Disadvantages of a DBA

Disadvantages of a DBA

One of the main disadvantages of operating a sole proprietorship or partnership with a DBA, as opposed to forming an LLC or corporation is that you do not have liability protection as a sole proprietorship or partnership. You will be personally liable for the debts of your business. Additionally, you will not have exclusive rights to your business name. In many states and counties, anyone can register any DBA.

 
  • Definition of a DBA
    DBA is an abbreviation for "doing business as." Certain jurisdictions may also use the terms "fictitious business name," "trade name," or "assumed name." DBA registration is necessary if your business operates under a name other than its legal name.  
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  • Reasons to Get a DBA
    Name recognition is crucial to a company's success. Therefore, it is important to make the name you choose official. Name acknowledgement is achieved when the business name is used in all transactions, from marketing and sales to collecting money. Many business owners choose a name other than their...
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  • Uses for a DBA
    The most significant use of a DBA is the ability for a sole proprietorship to open a business bank account and collect money using a name other than its legal name. In many cases, more than one business can operate under the same DBA. There is no protection or exclusivity offered by operating...
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  • Requirements for a DBA
    In most states, you must file your DBA statement before using your DBA in the operation of your business. In some cases, it must be filed within 30-40 days of your first business transaction. In addition, several states require that you publish your DBA statement in a local newspaper, and then file...
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  • Restrictions on DBA Names
    A DBA for a sole proprietorship or general partnership may not contain any word or corporate ending implying it is anything other than a DBA. For example, if Joe Smith operates a sole proprietorship under "ABC Plumbing," he cannot file a DBA as "ABC Plumbing, Inc." Using a corporation or LLC ending...
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  • Advantages of a DBA
    When you are starting up, you definitely want to keep costs low and the process simple. Filing for a DBA helps you to do that. You do not have the ongoing record keeping requirements and other formalities of maintaining a corporation or LLC, or the costs associated with forming a corporation or LLC...
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