DBA, Incorporate Or LLC?
We get asked this question all the time. Naturally, this is a decision that needs to be considered on an individual basis, so please consult an appropriate party for final decision--but in terms of protecting assets and running your business here are some words of advice.
A DBA (Doing Business As) or FBN (Fictitious Business Name) is an identity that is registered with the respective county that can be started and running relatively quickly and at little cost. As it goes in business, you pay for what you get. The reality is, the DBA provides little to no protection in terms of personal assets.
The wonderful thing about the law is if you adhere to it as an upright citizen should it will protect you. The law has constructed the ability for a business to operate as an entity (corporation or LLC typically) that allows for the risk and liability to fall on the entity rather than on the individual. To make it quite simple, if an individual operates as a DBA and an upset customer decides to sue, then the DBA and the business owner are liable because the DBA and business owner are one in the same. There is no separation. There are some instances where you can use DBA with a separate entity that would provide beneficial protection...we will cover that later.
If you have a LLC or corporation and are legitimate in business dealings and an upset customer decides to sue, then the entity is the only liable party. It will literally protect your personal assets.
So in terms of protecting assets a corporation or LLC is usually the most appropriate way to start business.
There are several other factors as well...tax implications, record keeping etc. which we will cover at a later point and time, but for starters, I hope this helps....if you need more specifics or have specific questions, let me know and I'll post some real detailed bits of information.