DBA and Registeration

[Chef Isaac]

Is it worth regestering your business name and getting a DBA???

[Sarge]

That depends on your business plan and goals. The DBA alows you to handle checks and transfers made out to the business. But if you don'y have alot of that you don't need it. It also alows you to choose and use a cute little business name for better marketplace recognition. But if you are Joe Bob with Joe Bob's Bees it isn't much help.
At some levels an LLC or even incorporation can be a better choice.

[Bizzybee]

Maybe that's a state or local thing for you? I can Do Business As "DBA" any name I care to. There is no registration that takes place. By my showing "DBA" on legal documents is a clarification and declares my intent as doing business under another name. Thus for tax purposes more than anything else, separating my income from my business.

You should check with your town or county to see what regulations you fall under for your type of business. Some require that you have a public front, or store front so to speak. Before they require a "Business License". That license may very well be written with a business title "Your Name DBA Whatever". Whether doing business with your name or not. Come tax time, you will only fill out the long form with the appropriate forms and schedules to report your business income.

If you intend to "Sell" goods, which most do. You will most definitely need to get a state tax ID number. And contrary to proper belief, it does not get you out of paying any taxes. :( It provides a means for you to report sales tax to the state. It also allows you to give it to your wholesalers that will "exempt" you from paying tax on the sale. You will then charge your customer sales tax on the goods when it is sold to the end user of the product. If you are the consumer of the product (or your business) then you will report it and (then) pay tax on it. Which you didn't pay when you purchased it. If what you sell is services (labor) in most cases, there is no tax charged. And if that is all you intend to do, you may not need a sales tax number.

If you want to get into a corporation of any type and there are a few. See an accountant and or a tax attorney!

I have operated businesses in GA and NC and have some experience in this stuff. One a Sub Chapter S Corp. Which is a sweet deal, if it's what's right for you. But we ain't doing that here.

And most important USE THIS WITH A GRAIN OF SALT!!!!!!!!! Laws are different EVERYWHERE. CHECK YOUR LOCAL REGULATIONS!!!!

NOT BIZZYBEE RANTING, INC.. :D:D

Good Luck!!! :)

[randydrivesabus]

around here you register your business name with the county so that no one else uses it. if you incorporate you reserve the name with the state. not sure about LLC. probably the same as corp.

[Chef Isaac]

No real advantage in a DBA per say. Checks can be made out the the business name rather than myself personally. Also some markets require a business lisence.

I do not think there is tax on honey.... I heard this somewhere.

[randydrivesabus]

here in VA theres a sales tax on food.

[naturebee]

There is some advantage in that it helps me to keep the books separate from my personal expenses. In order to do business on ebay and facilitate the use of pay pal which many customers prefer, I thought it best to get a separate account. The bank required that I register my business in order to get the buisness account. The DBA helps because taxes can be done as 'personal income' under my own name instead of doing a totally separate tax preparation for the business. I also keep a DBA credit card for business purchases.

[Chef Isaac]

Did you say credit card?... mmmm.... :)

[Bizzybee]

LOL LOL

Easy boy.................

[kc in wv]

Here in WV even a farmer has to have a business license if he sells to the public. If gross sales are low (I think it is $400 per year) they don't charge you for the license. Otherwise, the business license is $30 for 2 years.

Each state is different. Here is a link I found for you
http://dor.wa.gov/docs/pubs/excisetax/filtaxreturn/cetr_mq_guide_06.pdf

[RonS]

Chef,

I don't know the rules in Washington, but in TX we can register a service mark or a trademark for the name/label/design. I realize that is not the same as a DBA, but several beeks spend a lot of time, and sometimes money, working up their unique logo, only to have it swiped. If you are past the hobby side and moving into the business side, maybe even a sideliner, you should consider this. It costs $50 in TX.

Ron

[samiyam318]

This is a state-by-state issue; the requirements will vary widely. Nobody on this site can probably tell you everything you need to know.

Why do you want to do these things? A lot of people set up business entities such as corporations and LLCs because it makes them feel more business-like. They can be more trouble than they're worth, and in some states require more effort than you will want to expend. If you have a separate legal entity you may have to file not only yearly reports to the secretary of state but federal and state tax returns as well.

