One limited liability company can have two “doing business as” (DBA) licenses. The LLC, similar to a person or corporation, is considered a separate entity from its owners or “members.” An LLC can do business under the legal name its members chose when filing the LLC with the state, or it can choose one or more fictitious names to operate under.
Some states do not require a person, corporation or LLC to get a license to use a fictitious business name in order to operate business using that name. The U.S. Small Business Administration offers a list of each state’s filing requirements regarding DBA licenses (see Resources). Your state does require that you name the LLC at the time you file your LLC, and this name becomes your legal business name. According to the Small Business Administration website, “Your business' legal name is required on all government forms and applications, including your application for employer tax identifications, licenses and permits.”
An LLC is not recognized as a business structure by the federal government. Under your legal business name, you must choose to be taxed as a sole proprietorship, partnership or corporation. You need an Employer Identification Number from the Internal Revenue Service after you establish your LLC. You can report your income from business conducted under two or more DBA names using the same EIN. As the IRS states on its website, you are not required to obtain new EINs if you operate under multiple business names, locations or divisions of the same corporation.
Operating two businesses under one LLC can mean keeping separate ledgers and bank accounts for each business. Your bank may require you to use separate bank accounts for each DBA name so that checks written to your businesses match the appropriate accounts. It can get messy to mingle funds or bookkeeping from multiple businesses, even if you’re meticulous in your accounting practices.
Separate LLCs Tip
Organizing two separate LLCs, instead of operating two DBAs owned by one LLC, might be necessary if you’re operating in two different industries, or if your businesses are otherwise vastly different from each other. Establishing each business as its own LLC might also be in order if one business puts your personal assets at greater risk than the other, or if you intend to sell one of the businesses and not the other someday.
- James Woodson/Photodisc/Getty Images