Category: LLC

Understanding DBA and LLC: Which Is Better For Your Small Business

Starting a business is a huge step, and one of the worst things you can do is choose the wrong business type for your needs. Generally, choosing between DBA and LLC means either opting for a less costly option that still offers you a good business standing or a more expensive one that gives you protection and superior benefits. Platinum Paralegals team advises you to speak with your lawyer or contact us for advice on choosing between DBA and LLC before making your final decision. It is a complicated matter, and you want to be sure you are doing the right thing.

To help you understand this better, we are shedding some light on DB and LLC:

Benefits of an LLC

The benefits an LLC offers are multifold:

  • An LLC is provided personal liability protection
  • An LLC is a separate legal entity
  • An LLC is often preferred when employees will be hired, or liability is a possibility
  • The name of an LLC is the legal name and used when conducting business
  • An LLC provides much higher protection
  • An LLC makes expansion and selling a business much more comfortable as it does seeking funding

We advise you to find a company that offers both an LLC template and LLC Operating Agreement to start your business.

Benefits of DBA

Unlike LLC, DBA doesn’t provide similar benefits. A DBA will:

  • Leave liability with the person that registered the DBA
  • Not be a separate legal entity
  • Not see bylaws, agreements, and other formalities that a corporation may face

DBA is a pretty good option for businesses that are operating under an assumed name. If you are, say, offering freelance services while being a website owner, a DBA allows you to do business under your domain name legally.

Significant Distinctions between DBA vs. LLC

The primary difference between doing business as a DBA vs. LLC is financial. DBA is much more favorable if you want to save some money as it has only two fees: a) a registration fee, b) a renewal fee. Depending on the state, these two fees are generally charged every five years. An LLC, however, requires the payment of state taxes in most cases. It is why LLC is much more costly. Usually, these taxes are a flat fee.

Business owners who don’t want to incorporate usually choose a DBA. That way they can brand and promote themselves without having to deal with the requirements of an LLC.

The best way to choose between a DBA and an LLC is to take all your business’s aspect into consideration and act accordingly. What’s good for one company isn’t for the other, so make sure you consult with the right set of experts on the best options. Our team at Platinum Paralegals will be happy to hear you out, and guide you to find the best choice for your specific business and its operations.

Llc vs Corporation

If your a business owner wanting to incorporate your business, you may find yourself wondering which business type to choose. The new company structure can fall into two categories, a limited liability company (LLC), or a corporation. Having a clear understanding of each structure will allow you to feel confident in which one you choose for your business. No matter which structure you choose, they both have their advantages and disadvantages. The article below will be discussing the advantages and disadvantages of each business structure so you can decide which will be right for your business.

Pros of LLCs

Choosing an LLC to structure your business comes with many advantages.  Members are not personally liable for some or all the actions of the company and their personal assets are protected. An LLC has a pass-through entity, meaning the business profits are not taxed by the government on a company level. Instead, members’ federal income tax returns get taxed. Filing taxes is easier this way than if the business was taxed on a corporate level. An LLC can be formed with as little as one person or many members with the choice to managed by all its members. This is helpful is some of the members are not experienced in managing a business and want to hire people that are experienced. The cost of paperwork and fees to start up an LLC is are relatively low, although, each state varies in what they charge in fees and taxes.

An LLC can be formed with as little as one person or many members with the choice to managed by all its members.

Pros of Corporations

Corporations are considered an independent legal entity owned by individuals or entities who are shareholders. Like an LLC, a Corporation offers shareholders limited liability protection from the businesses actions and debts. Shareholders personal assets are protected and they are only liable for their stock investment in the business. The corporation can raise money for the business by selling stocks to investors willing to invest capital in the business. The corporate business has a management structure which includes directors, officers, and shareholders who establish power. Each group has its own set of roles and responsibilities. As long as corporate regulations are met, a business can exist indefinitely.

Cons of LLCs

There are some disadvantages to running an LLC. The liability has its limits, meaning a judge can rule that your personal assets are not protected by your LLC structure. You are at risk if you don’t clearly separate business transactions from personal or if you have been running the business fraudulently causing losses for others. Another disadvantage is the publication requirements or renewal fees for an LLC can be costly, depending on your state. Many states have franchise or capital values tax on LLCs and they can range from a flat fee to an amount based on the company’s revenue. It might be hard to raise financial capital in an LLC  as investors are more likely to put their money into a corporation. As an LLC member, you may be faced with self-employment tax. The IRS considers LLCs the same as partnerships for tax purposes and considers members to be self-employed unless members opt to be taxed as a corporation.

The liability has its limits, meaning a judge can rule that your personal assets are not protected by your LLC structure. You are at risk if you don’t clearly separate business transactions from personal or if you have been running the business fraudulently causing losses for others.

Cons of Corporations

Establishing a corporation can be expensive and time-consuming. Another major disadvantage is the double-taxation. In some instances, the company pays taxes on profits and individual stockholders are also taxed who earned profits from the corporation in the form of dividends. This happens most often in large corporations and may not serve as an issue for stockholders and owners of a small corporation who are paid salaries rather than dividends. The law requires corporations to observe a number of corporate formalities to guarantee its operating as a separate entity that’s independent of its businesses owners. Regular director meetings, keeping records of corporate activity, and maintaining the financial independence of the corporation are all steps in observing corporate formalities.

For low cost, affordable paralegal assistance, call Platinum Paralegals™ at: (818) 839-6879 or send an email to: info@platinumparalegals.com.

