DBA vs. LLC: What's the Difference?

A DBA ("doing business as") is a registered name a business uses in place of its legal name. An LLC is a separate legal entity that can protect its owners from personal liability for business debts. A DBA does not create a business or protect you. It only lets an existing person or company use another name.

What a DBA is

A DBA is a name that a person or company uses in business instead of its legal name. Depending on where you are, it may be called an assumed name, a fictitious business name, or a trade name. They all mean essentially the same thing.

For example, if Jane Smith runs a bakery as a sole proprietor and wants to call it "Example Bakery," she would usually need to register "Example Bakery" as a DBA. The business is still just Jane Smith. The DBA registration puts on public record who is behind the name.

Where you file depends on the state. Some states handle DBAs at the state level, some at the county level, and some require both. Some also require you to publish a notice in a local newspaper. The state-by-state list links to each state's business registry, which is a good place to start.

What an LLC is

A limited liability company is a legal entity that you create by filing a formation document, such as articles of organization, with the state. Once formed, the LLC is legally separate from its owners (members). It can own property, sign contracts, open bank accounts, and sue or be sued in its own name.

The main reason people form an LLC is limited liability. In general, if the LLC can't pay its debts or loses a lawsuit, the members' personal assets are protected. The protection has limits. For example, owners are usually still responsible for their own conduct and for debts they personally guarantee, and courts can disregard the LLC in some circumstances. But this protection is something a DBA never offers.

An LLC also comes with more upkeep. Most states require annual or periodic reports and fees, and every LLC must keep a registered agent. For a comparison with the other common entity type, see LLC vs. corporation.

Key differences

• Legal entity. An LLC is a separate legal entity. A DBA is only a name attached to an existing person or entity.
• Liability protection. An LLC can shield members' personal assets from business debts and claims. A DBA provides no protection. A sole proprietor with a DBA is personally liable for everything the business owes.
• Where you file. An LLC is formed with the state business registry. A DBA may be filed with the state, the county, or both, depending on the state.
• Taxes. A DBA does not change how you are taxed; income is taxed the same way as the underlying owner's. An LLC has its own tax options. A single-member LLC is taxed like a sole proprietorship by default, a multi-member LLC like a partnership, and an LLC can elect to be taxed as a corporation.
• Ongoing requirements. DBAs may need to be renewed periodically in some places. LLCs typically have annual reports, fees, and record-keeping obligations.
• Name protection. Forming an LLC generally prevents another entity from registering the identical name in that state's registry. A DBA filing often gives little or no exclusivity, and in some places two businesses can register the same DBA.

Using both: an LLC with a DBA

A DBA and an LLC are not an either-or choice. An LLC can register one or more DBAs to operate under names that differ from its legal name. For example, "Example Holdings LLC" might run a café as "Example Coffee" and a catering service as "Example Events." Each brand is a DBA of the same LLC, so all of them share the LLC's liability protection. That also means a problem in one line of business can affect the assets of the others.

If you are an LLC and use any name other than your exact registered name, including dropping the "LLC," many states expect you to register it as a DBA.

Neither one gives you trademark rights

Registering a DBA or forming an LLC with a name does not give you trademark rights. State registries generally only check whether a name is available within their own records. They don't check whether someone else already uses that name as a brand. You could register a name and still be infringing on another business's trademark.

Before you commit to a name, search the U.S. Patent and Trademark Office's trademark database at uspto.gov, check the business registries in states where you plan to operate, and search the web for other businesses using the name. Our guide on how to check LLC name availability covers the state side. For trademark questions, a trademark attorney can help.

Banking under a trade name

If you want customers to be able to write checks or send payments to your trade name, you will usually need a bank account in that name. Banks commonly ask to see your DBA registration before they will open an account or add the trade name to an existing account. For an LLC, they will also typically ask for the formation documents and an EIN.

Which one do you need?

A DBA alone may be enough if you are a sole proprietor or partnership, want to use a brand name, and are comfortable being personally responsible for the business's debts. It is the simpler and usually cheaper route.

An LLC is worth considering if your business has meaningful risk, such as customers on your premises, employees, significant contracts, or debt, or if you have partners and want a formal structure. You can always add a DBA to the LLC later.

Liability and tax consequences depend on your situation, so it is a good idea to talk with an attorney or accountant before choosing a structure.