How many DBAs can an LLC Have? Everything you Need to know

Napoleon

Aug 6, 2024 — 10 min read

In the early stages of creating a new business, you must decide on your company’s name and structure. As per state laws, Limited Liability Companies must operate under the legal names stated in their Articles of Association. But a name no longer reflects a brand’s values or objectives, especially when the company offers products that don’t align with their name.

Startup owners often wonder, can a single LLC have multiple businesses operating under it? Yes, it’s possible, but how you structure the company depends on the goals you have in mind.

While operating under a legal name, a small business might want to diversify the company to offer more products unrelated to the business name. So, what can a business owner do? Register a new LLC for each product?

The name (s) you use for the other businesses is Doing Business As (DBA). But how many DBA can an LLC have? Today, we will provide insight into how many DBAs an LLC can have, what it means before the law, and link the businesses under DBAs.

Understanding DBA and the Application Process

Every business operating in the United States must have a legal name. Depending on the business structure, it can be the owner(s) name or the business’s name on the formation papers. However, a company can also decide to operate under a name other than the legal name, Doing Business As (DBA).

A DBA is when an individual or business decides to do business under a different name besides the registered name. Depending on the state your business is operating in, a DBA might sometimes be known as an assumed name. Plus, if your business name is too formal, you can also decide to use a much easier name (DBA) for the market to target your customers. Operating your business under a DBA is much better than using your name. There are several ways to name your business:

The legal name is the name you used to incorporate your business
Name the business after yourself
Register a Doing Business As (DBA)

Registering for a DBA is a simple process that can be accomplished online in most states. You must provide the relevant business documents for your LLC or any other business structure as the business owner.

When applying for a DBA, the forms you fill out will contain general questions, and you must pay a filing fee. Understand that different states differ in business rules and regulations, so you must check with your state to know the filing requirements.

Why You Might Need a DBA

The primary purpose of registering a DBA is to notify the local government and public that your company will operate under that identity. It also helps in tracing all business operations related to its owners.

Using a DBA without registering is unlawful and can lead to penalties at the local and state level. But why does a company need a DBA? Companies have different reasons for having a DBA, and they are:

Offering a new service or product from what a company is known for and needs to create a new identity.
The need to avoid confusion among customers when introducing a new product or business, no matter what they think of your other companies.
Sometimes, a business can rebrand even when offering the same services or products, especially if the previous name didn’t resonate with customers.
A DBA allows you to carry your business without closing books on your old company and starting anew from scratch.

How Many DBA Can an LLC Have

Although there’s no limit to how many DBA an LLC can have, if you decide to have multiple of them, each DBA must be registered separately. If you’re thinking of registering multiple DBA names, consider these issues:

Consider how your new business name will impact your business’s success in the market.
Different markets can use multiple names to push tailored products or services.
Consider how much your current name affects your brand image, then determine if a DBA will improve it.

So, a company can operate under different names once as long as they’re registered. Can I register more than one DBA in the same state? For instance, operating under a food company name may be challenging if your business only sells food and you’re interested in launching an ice cream line.

So, how do you reach your target audience? Because the same company creates both businesses, the same people make decisions, and the same capital is infused, registering a DBA will help reach the right customers for every brand.

When registering for a DBA, ensure you follow the legal process in your state. If you have to register multiple DBA, ensure each is registered separately in the state your business is registered in.

Besides, you must also ensure the name is available, send the application, and pay the fee as your state requires. Depending on where your business is registered, it’s crucial to take appropriate steps to avoid legal issues, fines, or using a DBA that is against the company’s naming rules.

