Do you want to file a DBA and you want know the maximum limit? If YES, here are factors that determine how many DBAs an LLC or Corporation can have in USA.
What is a DBA?
A “doing business name” or “DBA” is an assumed name that a company uses, which varies from its legal name. Governed by state laws, some states will not allow two businesses to use the same DBA. This is why LLCs need to submit a DBA application. Although most businesses register a single DBA, there are instances where multiple DBAs may be the most beneficial option.
Benefits of Having a DBA
There are several reasons why a company may have a DBA different from their legal name. If a large company chooses to start offering a new type of service that is completely different from their widely known practices or products, they may want to create a whole new identity for that new line of business.
Note that choosing multiple DBA names can help avoid customer confusion while introducing a new product or line of business, regardless of any preconceptions people have based on your other existing lines of business. Also, businesses may decide to re-brand while continuing to offer the same services they did in the past.
In this case, they may change the DBA of their company, but keep their legal name (i.e., the operational and administrative side of the business) the same. This will prevent the hassle of having to close the books on the old business and completely start over from scratch by forming a new S Corporation or LLC.
How Many DBAs Can an LLC or Corporation Have?
A precise answer to the above question will depend on various factors, including state laws and basic tax filling, and company bookkeeping. The number of DBAs an LLC or Corporation can have in the United States is limitless, although they come with some requirements and more perceived expenses and obligations.
Indeed you are allowed to register as many DBAs as you want, there are associated filing costs. Howbeit, filing multiple names may be unnecessary based on your company’s needs. In addition, when a business has two open DBAs, this can make bookkeeping more challenging.
Since each DBA is not a separate business, the IRS will view both DBAs as a single entity. It is not possible to separate revenues during tax time. This can make it difficult to claim losses for one DBA when the other DBA is making money. Aside from tax time becoming more complex, multiple DBAs can also increase liability concerns.
How to File for a DBA
Once the members of an LLC or Corporation agree on a name and conduct a name search, registration is the next step. Note that the main purpose of registration is to inform the local government and public as to what entity owns the company associated with that name. This also helps to ensure that all operations of that business name can be traced back to the rightful owners. Note that if you use a DBA without registering it, this could lead to penalties at both the local and state-level.
Nonetheless, in the United States, registering a DBA name with the state is typically straightforward. To complete this process, you will need to complete a form and pay the filing fee. Although there is technically no DBA name limit, each name generally needs to be filed separately.
The rules, requirements, forms and fees associated with filing a DBA are different in each state and county. In some states, sole proprietors and general partnerships file in one office while corporations, LLCs and other statutory entities file in another. The DBA forms may differ as well. The time it takes to process a DBA also varies. It’s best to learn how your state or county operates.