I need some advice? I live in Texas and from what I have read I have to file for a LLC before I can file for DBA (in my county then my state). Is this right? If so I can't afford to file a LLC in Texas ($300 ) right now, can I file in another state that is cheaper for now even if I don't leave there?

Thank you for your help.

Although I am a native Texan, I've never formed an LLC there, so I'm foggy on the details. Although, I don't know why you'd have to form an LLC before filing for a DBA. A sole proprietor can have a DBA, and they wouldn't have filed for a legal business entity. Here's what I found on the TX SOS website...

- Sole proprietorship: The most common and the simplest form of business is the sole proprietorship. In a sole proprietorship, a single individual engages in a business activity without necessity of formal organization. If the business is conducted under an assumed name (a name other than the surname of the individual), then an assumed name certificate (commonly referred to as a DBA) should be filed with the office of the county clerk in the county where a business premise is maintained. If no business premise is maintained, then an assumed name certificate should be filed in all counties where business is conducted under the assumed name. (http://www.sos.state.tx.us/corp/businessstructure.shtml)

So see, you should be able to file for your DBA and hold off on an LLC until it is more financially feasible.

As far as the filing in another state thing...not so sure about that. It seems like you would have to file something where the business was physically located for it to be legal, but I'm not a lawyer or anything

And from what I can tell, in Alabama it only costs $80 to form an LLC. Would it be so drastically different from other places or am I maybe missing something? Does anyone know??? And if that's right, maybe everyone should move here!!

Hope I was a little helpful for you! I'm trying to pay it forward from all the help these lovely people have already given me!!

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Michelle
Virtually Effortless

Regarding the need of an LLC prior to DBA you'd want to check with your Secretary of State to be sure - Michelle posted some great information here and I only wanted to add that I was also told (and read in various places) that you supposedly can register an LLC in *any* state; so some will choose to register their company in a state where the filing fees are less expensive BUT when I registered my company I needed to list an 'agent' and the agent had to reside inside the state in which the company is registered. I listed myself as the agent, but I don't know how you would handle that if you registered in another state.

I also don't know what the tax ramifications would be if you registered in Alabama, but operated in New York or somewhere else. It just made more sense to me to register in my own state and pay the fees and be done with it rather than risk any doubt or question about the status of my business.

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One way to get around the registered agent thing would be to go through a document filing service such as legalzoom.com or mycorporation.com. They will serve as your registered agent. Although, I started to do that for mine and they wanted a total of $484 to file LLC paperwork for me in Alabama. Compare that to $80 and just guess which comes out on top. So you could go to the website and fill out the info they wanted and see how much they'd charge you to file it for you. But it looks like their filing fee is going to make things much more expensive than if you just did it yourself. But that's a way to get around the registered agent thing...

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Michelle
Virtually Effortless

Great point Michelle - I did use LegalZoom to help me get my LLP paperwork in order but did not choose their registered agent option - mainly because I just didn't want someone else that I don't know listed in connection with my business.

P.S. their service was a bit expensive but saved me TONS of time and counts as a write-off at tax time!

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Thanks for the info. I guess where I got confused was if I wanted to file a DBA for the state of TX, in form 503 it makes it sound like I need to form a LLC before I can do the DBA. So I can do a DBA in my county, that's great. Thank you for your help.

Thank you for the helpful information. I live in FL and it sounds as though starting up as a sole propieter might be the best way to go for now.

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Kimberly

Hi,

I live in Idaho and choose to run my business as an LLC (with my husband and I being the members.) The initial fee for the LLC was $100.00.

We recently sold a brick and mortar business that was also an LLC. For tax purposes, our accountant just attached a Schedule C to our personal returns (not sure how that would work for a different state.)

I did learn that if you are going to run your business as an LLC (to enjoy the benefits of liability protection) make sure that you don't put anything in your own personal name. According to our lawyer, that muddies the water and can leave you open to being personally liable instead of just your business being liable if something should go wrong.

Best wishes!

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Jayme Hanson
Your Virtual Assistant Solution

I live in NC. I am setting up my VA business, but my husband also wants to formalize his growing auto repair side work into a business. Can we set up one LLC and then two separate dba businesses? Then combine both under the LLC for tax purposes? Does this make sense?

Cathy

I wouldn't think there would be any problem doing that. Just remember that an LLC is always taxed "as" something else - a single-member LLC is generally taxed "as" a sole proprietorship, a two-member LLC would most likely be taxed "as" a partnership, so I would run this by both an attorney and a tax adviser to be sure that you make the right decision.