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DBA or LLC for new business?

Asked by: Wendy - 24 February, 2011
I am starting a new business, I will be the only owner. Should I start out as DBA or LLC? What would be the best way to go?
Answered by: Alec Green - 24 February, 2011

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.

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