Why Real Estate Agents Don’t Need a DBA
A DBA stands for “Doing Business As”. The idea here is that you have a business that is operating under a trade name — the name that everyone knows, that everyone recognizes when it comes to your business — but it may not be the official name of that business. People who own McDonald’s franchises, or Subway franchises, they’ll register a business that doesn’t have anything to do with that brand, but then they’ll create a DBA for a specific location, and say that it’s actually registered as “XYZ LLC”, but it’s doing business as “The Subway on Main Street”.
So a DBA is really a placeholder. It’s a way to claim the official use of that name, the registration of that name. So, for example, when you register a DBA, “The Subway on Main Street”, nobody else can register an LLC or corporation with that name.
And often where I get to in this conversation with realtors is I tell them, “I don’t recommend an LLC yet”. And so they ask me, “Well, what about a DBA?” Well, if I’m not going to recommend an LLC, I’m also not going to recommend a DBA, because do you really have a brand out there that you’re worried other people are going to register that name before you get an opportunity to? For real estate agents, I don’t think so.
When you register a DBA, there is no legal separation. You’re not registering an LLC. So even as thin as the separation between you personally and your LLC might be, with a DBA you’re not even getting that separation. You’re not getting any tax advantages. You’ve taken a fairly straightforward process and you’ve added an additional layer of complexity to it with that DBA. I don’t really recommend DBAs for my real estate clients.
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