If you are seriously considering it you should consult a lawyer who has experience with small businesses. If the lawyer indicates divorce, drunk driving, personal injury, social security as "specialties" move on to someone else.

The consultation will not be expensive (the lawyer should quote you an hourly rate up front) and if you are at a beekeeping level where this is important to you it may well be worth it.

[Dan Williamson]

These are all state issues. Each state has its own set of rules.

I set up an LLC. Setting up the business required that I have "LLC" on the end of my business name. I had quite a volume of honey labels already made up and most people already knew my name as B&C Honey Farm so I filed the paperwork for DBA B&C Honey Farm. This allowed me to drop the LLC from my name on my products. My taxes will still be filed under the LLC however. It only cost me $15 to do this and was cheaper than buying new labels.

To file a business name was I think $30 every two years. Then I had to get an employee tax ID # from the IRS. I have no employees but its basically a tax ID for your business. I was NOT able to set up a business bank accout without this Tax ID #. I was also not able to get a CC for the business without the Tax ID#. Having both a CC and bank acct for the business made it much easier to keep things separate and cleaner for tax purposes.

It isn't that difficult to do... My state had all the information under the Secretary of State website. There are probably small business links under your state website.

[Ross]

In our county, it gives the county the information to hit you with a business property tax. Personal property is untaxed other than real estate, but not so with a business.

[timgoodin]

It would depend on what your state law says. Here in KY you are not required to use DBA if your name is in the business name. If it's not then you are required to record a Affadavit of Assumed Name with the county clerk of records if an individual or sole proprietor. If corporation then you are required to file Affadavit of Assumed Name with the Secretary of State's office.


Also don't let someone talk you into getting EIN (Employee ID Number) just because you are a business. I had someone come in where I work, they had filed for an EIN because they were a "small home business" and someone told them they had to have an EIN and now the IRS was wanting to know how many employees they had, why were they not filing quarterly witholding reports with IRS, etc, etc. Our CPA told me they could have filed the income on their personal return and a seperate EIN was not needed.

Tim

[Dan Williamson]

It would depend on what your state law says. Here in KY you are not required to use DBA if your name is in the business name. If it's not then you are required to record a Affadavit of Assumed Name with the county clerk of records if an individual or sole proprietor. If corporation then you are required to file Affadavit of Assumed Name with the Secretary of State's office.


Also don't let someone talk you into getting EIN (Employee ID Number) just because you are a business. I had someone come in where I work, they had filed for an EIN because they were a "small home business" and someone told them they had to have an EIN and now the IRS was wanting to know how many employees they had, why were they not filing quarterly witholding reports with IRS, etc, etc. Our CPA told me they could have filed the income on their personal return and a seperate EIN was not needed.

Tim

Tim

There is no need for an EIN just to have a small business. HOWEVER, at least in Indiana, I WAS required to have an EIN to get a Business Bank account. My goal was to establish credit under the business name with a Business Credit Card as well. For both of those they required the EIN number to get things set up.

Also... if you need to buy equipment from wholesalers for your honey house etc... (such as Grainger) you will need an EIN to set up an account because they are not retailers and will not sell directly to you.

No an EIN number isn't necessary but it allows you to do other things such as set up an account that shows you are keeping your business separate from your personal finances. (Even though you may be filing it all as income or loss ultimately through your personal income tax return)

Do what works best for you in your situation.

[Ross]

You can obtain a sales tax certificate in Texas without registering a DBA or anything else. That is all you need to buy wholesale. Of course, at that point you are obligated to collect sales tax on applicable items that are delivered in state.

[kc in wv]

HOWEVER, at least in Indiana, I WAS required to have an EIN to get a Business Bank account.

Dan, I think this could be a state or even a bank requirement. When I opened a new checking account for my business (the one where I make my living) recently, the bank used my SS number and opened the account with my name and DBA "my business name".

