
A DBA, or “doing business as,” is a name a limited liability company (LLC) can operate under that differs from its legal business name. It allows businesses to present themselves with different brand identities without forming multiple legal entities.
In Texas, DBAs offer flexibility, especially for LLCs that want to branch out into various products or services without needing to establish separate companies. By registering DBAs, a business can legally operate under multiple names while being part of the same LLC. This flexibility is especially useful for marketing and expanding into new markets.
But how many DBAs can an LLC have in Texas? This blog post will answer this question and discuss the ins and outs of having multiple DBAs in Texas. At Massingill, we can help businesses navigate the DBA registration process and understand how to maximize the benefits of using them.
Texas Law on DBAs for LLCs
So, what is a DBA? In Texas, LLCs that wish to operate under a name different from their legal business name must file a DBA with the Texas Secretary of State.
The law allows an LLC to register multiple DBAs, and there is no limit on how many you can have. Each DBA requires the submission of Form 503 (Assumed Name Certificate) and a $25 filing fee. The registration lasts 10 years and must be renewed at the state level before it expires.
Unlike sole proprietorships and partnerships, which file DBAs with the county clerk, LLCs must handle their DBA filings directly with the Secretary of State.
This state-level filing ensures legal recognition of that DBA across Texas. However, registering a DBA does not provide trademark protection, so LLCs may need to take additional legal steps if they want exclusive rights to the name.
Benefits of Using Multiple DBAs
Using multiple DBAs offers significant advantages for LLCs in Texas, especially regarding flexibility and legal management. One of the primary benefits is branding flexibility.
By operating under different names for various product lines or services, an LLC can better target distinct customer segments with specific, tailored branding without establishing multiple entities. This approach allows businesses to maintain separate identities for different markets or regions under the same legal umbrella. Key benefits include:
- Ability to market various services under unique names;
- Simplified operations, as multiple DBAs remain part of a single LLC; and
- Cost savings, as there’s no need to form separate legal entities.
Additionally, LLCs can protect their unique brand names through DBAs without the complexity of managing several companies. This simplifies accounting, tax filings, and legal requirements, making it easier to run diverse business operations under a unified structure.
The Process of Registering DBAs in Texas
For LLCs in Texas, registering a DBA is a simple but important process to ensure the business can operate under different names while remaining under the same legal entity. Below is a step-by-step guide to registering a DBA in Texas.
1. Choose a DBA name
Choose a name not used by another business and check the Texas Secretary of State’s online tool to verify availability before proceeding.
2. Complete Form 503.
The Assumed Name Certificate requires essential details such as your LLC’s legal name, the selected DBA, business structure, and principal office address.
3. Submit the Completed Form to the Texas Secretary of State
LLCs must file directly with the Secretary of State. The fee for each DBA is $25 and can be filed by mail or in person.
4. Renew the DBA as necessary.
DBAs in Texas are valid for 10 years, so make sure to renew them before expiration. To keep your DBA active, you must submit a new assumed name certificate and pay the renewal fee.
Can an LLC Have Multiple DBAs?
Yes, an LLC can register multiple DBAs in Texas, but it requires careful management to ensure operational and financial clarity.
First, managing multiple DBAs can introduce challenges, especially when it comes to business operations. Each DBA represents a distinct business identity, which may require separate branding, marketing efforts, and customer management. Maintaining clear organizational structures and workflows for each DBA is essential to avoid confusion.
Accurate accounting and bookkeeping are critical from a financial perspective. Each DBA’s business activities, expenses, and income should be tracked separately to ensure that financial reports and tax filings remain accurate. Failing to separate these activities could lead to accounting errors, making assessing each DBA’s profitability difficult.
In terms of tax implications, DBAs do not change an LLC’s tax status. The LLC remains the single taxable entity, regardless of how many DBAs it operates. However, owners must still ensure proper reporting of income associated with each DBA.
Potential Pitfalls and Legal Issues
There are several potential pitfalls and legal issues to consider if you register multiple DBAs under one LLC. One common issue is name conflicts, which can arise if a DBA closely resembles or duplicates an existing business name. It’s important to search state and federal databases to ensure the desired DBA is available and doesn’t infringe on another business’s rights.
Compliance with state and local regulations is also crucial. To avoid penalties, an Assumed Name Certificate must be filed properly with the Secretary of State and renewed on time.
Key considerations include:
- Verifying the availability of the DBA to prevent name conflicts,
- Ensuring timely renewal of DBAs to remain compliant, and
- Avoiding penalties for non-compliance with state filing regulations.
A Texas business attorney can help you stay compliant and properly manage these issues to ensure smooth business operations.
Trust a Texas Business Attorney at Massingill
We’ve got you covered if you need help with business formation, transactions, contracts, or legal filings like registering DBAs. At Massingill, we provide comprehensive legal support to ensure your LLC operates smoothly and simplify the legal process so that you can focus on running your business.
Contact us today by calling one of our Texas offices or filling out our online contact form to discuss how we can support your business law needs.
Where to find our Austin office
Where to find our Abilene office