If you want to open your own business and you are serious about your business growth, you will benefit greatly by adding an LLC to your business name. An LLC helps add credibility to your business, but it also provides you with layers of protection from liability. The following are some things you need to know about LLCs and your official business name:
What is an LLC?
An LLC is a limited liability corporation. You can start an LLC by simply filling out the paperwork with your Secretary of State's office and paying the necessary fees. It is an inexpensive way to start a business.
Like a corporation, LLCs will protect you in the event your business is sued. Without an LLC or a corporation, your personal assets are at risk if your business is sued. This means you can lose your home, your car, and a lot of money in a lawsuit. In contrast, an LLC creates your business as its own entity. It can be sued, but only the assets of the business are at risk, not your personal assets.
LLC and Your Business Name
Before you can form an LLC, you need to have an official name for your LLC. LLC names are different than what you would want to actually call your business. Most people use their name or initials in their LLC names, such as Smith and Smith LLC. However, that name does not sound very marketable. In this case, you would want to file a DBA, or a "doing business as" to your LLC business name. In the previous example, the business name could be Smith and Smith LLC. DBA Tim Smith's Landscaping. This way, you can more easily market your business, and potential customers will know immediately what type of services you provide.
When it comes to business marketing materials, keep in mind you do not have to place your entire LLC business name. Smith and Smith LLC DBA Tim Smith's Landscaping does not easily roll off the tongue, and it is a lot to put on your business cards and letterhead. Instead, just use your DBA business name in your marketing and branding. You only need to use your LLC business name on official financial and legal documents.
If you are interested in adding an LLC to your business and you have questions about the legalities and your rights within a limited liability company, be sure to consult your business law attorney.