DBA or LLC for new business?

Dear Wendy,

We highly recommend that you consider going the LLC route. An LLC will offer you liability protection for your personal assets that a DBA will not. In short, registering a DBA would only give you a registration for a name under which you transact business as an individual (sole proprietor), it will not start a separate company.

On the other hand, starting an LLC forms a company that is as entity separate from you as a private person. This separation is crucial as it ensures that in your business you risk only that which your business owns and not the possessions that you own as a person, such as your home, for example. An LLC is relatively easy to maintain and requires no more than opening a separate bank account, filing a short annual report (just a simple form usually) every year, and, of course filing of a tax return. But even these additional steps are well worth the benefits of doing business as a limited liability company.