6 Benefits of a DBA for the serious entrepreneur
When it comes to deciding whether or not a DBA will be beneficial for your business, there is a mountain of information out there ready and waiting to confuse you. Things can get particularly puzzling if you are debating between registering for an LLC or filing for a DBA. To help you speed the decisionmaking process along (and simplify it) TRUiC lays out 6 benefits of having a DBA for your business.
- Before we go any further, if you find yourself asking “What is a DBA?” we have got you covered.
Advantages of a DBA
- DBA’s keep things simple
A business cannot operate smoothly and fully functionally if its inner workings are tangled and complicated. Thanks to the simple filing process and legal upkeep, a DBA keeps business operations straightforward. This is especially relevant when compared to complying with the numerous regulations for running an LLC or corporation.
- A DBA saves money
This is a bonus for all entrepreneurs- especially for the start-ups. When it comes down to it, filing for a DBA is more cost-effective than registering for an LLC or corporation. (This is something to keep in mind if you are battling when deciding between the two). Depending on the state, getting a DBA will cost between $10-$100. Additionally, if you look at it another way, a DBA is also cheaper than registering for a legal name change.
- Note: A DBA does not require an individual/separate business bank account. Although managing your business’s funds might get a bit tricky, this is another way in which DBA’s can keep business simple and costs down.
- DBA’s assist with re-branding your business
Re-branding is a scary feat no matter the industry. A DBA helps you to put forward a new name, and subsequently a new image, out to the markets. This is because you do not need to use your legal name or business’s registered name to go about operating your business as a DBA permits you to conduct business under a completely different name.
- Tip: Deciding what name your DBA should have registered does not need to be too difficult. A DBA can be an acronym of the current name, a shortened version of it or even something brand new.
- There are no separate tax requirements for a DBA
This benefit does prove itself to be handy and can be time/resource saving. Due to the fact that a DBA is not viewed as a legal entity, there is no need to file separate taxes for one. The registered business that the DBA is under will be responsible for all tax duties and responsibilities.
The advantages of a DBA also can depend on the type of business structure you are operating. For simplicity, let us analyse them according to sole proprietorships and partnerships and limited liability companies and corporations.
- The benefit of a DBA under a sole proprietorship/partnership
A major benefit for this particular business structure is banking. Filing for a DBA will enable you to open up a business bank account and therefore make payments and deposits under this name. As a result, a DBA can provide your business with a more professional image. For example, business owner “Jane Gonsalez” will be able to collect payments and deposit funds into her business bank account which is under her confirmed DBA name of “Jane’s Jams”.
- The benefit of a DBA under an LLC or corporation
Established LLCs and corporations as well can benefit greatly from choosing to register for a DBA. DBA’s can help your business launch new product/service lines and target new markets. For example, if the LLC of “Milkhouse Soaps” (which sells soaps) wishes to release a different product line of shampoos without registering it as a separate LLC, a DBA of “Milkhouse Shampoos” would enable them to reach out to previously untapped markets.
