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Lev
Lev, Tax Preparer
Category: Finance
Satisfied Customers: 29919
Experience:  Personal Investment, Tax Preparation
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Background: - S corp - 2 founders/owners (married couple) -

Customer Question

background:
- S corp
- 2 founders/owners (married couple)
- CA based
- almost 2 year old company
- ecommerce
- i have liability insurance
- revenue ~100k+ year (scaling a lot this year, so expected revenue 175-200K)
- sell used/vintage products online under 2 different DBAs so far
2 DBAS both sell used products - 1 is glasses, 1 is rugsmy goal is:
- ease
- scalabilitywhat i mean by ease:
- i want to see my numbers by ease, have 1 bank account with everything coming in and coming out, file one return, etc. (that doesn’t mean it’s the best idea but this is my goal)what i mean by scalability:
- i want to be able to just open another kind of “shop” whenever i want to sell different products at anytime without much paperwork, bank account creation, more setup, etc. - for instance, if want to sell used/vintage painting tomorrow under the “company name/dba” called “Paintings R US” i want to have that executed and launched pretty quickly and preferably under the same 1 company (again doesn’t mean that’s the smartest)i want to add more product lines that will be under different DBAs under one company.but the entire company will essentially be the same. we will just be a used/vintage product ecommerce reseller.Question:**** Is 1 company with different DBAs the best way to go or should i do multiple corps? ***I’ve read multiple corps give asset protection which is a factor for me - but - a bigger factor at least for now and maybe 1 or 2 more years is simplicity.IF i had multiple corps this would mean multiple bank accounts, ecommerce marketplace accounts (like multiple amazon accounts, etc), multiple sales tax filings, etc.IF i have 1 S-corp with multiple DBAs - I currently have a time determing what sales belong to which DBA - I solved this with 2 QB accounts (which goes against simplicity) but I still don’t like this setup.Is my set up the problem with the DBA, is the DBA just wrong, etc.I just need to know which of the two DBA vs multiple S-corps is the best idea. And how they affect business processing, my personal salary payout, taxes, etc.
JA: The Accountant will know how to help. Is there anything else the Accountant should be aware of?
Customer: no
Submitted: 2 months ago.
Category: Finance
Expert:  Lev replied 2 months ago.

Is 1 company with different DBAs the best way to go or should i do multiple corps? ***
We need to remember that DBA doesn't create a different legal entity...

You may view it as a department of the same S-corporation.

If may be convenient for management or marketing purposes but would not make any difference for tax reporting
I’ve read multiple corps give asset protection which is a factor for me - but - a bigger factor at least for now and maybe 1 or 2 more years is simplicity.
Multiple S-corporations will add overhead - that is for sure - because each will need separate tax return and payroll. It will not affect your personal liability protection - but will will add protection between types of operation.

So if that is a factor - then yes - that might have some additional value.
IF i had multiple corps this would mean multiple bank accounts, ecommerce marketplace accounts (like multiple amazon accounts, etc), multiple sales tax filings, etc.
Yes - correct - different corporations should NOT mix their finances.

If finances and assets are commingled - that might result in loosing protection

Expert:  Lev replied 2 months ago.

IF i have 1 S-corp with multiple DBAs - I currently have a time determining what sales belong to which DBA - I solved this with 2 QB accounts (which goes against simplicity) but I still don’t like this setup.
That is accounting issue... Unfortunately there is no way around - you either have separate bank account OR one bank account and different sub-accounts in your books.
Is my set up the problem with the DBA, is the DBA just wrong, etc.

There is nothing wrong... That is a matter of convenience...

DBA stands for “Doing Business As” - that is a fictitious name (or assumed name, trade name or DBA name) that is different from the officially registered name of your corporation.

Generally - you would need DBA for external purposes, but for your accounting purposes or tax purposes having DBA's makes no difference.

.

Please elaborate if needed.