I have an LLC. When I mentioned the idea of getting a DBA for my selling side, a CPA I spoke with said that I would need to have completely separate accounting and bank accounts for that (greatly complicating things and making it more expensive to maintain come tax time). A quick google search seemed to confirm that DBAs need to have their own bank accounts/accounting, etc. If you ultimately sign all legal documents (buying and selling) under your LLC name, and essentially just use the DBA as a marketing tool for the selling side, can you keep it simple, and have all financial things just under the LLC?
@stephb I’ve never heard that before. I’ve got a DBA for two of my LLCs and we do not have a separate bank account or quickbooks files for either of them. It all runs under the legal name of the LLC (not the DBA).
I saw it done this way hundreds of times when I was in the banking world, so I’m a little baffled by what you’re being told. Maybe there’s a misunderstanding about what you’re trying to do?
Disclaimer: I’m not an attorney and none of this is legal advice.
The DBA is there to give me the right to use a different trade name in place of my LLC name. If I want to create a logo or a sign with that trade name, but still have it being used in reference to the LLC, that’s the purpose of filing an assumed name at the state level.
A quick google search seemed to confirm that DBAs need to have their own bank accounts/accounting, etc.
Can you point to the sources that say this? Whatever you’re reading online, perhaps it would add some clarity to when/why this would be necessary (I’m genuinely curious now).
If you ultimately sign all legal documents (buying and selling) under your LLC name, and essentially just use the DBA as a marketing tool for the selling side, can you keep it simple, and have all financial things just under the LLC?
I’ve done it this way for many years now (with my CPA’s and attorney’s blessing), so again, it’d be interesting to hear more about why your CPA has a different take on this.
@retipsterseth hi, I take this post as an opportunity to ask a couple of questions on dba: I opened my in AZ in order to be able to sell my properties there without using my LLC name, then I heard from a bunch of experienced investors that they’ve been using fictitious names on their selling websites also without opening any dba.
Questions are:
- Do you use a separate dba for each of the States where you operate?
- Not as legal advice but, at your knowledge, do you know if, in order to sell under a fictitious name, a dba is mandatory or not?
@arturo careful - unless I’m grossly misunderstanding what you meant, I believe using a dba or fictitious name without properly registering it can land you in hot water. For example, in Florida:
“Failure to file a fictitious name registration is a misdemeanor of the second degree and punishable, as provided in section 775.082 or 775.083, F.S.” (excerpt from https://www.dos.myflorida.com/sunbiz/start-business/efile/fl-fictitious-name-registration/ )
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@arturo if you don’t register your dba in connection with your LLC, my understanding is that you’re basically acting as a sole proprietorship, which means any business you conduct under that fictitious business name isn’t protected by the umbrella of your LLC, it falls directly on you personally.
Some people do this intentionally, but even then, they would still have to register their business name at the county level, just to let the local business authority know that they are doing business under a certain name, and they’re running everything through their personal bank account and/or as a sole proprietorship. This would get around the need for registering with the state, but something still needs to be filed on the local level.
Not to mention, if someone else has already registered the same name you’re using (i.e. - they did it properly and you didn’t - you just started using a name because you liked it, without checking whether someone else was already doing business under the same name), you could be on the hook for violating their trademark or infringing on their business name (this is a bit over my head - you’d have to talk with a state-specific business attorney to get more clarity on this… but even from my non-legal understanding, it seems fairly obvious that you’d clearly be overstepping by capitalizing on the brand equity that someone else has built
under a name that is identify or very similar to yours).
@retipsterseth and @mizugori thank you very much for the insights! What you say makes total sense: I will make sure to file my DBAs whenever i will sell in order to avoid unpleasant situations.
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@retipsterseth the two following websites are examples of where I was seeing the “multiple accounts” information (looking up that specifically after the CPA comments). But now that I have more context, perhaps this is only necessary if your DBAs are doing very different types of business, not all essentially the same thing (buy or sell vacant land) under the same LLC
https://www.upcounsel.com/multiple-dbas-one-bank-account
https://smallbusiness.chron.com/can-one-llc-two-dbas-49502.html
I think I was also under the impression that two DBAs were being recommended (for buy and sell) vs the LLC for one, and a single DBA for the other side. Perhaps it gets messier with multiple DBAs under the same LLC? So maybe I phrased my question wrong when I asked the CPA.
Thank you so much for the clarification! I really appreciate it.
Does it mean I have an issue if I have a sales website with a different name than my company?
Usually, all my BC contracts are signed in the name of my company. Do I need to register my selling website name somewhere for that?