Operating a business under a name different from your legal name requires filing for a 'Doing Business As' (DBA), also known as a fictitious name or trade name. This filing is typically done at the state or local level, depending on your jurisdiction. While a DBA allows you to conduct business under a chosen name, it doesn't automatically create a new legal entity. This distinction is crucial when determining whether you need an Employer Identification Number (EIN) from the IRS. An EIN, or Federal Tax Identification Number, is like a Social Security number for businesses. The IRS uses it to identify entities for tax purposes. Many business owners wonder if their DBA, which is simply a registered trade name, requires its own separate EIN. The answer hinges on the underlying legal structure of the business and how it reports its income to the IRS. Understanding these nuances is key to maintaining compliance and avoiding potential penalties.
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