DBA Question

[Steelsun]

Originally Posted by saroy

Ok, here's a stupid question that I know has been answered before, but I want to make sure I understand...

I DO NOT need a DBA if my business name includes my own name? Correct?

So things like Sarah Graybeal Photography or Graybeal Design (with no first name) do NOT need a DBA while something like Blah Blah Images does. Is that right?

In Texas you are supposed to get a DBA, even for a business with your name in it, although some banks will let you open an account without a DBA filing in that case. Other states allow a business with your name in it without a DBA. It's better to be on the safe side though and just pay the $7 to $20 (depends on your county) for the DBA.

Neat little trick I have seen in some investigations I have done.

Get a DBA for a business name that sounds like a person's name, i.e "Joe Smith", if the clerk questions this, just say you are opening a smithy service and your nick name is Joe.

A few days or weeks later, use that DBA as the owner to file another DBA, in a general sounding business name. I.e. "Joe Smith Services" or "Smith Associates"

A few days or weeks later, use that one to open your real DBA i.e "Camera Eye Photography"

Use a pay for mailbox as the address on all of them.

Depending on how the clerks process your DBAs (i.e. what info they record on the bottom, like TDL, doc numbers etc), when someone looks up the owner of DBA#3, they see "Joe Smith Services", and then they look up that, they see "Joe Smith" and stop, thinking that is the owners name.

Not that I would advise such a ruse, mind you. And just an FYI, I don't think this can be done in Harris County anymore due to the changes they made in the DBA filing and recording system about 2 years ago.

[saroy]

Originally Posted by OversighT

Wrong... you do need a DBA. My DBA was for "Troy Schneider Photography" and now I can have checks made out to that name and desposited into my business account. As Jesus said if you don't get a DBA for "Graybeal Design" then I could register a DBA for that exact name and take it.

Thanks Troy and Jesus and Steelsun and everyone. I didn't even start this thread but I'm learning all sorts of good info. You guys are a wealth of info!!

[haraki74]

Not sure if this will just cause more confusion, but this comes from the Texas Comptrollers office.

Choose the Legal Entity
Three basic forms of business organization exist: proprietorship, partnership, and corporation. The form defines ownership of the enterprise and liability for its actions. The Texas Legislature Online provides links to sections of the Commercial Code for different kinds of businesses. A new site at the Small Business Administration also explains legal terms in plain English.


Sole Proprietorship

An individual may choose to operate in this most simple form as a single owner. If he/she does not call the business by his/her personal name, then the enterprise name should be registered at the nearest County Clerk's office, which records the company name as the DBA and refers to the person "doing business as... "

Partnership

If the business has more than one owner, they may decide upon a partnership. The owners can share assets and liabilities equally, or in various proportions. A partnership agreement will stipulate the terms. Some investors may want to separate their personal property from the business assets. They can become Limited Partners. Limited partnerships are required to file organizational documents with the Secretary of State.

Other investors may bear full personal liability for the business. They are General Partners. General and limited partnerships may opt to register as limited liability partnerships in order to limit liability, but are not required to do so.


Corporation

A corporation can have one or many owners, whose personal liability is limited to their investment in the enterprise. Ordinarily, creditors have no claim to the personal assets of corporate owners in the absence of fraud or other types of wrongdoing. A corporation must also register with the Secretary of State.


IMPORTANT NOTICE: The information in this document is presented solely as technical assistance and as a resource available to entrepreneurs. The information does not serve as a substitute for legal advice or tax advice nor replace the independent judgment of an appropriate specialist. An entrepreneur should consult his/her attorney, accountant or other appropriate professional to answer specific questions about establishing various forms of business organizations, and the advantages and disadvantages of each entity.

Here is a link for a DBA form if you live in Harris County

[JohnT]

All of the work I've done thus far has been for non-profit orgs with a tax-exempt number (e.g., churches). Anyone know if I should obtain a sales tax I.D. even though I don't charge these orgs sales tax?

[jerrykr]

If you purchase supplies such as printer ink or photo paper that go into your final product, you could use your own Tax ID when you purchase them and not pay sales tax on those items.