To try and prevent terrorist and drug dealers from hiding money, the banks are required to create a trail that leads any account to the people using it. The EIN was originally used for tracking employers. Now it has been expanded into helping with the tracking of these illegal activities. Therefor a corporation or LLC uses a EIN for the purposes of assigning a number to the entity, just like the SS number assigns a number to a person.

When I was young you applied for a SS number sometime during high school but before you started working. Now a newborn baby doesn’t leave the hospital without a number.

By the way I have been told it is hard to close down a corporation or LLC. They don't just go away, once created they exist forever until they are closed by filing the proper forms usually by an attorney or accountant.

[Sarge]

One advantage for me of the DBA was for taxes. The business accounts were clearly seperate from personal, and this made it easier to claim the right deductions as well.
The same runs true of a corporation, but a sole proprietorship is simpler.

[Dave W]

>I WAS required to have an EIN to get a Business Bank account . . .


An EIN is NOT required in order to get "get a Business Bank account".

I have two accounts under business names, and do NOT have an EIN.

The only way I have found to cash (deposit) a check made payable to "Any Company Name" is to have a bank account under that name.

[Dan Williamson]

>I WAS required to have an EIN to get a Business Bank account . . .


An EIN is NOT required in order to get "get a Business Bank account".

I have two accounts under business names, and do NOT have an EIN.

The only way I have found to cash (deposit) a check made payable to "Any Company Name" is to have a bank account under that name.

Interesting...

I checked with 2 banks and was told the same thing.

My business is an LLC. I wonder if that had something to do with it?

If I'm wrong then my apologies.... So let me rephrase.:D.......I know I couldn't get an account at the banks that I talked to without an EIN# for my particular LLC.

[Bizzybee]

An EIN is required with any Corporation. A Corporation can be thought of as a virtual person. That is the main reason for forming a Corporation. It is in itself a separate entity from you. You are an employ of the Corporation and in being so you shed liability to the Corporation. There are several types of Corporations that can be used and takes varying levels of liability off of you the Officers and share holders. Forming a Corporation is far more than filling out a form and paying a little fee. I personally would not recommend setting up a Corporation without consulting an attorney and an accountant.

As for the EIN. It is to the Corporation as your SSN is to you. The state and IRS does not recognize your SSN as identification for a Corporation. In fact, if you mingle your finances and holdings between yourself and (your) Corp. You might find yourself in the pokie. Or at least paying some nasty fines in court.

[timgoodin]

Bizzybee is correct.

The bank where I work requires an EIN only if you are considered a corporation (C corp, S corp, LLC, etc), partnership or other ENTITY such as a non profit association, church etc (anything besides a person).

A Sole Proprietor is not required to have an EIN and can use a TIN to open a business account. The US Patriot Act requires all banks, financial institutions, credit unions, (basically anyone doing any kind of financial services) to collect a TIN or EIN as part of a customer information profile to screen for terrorists or other money laundering. There are very hefty fines for noncompliance from financial institutions.

I don't know if the IRS has a threshold on income limits for filing as a small business and a sole proprietor using one's SSN or TIN, I would not think so as long as they don't have employees that must have SS taxes and income taxes, unemployement insurance etc withheld from paychecks.

I have dealt with farmers for the last twenty one years and most in my area use their SSN/TIN number and "contract labor" in lieu of employees. Only Entity's use the business ID or EIN in my experience.

The LLC would require a EIN as Dan pointed out.

Looks like I opened a can of worms on this one...Sorry, just trying to be helpful.


Tim

[Bizzybee]

Good to know stuff Tim!!! Even if you don't use it.

[Dan Williamson]

Looks like I opened a can of worms on this one...Sorry, just trying to be helpful.
Tim

No need to apologize.... We've got to make sure the facts are straight. I certainly wouldn't want to give out unclear or inaccurate information. That's the beauty of a place where many people can contribute.

It should also be a place where if people disagree they can feel free to voice their opinions. Ultimately we all benefit from the exchange of information.

[GaSteve]

I did not have to have a EIN to open a business account as a sole proprietor. But I did have to sign some forms stating that I wasn't opening the account to launder money -- like a money launderer would ever admit it up front.