How to Set Up Multiple DBAs Under a Single LLC

An LLC can have several DBAs because these names are only trading names, not separate legal entities. DBAs are only used to run different businesses under a single LLC. In other words, the LLC operates under various names but remains the only legal entity. Here are the steps for setting up multiple DBAs in your state:

Search for a business name: You can use online name search tools to check if your business name is available. When choosing a name for your company, whether a DBA or legal name, there are rules in every state regarding naming a business. So, check out your state provisions for naming a company before registering.
Register the DBA: Once you determine your business name is available, you can register the DBA online or via mail. You’ll be required to provide the DBA name, the legal business name, the business address, and the business structure.
Publication requirement. Some states require you to publish a notice of using a DBA to inform the public. Check your county office where your business is registered to know which requirements apply.
Renewal. In some states, DBAs expire after five years, meaning you must renew them. Other states have no expiry date and you don’t have to worry about renewal. So, you must check what your state demands to ensure your DBA remains valid.
Business license. You may need to obtain additional licenses or permits depending on where your business is located and the activities you engage in. Your local county office or city government will furnish you with the requirements.

What to Do After Getting a DBA

Getting a DBA is a straightforward process, and you need to maintain it by doing the following:

Understand the rules. Ensure that all company documents (payroll, sales tax) are up to date for consistency.
Keep up-to-date records. Different states operate under varying rules and regulations. So, if your state demands you renew the DBA after some time, ensure you do so on time to continue using it.
File a DBA in all the states where you do business. Have a DBA in all states where your business exists, as one DBA doesn’t protect you.

Filing DBAs is the initial step towards safeguarding your business’s brand identity. Thus, it’s necessary to help you remain in control of your local market.

Who Needs DBA?

You must choose a business name and structure before incorporating your business into a legal entity. You can operate your business under a Limited Liability Company (LLC), Partnership, Corporation, or sole Proprietorship. Several years later, you expand your business reach to include new products or services.

You need a more engaging and customer-friendly business name to market your new products or services to operate under the same business structure. The new name you’ll be using to do business is DBA. It’s not a legal entity, but a trading name. A DBA protects your brand in your locality while allowing you to expand your business to attract more customers.

You must register a DBA before using it and avoid suffixes like Inc., LLC, or Corp unless the business is registered. Otherwise, you could violate state or local laws or be viewed as misleading, leading to penalties.

Here are different business structures and ways to file for DBA:

1. Sole Proprietorship

A sole proprietorship or general partnership is only filed for a single DBA. Hence, they only need one DBA application. The application for the single DBA is filed at the state, county clerk’s office or a relevant agency that handles the application.

2. LLC and Corporations

Any business operating under an LLC or Corporation can have numerous DBAs. The multiple DBAs can target different business markets with a separate DBA for each venture without forming various LLCs. For instance, if a clothing company sells clothes under DBA branches to footwear sales, it can register a DBA for the footwear under the same LLC.

Benefits of Numerous DBAs for LLC

Although filing numerous DBAs sounds like more paperwork for a business owner, it’s a good business structure to expand your business. Here are more benefits of having multiple DBAs for your LLC:

Effective marketing. Promoting various product lines under different DBAs is an effective marketing strategy. An LLC should choose a more straightforward and catchy DBA for promotional and marketing activities to attract more customers to the business.
Operating in multiple states. Instead of registering different LLCs to operate in different states, registering DBAs in other states will accomplish the mission. As a result, a business can capitalize on the local market in different states.
Simplifying a relaunch. Although rebranding can be a challenge, it can be done by setting up multiple DBA entities to give a business a new face. Running multiple DBAs your business gets a new name to carry out different activities under the same LLC.
Compliance with the law. For a business to operate under multiple DBAs, compliance requirements like registering the DBAs may exist.
Operating multiple businesses. Multiple DBAs allow companies to operate different businesses under the same LLC.
A Bank can ask a DBA to open a bank account for sole proprietorship and partnership.
Capture a different market under a new domain name instead of using one website for different products by filing different product subsets.

