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Loren
Loren, Attorney
Category: Business Law
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Experience:  30 years experience representing clients .
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I currently run a small business as a DBA. I file a schedule

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I currently run a small business as a DBA. I file a schedule C and use my social security number.

I recently started an LLC. My idea in starting the LLC was to bring my DBA and my new business idea under the same umbrella.

So, there would be the LLC, and two businesses under the umbrella - I will be bringing my DBA to the LLC as well as a new business I am starting. I want to put them both under the LLC because they can function independently of one another, but they also work together as well (one can promote the other).

Question. How do I transfer my DBA to the LLC? Is there a form? And, can I have both businesses as DBA's under the LLC...?
Thank you for using JustAnswer. I am LawGuy and I will do whatever I can to answer your question.

A dba is just a sole proprietorship. Once they are operating as LLCs they are no longer dba's. All you need do is assign your interest to the LLC. There is no special form. However, to avoid confusion and avoid cross liability you should have each business in its own LLC.

Also, be aware the IRS does not recognize single member LLCs as separate tax entities and you would still be filing under your own ss#. You would, though, be protected from personal liability for LLC obligations.

I hope this answers your question.

LawGuy
Loren and 3 other Business Law Specialists are ready to help you
Customer: replied 4 years ago.

It answers my question. Thank you. I have some logical followups, though.


 


Is there a form for assigning my interest in the dba to the llc, or can you point me towards some language? I just want to make sure this is done right, because it would no longer be on my personal tax return.


 


If I have each business in its own LLC, that would be more expensive, I'm assuming. Multiple filings, etc.


 


Let's just say I wanted to keep things the way I initially wanted them. I could have the LLC dba as 2 separate things, right? And then when I file my returns, I would list them on separate schedules.


 


 


 

The language is as simple as I hereby assign all right title and interest in ABC Business to ABC LLC. You will want to change any leases and other contracts to the LLC, as well, and that will require the cooperation of the other people you may have contracts with.

You can not have two separate businesses running from the same LLC since the LLCs are recognized as separate entities and it could compromise your shield from personal liability if the LLC is acting merely as your personal alter ego.

LawGuy
Customer: replied 4 years ago.

I think I understand. So, what you're saying is I couldn't have XYZ LLC dba Widgets and dba Gadgets (and thus the incomes from both would determine the overall income of the LLC)...right?


 


I'd have to have WIDGETS LLC and GADGETS LLC and ditch XYZ LLC, right?


 


Thank you!

Yes, that is correct. However, you could do it the way you propose with alias names registered to XYZ. I just do not think it is a good way to set it up and it could cause problems in the future.

LawGuy
Loren and 3 other Business Law Specialists are ready to help you
Hi
I'm just following up with you to see how everything is going.
Did my answer help?

LawGuy
Customer: replied 4 years ago.

Somewhat, yes. Rated you already. Thx.