If I incorporate my own business do I have to get a d.b.a?

Question

Let's say I start my own business: TrillionDollarCompany inc.

Let's say people make checks out to TrillionDollarCompany inc.

Do I have to get a D.B.A for TrillionDollarCompany? How does that work?

Answer 1

If you want to start a business and have "Inc." in the name, you have to incorporate your business with the state.  You will also have to get an EIN (Employer Identification Number) with the IRS.  If you don't plan to use "Inc.", you might have to register the name with the county you live in.  If you want to have people make checks out to your business name, you will need the EIN to open a business bank account.

Answer 2

To create a corporation or LLC or LLP, you file the proper papers with your STATE government. It's different for every state.

There are both tax and legal differences between C Corporations, S Corporations, LLC's, and LLP's.

It is possible to be a LLC (limited Liability Corporation) for legal purposes, but file taxes using your personal schedule C on form 1040. This does not need to be complicated, but it can be depending on your situation. People who don't understand the issues get confused quickly and can make mistakes.

A DBA (Doing Business As) is simply a shorthand way of saying you are self employed but you have chosen a formal name for your business. There is no legal filing requirement and no paperwork to fill out, unless you want to register and protect the name. In my opinion, it's not worth it. Just don't do something dumb like choose to call your restaurant McDonald's. Pick a unique name.

A DBA must have an employer ID number separate from your social security number if you want to hire employees. Otherwise, you do not. The IRS issues tax ID numbers.

If you open a bank account in the name of your DBA, the bank may or may not allow you to just cash the checks. As a DBA, YOU are the company.

For a formal corporation or LLC, a bank cannot cash checks made out to the business. You have to deposit them and then make a withdrawal. You usually need to provide the bank with a copy of the company bylaws or resolution if you want to open up a corporate or partnership account.