Benefits of DBA
Doing Business As is basically the utilization of a fictional business name for trading under in business. This enables an individual to carry out their businesses under different names without having to create new business entities. Using DBA, you are going to be able to represent yourself, advertise and accept payments under a fictional name. The best thing about using DBA is that it is very simple to use and it is an inexpensive process. It is essential that you comprehend that the name that you can use varies from one state to the next. As a result, it is highly recommended that you consult the local business authorities before proceeding. The following are some of the major benefits of DBA.
1. Cost effective
One of the key benefits of DBA is that it is a very effective method of cost saving. This is especially important for individuals who are looking to open a series of businesses. Once you have created a corporation using one general name, you can use the DBA for the rest of the businesses in the series. This will assist you control the costs while you continue with your business expansion.
2. Separate transactions
Usually in partnership and sole proprietorship, the name of the owner is used for all business purposes. For that reason, all bank accounts and transactions operate under the name of the owner making it hard for such a person to differentiate the private bank account and transactions from that of the business.
A DBA can assist you solve all these problems. In such a situation, the proprietor can create a distinct business account with a unique business name meaning that transactions can be made under the unique name rather than the personal name.
However, DBA has several disadvantages also and one of them is that you do not have any liability protection as the sole proprietor. This means that you are going to be personally responsible for all debts of your firm. Furthermore, you are not going to have name protection since anyone can use DBA.