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When considering how to operate your business, the choice between a DBA and an LLC is crucial. A DBA, or “Doing Business As,” allows you to operate under a different name without forming a separate legal entity. On the other hand, an LLC, or Limited Liability Company, provides legal protection and separates your personal assets from business liabilities.

DBAs are simpler to set up and maintain, making them a popular choice for sole proprietors and freelancers. They allow flexibility in branding and marketing while requiring minimal paperwork.

However, an LLC offers more comprehensive legal protection. It shields your personal assets from business debts and liabilities, reducing your risk exposure. Additionally, LLCs provide a structured framework for governance and ownership, making them suitable for businesses with multiple owners or investors.

When it comes to taxes, DBAs and LLCs have distinct implications. DBAs are typically taxed as part of the owner’s personal income, while LLCs have the option to choose how they are taxed, such as as a sole proprietorship, partnership, S corporation, or C corporation.

In terms of credibility and perception, LLCs often project a more professional image to clients, partners, and investors. They demonstrate a commitment to legal compliance and financial responsibility.

Ultimately, the decision between a DBA and an LLC depends on your business goals, risk tolerance, and long-term vision. Consulting with a knowledgeable CPA like KT Bradley can provide valuable insights and guidance tailored to your specific needs.