The Drawbacks of Using DBAs

Filing multiple DBAs is a great business strategy for any business’s success, and it comes with a handful of benefits. However, there are also several drawbacks you need to know about before registering a DBA or multiple DBAs:

Your business has no personal asset protection because your entity status remains the same. It means that creditors can still come for your personal and business assets if a business (sole proprietorship or partnership) is sued for debts. As for an LLC or corporation, your liability is limited, and creditors can come after your assets.
A DBA name isn’t exclusive to your business. Although you must search for an available name before filing your DBA, you can’t stop other businesses from using your assumed name. If you’re operating a business under an assumed or fictitious name and someone decides to incorporate a formal business under the same name, you must change your DBA name.
DBAs don’t protect businesses under the same LLC against each other’s liability. A lawsuit against a minor business cuts across the board for all businesses under the same LLC or corporation. However, you can shield the segments of your company by forming a series LLC or a corporation with subsidiaries.
DBA renewal after a while happens in some states while others don’t share this requirement. In some instances, DBA renewal is annual; in others, it’s five years. Before filing a DBA, contact the Secretary of State in your City to know all requirements.

Understanding a Series LLC?

A series LLC is a type of LLC whereby the mother company is divided into various segments. Every series has its members, assets, and liabilities, meaning they’re independent. In a series LLC, each series functions as a separate entity, offering limited liability protection for the assets and finances in the series.

Check the requirements of forming a series LLC in the state your business operates to ensure you’re compliant with all laws. In states where series LLCs are legal, you must provide the following during the application:

The LLC’s name
Jurisdiction of Formation
Principal office address and
A registered agent in your state and their details ( name and address)

Multiple DBAs Vs. Multiple LLCs

It’s more beneficial for a business to operate under multiple DBAs instead of creating separate LLCs or corporations. With multiple DBAs operating under the same legal business entity, only one Operating Agreement and one set of Articles of Organization are necessary.

By operating different DBAs under the same LLC, you cut costs on filing fees and other overhead expenses that come with forming a company.

Additionally, filing taxes is only done under the parent company and you don’t have to worry about separate filings for each DBA segment. To better understand LLCs and DBAs, you can talk to a tax attorney to help you make the right decision for your business.

Frequently Asked Questions

Can a DBA sign a contract?

It’s not a wise business decision to sign contracts or other legal documents using a DBA, but your registered LLC name. Using your LLC’s formal name sends a message to customers that they’re dealing with a legitimate limited liability company.

What is an assumed or fictitious name?

An assumed or fictitious name is also called Doing Business As (DBA). The names vary in different states but are used as trading identities under an LLC. Assumed or fictitious names are not legal entities but a marketing strategy business owners use to introduce new products or services in different states.

How many DBAs can LLCs have?

There’s no limit to how many DBAs an LLC can have as long as they’re filed in the relevant state according to their rules. DBAs allow an LLC to conduct business under a different name besides their legal identity.

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In Summary

How many DBA can an LLC have? Hopefully, you now have the answer to this confusing question.

A business name helps customers know who they’re dealing with and how the law recognizes your business. Using multiple DBAs for your business is an effective way to introduce new products in the market and a powerful marketing strategy.

DBAs simplify business operations in different states by helping you build, expand, and cut costs associated with incorporating a formal business. Although registering multiple DBAs might seem like an extra hassle, please don’t skip the filing step, as it can cause legal problems.

Some states will impose hefty penalties for using a DBA without filing it. Depending on where your business is located, DBAs must be renewed, while there’s no such requirement in others. So, you must ensure your business complies with the law in its registered state.

Creating different companies for different business lines is costly. Plus, the risks of managing multiple businesses can be daunting. Thus, using different names for each business under the same company is preferable.

Remember, multiple DBAs can operate under a legal business structure like an LLC or corporate. Single-member companies like sole proprietorships or general partnerships can only have one DBA for the business.

DBAs aren’t legal entities, meaning they don’t offer limited liability protection, nor do they provide exclusivity for the name. So, forming an LLC and DBAs to operate under it will keep your assets separate from business liabilities. Kindly contact one of our experts here if you have any question on DBA.