLC can help protect you from scams and other forms of identity theft, especially because most things are easily discoverable online these days.
In the 1960s, a Neil Armstrong Cafe might have made a lot of money. But in the future, when generations are born that barely know who he is, there is likely to be a lack of customers. Using a DBA would allow the individual behind the LLC Neil Armstrong Cafe, to change the store name to something else without having to get an all-new LLC.
Final Thoughts on How Many DBAs an LLC Can Have
Overall, there likely isn’t a limit to how many DBAs your LLC can have. In fact, your budget alone will probably keep you from exceeding those limits since it costs a small fee to register your DBA.
Either way, it’s a good idea to have at least one DBA for your business in order to protect your own privacy. Additionally, DBAs after the first will depend on your expansion and trends. If you ever have questions about whether or not you need a DBA, don’t be afraid to reach out to a lawyer for help.
Reference Legal Explanations
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"How Many DBA's Can an LLC Have?". Legal Explanations. Accessed on November 24, 2022. https://legal-explanations.com/blog/how-many-dba-s-can-an-llc-have/.
"How Many DBA's Can an LLC Have?". Legal Explanations, https://legal-explanations.com/blog/how-many-dba-s-can-an-llc-have/. Accessed 24 November, 2022
How Many DBA's Can an LLC Have?. Legal Explanations. Retrieved from https://legal-explanations.com/blog/how-many-dba-s-can-an-llc-have/.