DBA vs. LLC: What is the Difference?

As a new business owner, deciding how to structure your business is one of the most important early decisions you will make. Among the most common options are filing for an assumed business name, often referred to as a DBA, or forming a limited liability company (LLC). 

Understanding the differences—including legal protections, costs, and tax implications—between an assumed business name and LLC will help you effectively establish a business presence.

What Is a DBA?

A DBA, short for “doing business as,” allows you to operate your business under a name other than your own legal name or the legal name of your existing entity. This assumed business name or trade name is the registration you file with your city, county, or state. It must be filed before you can do business under a name that differs from your own.

For example, if John Smith operates as a sole proprietor but wants to market his services under the name “BrightPath Marketing,” he can file a DBA with the state or county. This step does not create a new business entity—it just registers the business name for public use. 

What Is an LLC?

An LLC is a legal entity created under state law. Forming an LLC, such as “BrightPath Marketing, LLC,” creates a structure that separates your personal assets from your business liabilities. 

This distinction is important: While a DBA is essentially a name registration, an LLC is a formal business organization recognized by the state.

Key Differences Between DBAs and LLCs

While both options can help you establish a professional identity for your business, the similarities of assumed business names vs. LLCs end there. Below are the most important distinctions business owners should understand.

Liability Protection

DBA: Offers no personal liability protection. If your business incurs debts or legal judgments, your personal assets, such as your home or savings, are at risk.

LLC: Provides a liability shield, meaning members (owners) are typically not personally responsible for business debts or lawsuits.

Tax Treatment

DBA: Taxes pass directly to the owner’s personal return; the business itself is not taxed separately. 

LLC: Usually taxed the same way by default, but an LLC can choose to be taxed as an S corporation or C corporation if advantageous. 

Name Exclusivity

DBA: Registration may prevent others in your county or state from using the same DBA name but offers no broader trademark protection.

LLC: State authorities typically will not allow two LLCs to have the same name, offering stronger protection for your brand identity.

State Filing Requirements and Fees

DBA: Filing is often simple and inexpensive, usually completed at the county or state level with minimal renewal requirements.

LLC: Involves higher filing fees, possible annual reporting requirements, and additional compliance responsibilities.

Quick Guide: DBA vs. LLC Differences

When to Use a DBA/Assumed Business Name vs. LLC

The right choice depends on your business’s goals, risk tolerance, and growth plans.

A DBA might be right if:

You are testing a business idea and want to minimize costs.

You operate as a sole proprietor or partnership and want to use a business name rather than your personal name.

You already own a legal entity but want to market products under brand names.

An LLC might be right if:

You want to protect your personal assets from business liabilities.

You plan to hire employees, seek outside investors, or sign significant contracts.

You want to establish credibility with customers, vendors, and lenders.

For a visual approach, imagine a simple decision tree:

Do you need liability protection? → Yes → Choose an LLC.

Do you prefer low-cost simplicity with minimal paperwork? → Yes → A DBA may be sufficient.

Special Considerations for Business Addresses

Whether you choose a DBA or an LLC, you may need to provide a business address when filing. Many states require a physical address or registered agent for LLC registration. Some DBA filings also request a valid business address rather than a home address. 

Davinci’s Virtual Office solutions can provide a professional business address for your company, ensuring you meet these requirements while keeping your personal address private. Some states do have restrictions on using virtual addresses, so it is always wise to verify state-specific regulations before filing.

Making the Right Choice for Your Business

Ultimately, the decision between an assumed business name vs. LLC depends on the stage of your business and your long-term goals. If you need simplicity and low start-up costs, a DBA might be all you need initially. But if you want liability protection, tax flexibility, and a more formal structure for growth, an LLC is likely the better choice.

Ready to formalize your business? Let Davinci provide your virtual address or registered agent services to help you streamline the process. Contact us today.

About Coco Quillen

Coco is the Chief Operating Officer at Davinci Virtual Office Solutions. She manages the strategic development and operational implementation of services for Davinci. She works closely with all teams to ensure customers are well taken care of.