Everything is bigger in Texas, including bold business dreams. Choosing the proper structure for your venture is a critical first step in making those dreams come true. Whether launching a food truck in Austin, opening a boutique in Dallas, or offering ranch management in the Hill Country, you’ve likely heard the terms DBA and LLC.
You’re not alone if you’re wondering about the difference between a DBA and an LLC. These two options serve very different purposes. Understanding the key differences can save you time, money, and future legal headaches.
Let’s walk through the key distinctions, advantages, and situations where one or both might be right for you.
What Is a DBA?
DBA stands for “doing business as.” In Texas, it’s also called an “assumed name.” A DBA allows you to operate your business under a name other than your legal name. It is not a business structure. It’s a nickname for your business.
For example, if your name is Taylor Jones and you run a local bakery, you could register a DBA to operate as “Sweet Sunrise Bakery.” The DBA lets you use that name in marketing, signage, and invoices. Operating under a business name instead of your personal name can also add a layer of privacy. However, a DBA does not create a separate legal business.
You can file a Texas DBA or Assumed Name Certificate with the Secretary of State or the county where you operate your business.
What Is an LLC?
A limited liability company (LLC) is a formal business structure created by filing a certificate of formation with the Texas Secretary of State. It creates a legal entity that is separate from its owners. The separation protects your personal assets, like your car, house, and bank accounts, from debts or lawsuits related to your business. That’s a key reason many business owners choose to form an LLC.
Other benefits of an LLC include:
- Personal liability protection,
- Flexible tax options (pass-through or corporate),
- Fewer formalities than a corporation, and
- Ability to create subsidiaries for different business activities.
Forming an LLC gives your business more structure, protection, and credibility. It also comes with more requirements than a DBA.
LLC vs. DBA: What’s the Real Difference?
You may be asking, What is the practical difference between an LLC and a DBA?
Let’s compare them:
| A DBA is: | An LLC is: |
| Just a registered business name,Not a separate legal entity,Inexpensive and easy to file, andUsed by individuals or entities to brand their business. | A separate legal entity under Texas law,Offers liability protection and tax advantages,Costs more to form and maintain, andAllows for complex structures such as subsidiaries. |
You can’t use a DBA to shield your personal assets. Only an LLC (or similar legal entity) offers that protection.
Pros and Cons of a DBA
A DBA is simple and useful, but limited in what it can do.
A DBA might be right for you if:
- You’re just starting out,
- You’re a sole proprietor looking to market under a catchy business name,
- You want to keep your personal name private,
- You’re operating on a tight budget or
- You’re testing out a new business idea.
But a DBA may not be enough if:
- You want liability protection,
- You need to open a business bank account,
- You’re planning to bring on partners or investors, or
- You need to build long-term credibility.
A DBA can be a helpful and affordable way to brand your business. However, keep its limitations in mind, especially when it comes to legal protection and long-term growth.
Pros and Cons of an LLC
An LLC provides much more protection and flexibility, but comes with more responsibility.
The pros of an LLC include:
- Personal asset protection,
- Flexible taxation,
- Increased credibility, and
- Legitimate business structure.
The cons of an LLC include:
- Higher costs due to filing fees and annual franchise taxes;
- More paperwork, like an operating agreement and periodic reports; and
- Ongoing upkeep to stay in compliance with state and federal rules.
Still, for many Texas business owners, the benefits of an LLC far outweigh the burdens.
Can You Use Both a DBA and an LLC?
Yes. Using a DBA under your LLC can be a smart way to expand your offerings or build a brand without creating a new entity.
For example, if your LLC is “Taylor Jones Ventures, LLC,” you could register a DBA called “Sweet Sunrise Bakery” to market a specific product line. You’re still operating under the LLC’s protection but using a customer-friendly name.
Texas law allows LLCs to file multiple DBAs. Each must be registered and maintained individually.
How to Decide Between an LLC and DBA
So, should you choose an LLC or a DBA?
Here are a few guiding questions to help you decide:
- Do you want to protect your assets?
- Are you planning to grow your business or bring in partners?
- Do you want to build a brand with a unique name?
- Are you working with limited startup funds?
Forming an LLC can be appropriate if asset protection and credibility are top priorities. If you’re operating solo and want a simple way to name your business, a DBA might be all you need to start. Some business owners start with a DBA and later form an LLC. Others file an LLC and use DBAs to segment different services or products. An experienced business attorney can help you select the best option for your business.
Why Work with The Curley Law Firm?
At The Curley Law Firm, we help Texas business owners make smart, strategic decisions from day one. Attorney Adam Curley brings years of business law experience and a practical, no-nonsense approach to each client’s unique needs. Whether forming your first LLC or registering multiple DBAs, Adam can walk you through the process. He can explain the difference between a DBA and an LLC, help you select which will meet your needs, and set your business up for long-term success. We’re known for clear advice, personal attention, and local insight into Texas business law. Let us help you build a strong legal foundation. Contact The Curley Law Firm today to learn how we can help with your LLC or DBA needs.