Should I & where would I register a DBA?

vesonexdean · 08-30-2009, 01:07 PM

I'm starting a business that deals with consulting and teaching people how to build and monetize their business website with things like wordpress.

I know that I can't just call myself a name other than my legal name without some sort of documentation. I've been reading on here and doing some research on Google about what type of business structure I should use. I found that a sole proprietor seems to fit what I'm doing, I don't have any employees, I'm the sole owner and my products are digital.

My question is whether I should register a DBA and get an EIN number, I've looked online for where I could do this and alot of places offer this service, I found this one that would do both...

Doing Business As (DBA) Filing - DBA Registration - Ficticious Business Name | Incorporate.com

I'm not sure if anyone has used them before or how it's going to work out. So again I was wondering whether I should register a DBA because I do want to call me company something other than my name and do I need an EIN # if I don't have any employees.

Thanks for your help everybody.

~Vesone

LSnyder · 08-31-2009, 01:32 PM

You can start your own business under anything you want. You might want to try an LLC. Usually, when a company uses a DBA, they intend on keeping the actual business name anonymous. Either way, you would still need an EIN number. Where are you located?

vesonexdean · 08-31-2009, 01:46 PM

thanks for responding, I'm located in Indiana. I don't necessarily want to hide my business name I just want to have it registered as something other than my name, which from what I understand is the only way you don't necessarily have to register your business name. I could be wrong though.

Would you recommend an LLC?

LSnyder · 08-31-2009, 02:59 PM

Unless you are going to be in business under your ss # I would suggest registering, filing for an EIN and opening a business bank account. This way, you protect your "personal life" safe from "business life" It's a very simple process and minimal monies are involved. Filing for the EIN is free.

Lisa

vesonexdean · 08-31-2009, 03:08 PM

I noticed that it is significantly more to register as an LLC rather than a DBA and getting an EIN, where would you suggest getting an EIN & DBA, I found a place that seems pretty popular you're probably familiar with it, they're called

Legalzoom.com

They said it would be just under $200 for DBA and EIN

Thanks for your help Lisa

GlobalWealth · 09-06-2009, 01:03 PM

For tax reasons, an S-corp offers you lower tax rates. With and S-corp, you only pay self-employment tax on your salary, but with an LLC (unless elected to be taxed as an S-corp), you pay self employment tax on the full income. For example, if the company earns $100k and you pay yourself a $50k salary, you would pay the self employment tax of 15.3% on the $50k and your income tax on the full $100k. For an LLC (or sole proprietor) you would pay the 15.3% plus the income tax on the full $100k.

bizdev · 09-07-2009, 04:04 PM

For your type of business you don't need an EIN or an LLC. You were on the right track with a DBA. Just go to your local county offices. Not sure about Indiana, but Illinois is very inexpensive (under $10).

With the DBA you can open a business bank account.

I've had a business with employees (EIN required) and internet businesses with no employees (no EIN required). I've filed as an Scorp (very expensive and complicated) and as a sole proprietor (very simple at tax time...well, reltatively speaking).

Don't complicate matters any more than you need to for your type of business. Consult with an attorney and/or accountant. First visits are usually free and you can get a lot of good info.

Good luck!

rdc · 10-09-2009, 06:16 AM

Note that a DBA and an LLC are not in the same category. An LLC is a type of business entity (as are sole proprietorships, partnerships, and corporations).

A DBA is technically a license, and is applicable to all types of business entities (including a sole proprietorship, which may be the best option for you).

Yes, you definitely do need a DBA for your situation, and can usually file for this yourself (don't pay someone else simply for this) with your State Department of Licensing, or your County/City (google and find out exactly which office handles this for your state--it's often the same place as where you go for a business license for your state/county/city).

No, you do not technically have to obtain an EIN if you are a sole proprietorship and do not have any employees; you may use your SSN for a business banking account and for your federal taxes. However, the SSN may be public information when you register for a business license (which is usually required). So you may wish to obtain an EIN. Obtaining an EIN is free and fairly simple, via the IRS's website.

I would avoid LegalZoom as it is overpriced and just does what you can do yourself; if you need real guidance/services beyond what you can do yourself on the internet, you will not find it at LegalZoom; you will need a professional.

Lastly, while you should really consult an attorney on this, you may want to at some point consider forming a business entity which would confer limited liability, to shield your personal assets in case of a legal liability arising. For a tiny web based business, this is probably not a high priority, unless you are selling services/products that have a chance of harming someone, or if you worry that you may mess something up on a business/contractual level and be sued. If you go this route, an LLC is probably the most suitable form for you; but again, avoid doing this with LegalZoom because they will only provide the bare bones setup (not much different than the minimum you can do yourself--filing for an LLC via the state's website, but this would only provide a minimally functional LLC).

Hope this helps!

bizdev · 10-09-2009, 08:05 AM

Quote:

Originally Posted by rdc

Note that a DBA and an LLC are not in the same category. An LLC is a type of business entity (as are sole proprietorships, partnerships, and corporations).

Lastly, while you should really consult an attorney on this, you may want to at some point consider forming a business entity which would confer limited liability, to shield your personal assets in case of a legal liability arising.

Absolutely correct that the DBA and LLC are not in the same category. Hope I didn't infer otherwise.

As for the LLC shielding personal assets, this is not all encompassing or the be-all-end-all of protection. Business owners are continuously asked by vendors, landlords, banks, merchant account co's, etc, to sign personal guarantees. That personal guarantee essentially "voids" the so-called protection.

rdc · 10-09-2009, 06:15 PM

That's absolutely right re the LLCs.

A lot of people have the idea that they can form an LLC, get a bank loan to the LLC, and then if the "LLC" defaults, they are home free since debt will stop at the LLC level. While this would be true in theory (legally), it never happens in practice because the bank will want a personal guarantee/security, etc.

Furthermore, most truly profitable and growing businesses will need insurance, anyway, because while personal assets may be shielded, the business is still subject to being totally wiped out by a lawsuit.

bizdev · 10-10-2009, 09:24 AM

rdc I have sent you a private message.