Doing business as-DBA
A DBA is a fictitious name that allows you to do a business under a different name.
The following are main reasons why a DBA may be required for your business.
To use a business name instead of a personal name: If you are a sole proprietor, you may not want to use your personal name but instead, prefer to use your business name. E.g.: John Doe started a software consulting business. He can be JD Consulting. As JD consulting, he can transact business and ensure his personal name is not used or business purposes.
Bank requirement: At times, your bank requires you to open a DBA.
Your LLC is operating a new business or a website: DBA is not necessarily used as an alias for your personal name. In fact, there is no need to create multiple LLCs if you are operating multiple businesses. You can create multiple DBAs for the business. This will save a lot of compliance costs and other administrative expenses.
Eg: John Doe LLC is a software consulting business. John Doe LLC is also opening a restaurant. It can create a DBA under the name of John Doe Restaurants.
How to file DBA
It varies by state. Most states, you can file a DBA with minimal costs as low as $50 and are processed within a week or earlier.
If you are a sole proprietor with a DBA, you will file Schedule C and follow all tax procedures as a sole proprietor
If you have created a DBA for your LLC, then all taxes are reported under the LLC name.