Most entrepreneurs start with a name before they start a business — but the law doesn’t see it that way.
Many new founders confuse a DBA (Doing Business As) with an actual business entity like an LLC. That small misunderstanding can lead to costly legal and tax mistakes, especially when it’s time to open a bank account, file taxes, or protect personal assets.
This guide cuts through that confusion. You’ll learn the real difference between a DBA and an LLC — how each works, what protection they offer, and when to use one (or both).
A DBA (Doing Business As) — sometimes called a fictitious business name or assumed name — is not a separate business entity.
It’s simply a registered trade name that lets you operate under a name different from your personal or company’s legal name.
Think of it as a nickname for your business. You can market your brand, print it on invoices, and even open a bank account under that name (depending on your bank’s policy). But legally, you’re still the same person or company behind it.
For example, if Jane Smith runs a freelance consulting business, she can register a DBA called “Sunset Consulting”. To the public, that’s her business name — but legally, she’s still Jane Smith operating as Sunset Consulting.
A DBA is filed at the state or county level, not with the IRS. It doesn’t create liability protection, separate taxes, or a distinct legal identity. In other words, if someone sues your business, they’re suing you personally.
That makes a DBA best suited for low-risk freelancers or small ventures testing an idea or building brand identity without forming a full legal entity yet.
A Limited Liability Company (LLC) is a legal business entity that formally separates your personal assets from your business assets.
It’s the simplest way to protect yourself from personal liability — meaning your home, car, and savings aren’t at risk if your business gets sued or goes into debt.
An LLC combines the liability protection of a corporation with the tax flexibility of a sole proprietorship or partnership. You can choose to be taxed as a disregarded entity (pass-through) or as a corporation (C-Corp or S-Corp), depending on what benefits your situation most.
(Note: Non-US residents cannot choose to be taxed as S-Corp)
To create an LLC, you must file Articles of Organization with a state government and appoint a Registered Agent to receive official mail and compliance documents. The LLC becomes a recognized legal entity once approved.
LLCs can have one or multiple members (owners), and each owner’s liability is limited to their investment in the company.
For example, “Sunset Consulting LLC” is a fully recognized legal entity with its own EIN, business bank account, and contracts under that name. If something goes wrong, Jane Smith (the owner) is protected from personal liability — the company, not her personally, bears the risk.
Think of a DBA as your business’s nickname — something you use publicly but that doesn’t change who you are legally. An LLC, on the other hand, is a legal identity of its own — one that can own property, sign contracts, and shield you from personal liability.
Here’s how they stack up side by side:
A DBA works best when your business goals are simple — you’re trying a new product line, testing a market, or adding a second brand to your existing LLC. It’s quick, inexpensive, and helps you operate under a polished name without forming a new company.
Here’s when it fits perfectly:
Example: A photographer named Alex Smith can register a DBA as “LightFrame Studios.” This lets her showcase a creative brand while still operating as Alex Smith for tax purposes.
But here’s the catch:
Without an LLC, you’re still personally liable. If your business is sued or owes money, your personal assets (bank account, car, savings) are on the line. That’s why a DBA should only be used when the financial or legal risk is minimal.
Unlike a DBA, an LLC makes your business a separate legal entity. It draws a clear line between you and your business. That separation protects your personal assets and makes it easier to scale, raise funds, and work with global platforms.
Here’s when it’s the right move:
Example: A marketing agency called “BlueOrbit LLC” can file DBAs for “OrbitDesigns” and “OrbitMedia.” This gives them separate brand identities while keeping all finances and taxes under one legal company.
For non-U.S. founders, an LLC is even more critical — it’s the foundation you need to open a U.S. bank account, get an EIN, and access payment systems like Stripe or PayPal.
If you’re a non-U.S. founder, you can’t operate with just a DBA — you need an LLC to legally access U.S. banking, Stripe, and payment systems.
Here’s why: A DBA is only a name registration, and it’s designed for people or companies that already have a legal presence in the U.S. Most states require a U.S. address, and many local jurisdictions link DBA filings to a U.S. citizen’s SSN or tax ID. In other words, if you live abroad and don’t have an existing U.S. company, you can’t file a DBA on its own.
That’s where an LLC comes in.
A U.S. LLC can be 100% foreign-owned and formed remotely, without the need for a Social Security Number. Once your LLC is registered, you can open a U.S. business bank account, get an EIN from the IRS, and operate globally with full legitimacy.
After your LLC is set up, you can file one or more DBAs under it to run multiple brands or product lines. This structure is especially popular among online founders, agencies, and e-commerce sellers who want brand flexibility under one legal entity.
In short — a DBA lets you name your business; an LLC lets you own it.
Yes — many successful companies use both an LLC and one or more DBAs to run multiple brands under a single legal structure.
Here’s how it works:
You start by forming an LLC, which becomes your main legal entity. Then, whenever you want to launch a new product, service, or brand line, you can file a DBA under that LLC. Each DBA acts as a different “face” of your business while all income, taxes, and liabilities flow through the same LLC.
Example: Let’s say you create BrightPath LLC. Later, you decide to expand into different niches:
Both brands operate independently in the market — each with its own logo, website, and audience — but legally, they’re all part of the same BrightPath LLC.
Benefits:
This hybrid setup gives you the best of both worlds — the liability protection of an LLC and the brand flexibility of DBAs.
A DBA gives you a name, but an LLC gives you a business.
If you’re testing an idea or running a low-risk side project, a DBA can do the job. But when you’re ready to protect your assets, build credibility, and operate seriously, an LLC is the smarter foundation.
Start simple — and structure your business so it can grow without exposing you personally.
Kathleen Schweitzer is an international taxation expert, providing strategic counsel to businesses with complex compliance, tax and financial issues in an effort to help them grow their business globally. She often gives lecture on U.S. tax developments, transfer pricing, taxes on the sale of goods and services, U.S. tax policy development, taxation of internet commerce and multi-jurisdictional global tax planning. Kathleen enjoys reading, photography, cooking and spending time with her husband and eleven-year-old daughter.
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