An LLC (Limited Liability Company) is a business structure that provides the limited liability features of corporations and the tax efficiencies and operational flexibility of partnerships.
This article will focus on the pros and cons of single-LLC membership versus multi-member LLCs, particularly in terms of how many DBAs your holding company can have.
Can My LLC Have Multiple DBAs?
The default rule for an LLC is that it has one DBA (its owner, if it's a single-member LLC).
If you want to have more than one DBA for your own LLC, then you need to follow your state's rules for registering additional DBAs.
Other states only require registration of those members who will be engaged in or managing the business.
It’s always a good idea to register as many DBAs as possible because this ensures that all LLC owners are on the same page in terms of their rights and responsibilities.
Single Member LLC with One DBA
The biggest advantage of a single-member LLC with one fictitious business name is that it is quick and easy to set up.
There are minimal formalities required to establish an LLC, and no filing or registration fees.
In most states, all you need to do is file Articles of Organization with the Secretary of State's office.
In addition, a single-member LLC is a "disregarded entity," which means that its tax implications are for a sole proprietor business line.
Multi-Member LLC with One DBA
A multi-member LLC provides more flexibility than a single-member LLC. A multi-member LLC can choose to be taxed like a partnership or like a corporation.
However, to avoid taxation as an S corporation, the LLC must have more than two members and meet other requirements.
Multi-Member LLC with Multiple DBAs
A multi-member LLC with multiple DBA application filings can be structured in several different ways, depending upon the business's needs.
It allows each member to operate their legal entity but access multiple sets of financial records, tax returns, etc. This benefit applies to foreign LLC businesses.
In addition, the multi-member LLC with multiple DBA names may be able to choose to be taxed as a partnership or a corporation.
It also allows you to use multiple DBA names instead of creating separate LLCs.
Benefits of Having Multiple DBAs
There are many advantages to having more DBAs. Some of them are that:
- You can separate LLC businesses from the parent LLC business entity with different branding.
- You can limit the personal liability of the members of the LLC since the LLC's assets are separate.
- You can take advantage of different tax treatments for businesses.
Ultimately, whether or not you should register more DBAs depends on the specific situation and goals of your LLC, therefore you must consult legal advice from a law firm.
It ensures you're working toward your best interests with two businesses.
Steps To Set Up a DBA For an LLC
Whether you have multiple businesses under one LLC or multiple LLCs, setting up a DBA for the new business entities is a relatively easy process. Here are the basic steps:
- Check Your State or Local Government Requirements
- Decide How Many Members Will Be Registered as DBAs
- Form Your LLC
- Register Your DBA With the State
- Check Local Requirements and Legal Documents
However, it can take some time to get all of your documentation in order and prepare the necessary forms for separate legal entities.
How Many Dba Names Can You Have?
There is no limit on the number of DBAs an LLC can own. It applies regardless of its fictitious business names.
However, only those engaged in the business need to register multiple names with the local government. In addition, each DBA can have multiple members.
Can You Have More Than One Dba Under Sole Proprietorship?
Yes, you can have multiple DBAs under sole proprietorship separate legal entities.
Each DBA is separate and distinct from the other DBA/sole proprietor.
Can You Change Your Registered Business Name?
Yes, in some states an LLC can change its legal name and keep doing business activities with its old DBA instead of filing more than one DBA.
How Many DBAs Can an LLC Have...
As a business owner, you should know that a single-member LLC with one DBA is the simplest and most tax-efficient structure for a small business.
However, a multi-member LLC with multiple DBAs may be a better option if the separate business entities have multiple locations or owners in different states.
As you can see, the process of setting up a DBA for an LLC is not overly complicated after getting the best fictitious business names.