Your Tax ID makes YOU exempt from taxes not your customer. Of course, if you collect sales tax, you must have the Tax ID, which doesn't affect you in this case.

What I have said might be a little in a grey area, since your customer does not re-sell your product and charge sales tax.

An expert might chime in here and clarify this situation.

-=- Jerry -=-
/*

[JohnT]

Originally Posted by jerrykr

If you purchase supplies such as printer ink or photo paper that go into your final product, you could use your own Tax ID when you purchase them and not pay sales tax on those items.

Your Tax ID makes YOU exempt from taxes not your customer.

-=- Jerry -=-
/*

Right. My concern is if I need to be on record with the state and file those quarterly or annual sales declarations even though my sales are to NPs, from which I collect no sales tax.

[jerrykr]

I'm not exactly sure for your situation. Hopefully that expert will chime in.

cheers,

-=- Jerry -=-
/*

[haraki74]

Go straight to the state comptrollers office and ask them that very question. You can do it by phone at 1-800-252-5555 or e-mail them [EMAIL="tax.help@cpa.state.tx.us"]here.

[adam7731]

that is the key statement. Creditors can not go after your home if you have a LLC or INC. IF someone breaks their arm on your site they can sue your CO and you you can be sued even if you have a LLC or INC... people really need to understand that before they go and get one.

but again the key is creditors cant come after and say i want your home and boat because you couldnt pay your bill. Just like the irs if your CO has bad taxes the IRS will not come after the house to pay the debit. your INC and LLC stands on it's own.

It's not that expensive to get your LLC or INC in texas. It will cost you under 500. You can probably do it for less. Now if you get a laywer to do it you will run about 1500 to 2500.

found out the stated filling cost 325 to get and INC or LLC. Here is a great site that will probably do my LLC when I deciede to get one. http://www.activefilings.com/states/states.php?texas

My accountant and lawyers both said the same thing, when you make enough money and you will know when that is then worry about getting LLC or INC. They both stated that it's not for suit protection it's to protect your cash at tax time.

truthfully if you have questions google it and go to the state and after that collect all your info and go to the lawyer or CPA and say here is my 50 bucks would you answer 4 or 5 questions. I think I gave them 100 bucks and told them to let me know when I was out of time. Mind you my CPA and Lawyer are friends of mine and I still wouldnt ask them to do something for free. Think of it as buying peace of mind an not just spending money.

[Steelsun]

Originally Posted by adam7731

Creditors can not go after your home if you have a LLC or INC. IF someone breaks their arm on your site they can sue your CO and you you can be sued even if you have a LLC or INC... people really need to understand that before they go and get one.

That's not totally right.

There is something called "piercing the corporate veil", where if you are not careful you can be sued and held liable for the actions of the corp. SOme of the factors that play into consideration for piercing the corporate veil:
1) One person company
2) Comingling of funds (real hard to prevent when starting out - you'll be cosigning/guaranteeing loans & credit as an individual)
3) Crappy bookkeeping
4) Absence of a wage/salary that is clear and concise (i.e. just taking a profit)
5) Tax reporting
6) Failure to keep proper corporate minutes/meetings
etc

It's quite common. I frequently am called on to investigate a person who has an LLC or INC for their assets in order for those to be attached or seized.

[adam7731]

Originally Posted by Steelsun

That's not totally right.

There is something called "piercing the corporate veil", where if you are not careful you can be sued and held liable for the actions of the corp. SOme of the factors that play into consideration for piercing the corporate veil:
1) One person company
2) Comingling of funds (real hard to prevent when starting out - you'll be cosigning/guaranteeing loans & credit as an individual)
3) Crappy bookkeeping
4) Absence of a wage/salary that is clear and concise (i.e. just taking a profit)
5) Tax reporting
6) Failure to keep proper corporate minutes/meetings
etc

It's quite common. I frequently am called on to investigate a person who has an LLC or INC for their assets in order for those to be attached or seized.

very true. normally you cant get some one to believe that because they have been told all through school and live that you cant get sued if you have a INC or LLC. which is very untrue just as you had stated. your main protection is taxes and LIMITED liability.