 

 

Advantages of Dba Vs Llc

When beginning a business, it is important to figure out what entity type is right for your business. Forming an LLC, creates a separate legal entity and carries on a business from that point on, rather than you as an individual. Registering a DBA, however, you will be carrying on a business under a fictitious name. In this article, I will go into further depth about each business entity type and their advantages.

What Is DBA?

DBA is simply the abbreviation for “doing business as.” DBA can also be known as “fictitious names,” “trade name,” or “assumed names.” When a business operates under another name other than its legal one, DBA registration is needed. Many business owners choose another name other than there given personal name to establish recognition and to identify goods sold or services provided.

Unless you run a LLC or corporation, you will not be able to receive money or hold a business bank account under a business name until you have a DBA statement. The purpose of the DBA statement is to inform the public of the owner’s personal name or the name under which they are operating a business.

Many business owners choose another name other than there given personal name to establish recognition and to identify goods sold or services provided

What Is LLC?

LLC is the abbreviation for “limited liability company.” LLC is a separate and distinct legal entity with the ability to get a tax identification number, open a bank account and do business, all under its own name. LLCs can be operated by more than one person who are known as LLC “members.” Forming an LLC can protect a business and its assets.

What Are the Advantages of DBA?

DBA is a simple process with low costs compared to corporations or LLC. There is no requirement for record keeping or other formalities. A DBA allows a business owner to own multiple businesses without having to create separate legal entities for each business. A brand or service set up as a DBA, creates advertising potential whenever the names is mentioned. Home-based business benefit greatly using a DBA. A business owner may want to convert over to a corporation or LLC when their business is running profitably.

A brand or service set up as a DBA, creates advertising potential whenever the names is mentioned. Home-based business benefit greatly using a DBA.

What Are the Advantages of LLC?

One great benefit of LLC, is the special tax benefit. In a DBA, any money a business owner makes passes through to their individual tax return and is taxed accordingly. With an LLC, members can avoid this double taxation and be taxed only once for each LLC member’s individual income tax return.

Since an LLC is viewed as a separate legal entity from its owners or members, an LLC owner is not held accountable for LLC’s debts or legal abilities. The LCC’s owner and their personal assets such as a home, or a bank account are usually not at risk under LCC’s legal obligations. Making this formal commitment to a business opens the door to establishing more credibility with customers, vendors, employees, and partners.

What Is the Best Choice?

The best choice is dependant on your business needs. The rules for DBA and LLC are different where some rules may benefit some businesses more than others. LLC owners have protection and a special tax break where business owners who use an assumed name have more liability and get double taxed. In the same note, a business that is home-based may benefit more from a DBA because it offers more advertising potential and is less costly to maintain.

If you find yourself in need of a DBA or a LLC, Platinum Paralegals can help. Get excellent legal advice for a fraction of the cost of an attorney’s fee. Platinum Paralegals will call you back faster than an attorney who spends most their time in a courtroom. If you are seeking general advice about business entity types, get in touch with us via phone or web form today!

What is an LLC

What is an LLC?

There are many important tasks involved in owning and operating a small business. The day to day duties involved in operating your business may be confusing and overwhelming at times, but some decisions can be very important to the long-term success of your business venture.

As a small business owner, you may have asked yourself, “How important is an LLC?” If you have already decided on this task, you may have wondered how to get an LLC. The following paragraphs are designed to provide small business owners such as yourself with the proper definition of LLC, as well as answer the question, “How important is an LLC?”

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If you are a small business owner who has decided to take this step, we will also provide you with useful information on how to get an LLC initiated for your business.

LLC Definition

LLC stands for limited liability company . An LLC is a business structure in which the individual members of a company cannot be held liable on a personal level for any of the company’s debts. An LLC can be described as a unique business structure that combines certain traits of a corporation with specific traits of a sole proprietorship.

An LLC is a business structure in which the individual members of a company cannot be held liable on a personal level for any of the company’s debts.

An LLC is the least complex of all the types of business structures and provides the most flexibility in terms of perks and benefits.

How Will an LLC Help Your Business?

Now that we know the definition of an LLC, why is an LLC important to your business? Well, having an LLC in place can provide many benefits. The following is a brief list of a few of the perks associated with an LLC .

  •  You do not need to file a corporate tax return. You avoid issues with double taxation since all owners file their own individual tax returns annually.
  •  Owners do not need to be US citizens or permanent residents to qualify for an LLC.
  •  Owners have limited liability protection from business debts and similar financial obligations related to the operations of the business.
  •  An LLC gives your business enhanced credibility in terms of partnerships and relationships with lenders or suppliers.

Should You Get an LLC?

Why is an LLC important to the overall functioning of your business? Aside from the benefits listed above, an LLC provides your business with enhanced protection from losses and liability while still offering the most flexibility. An LLC is much less confusing and overwhelming than the structure of a corporation but comes with many unique benefits that most business owners appreciate.

How To Get an LLC

There are several steps involved in setting up your LLC for your business. This process normally involves the preparation of several legal documents that are later filed with the Secretary of State on your behalf. If you are in need of legal assistance with setting up an LLC for your business, please contact our offices today.

What is an LLC

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Making important decisions about the daily operations of your business is an important task you are all too familiar with. While some decisions can be taxing and overwhelming, deciding on a proper structure for your business shouldn’t be one of them. The professional and friendly legal team at Platinum Paralegals is here to assist you with setting up your LLC and establishing a proper business structure to ensure your continued success.