Sometimes when people start a business, they don’t go through the process of forming an LLC or otherwise setting up an official legal entity for their business. Instead, they just choose to do business under a certain business name — this is known as a DBA (Doing Business As) name.
You might be wondering if it is necessary to hire a Registered Agent for a DBA business. The simple answer is no, but the full answer is more complicated — and it gets to the heart of how you really want to be doing business to protect your personal assets and ensure financial security for your business and your personal life.
What Is a Registered Agent?
A Registered Agent is a responsible third party that serves as an authorized point of contact to receive certain official notifications and documents on behalf of a corporation or LLC. As a business owner, your Registered Agent might not need to contact you very often, but they are there in case of extreme situations. For example, if someone decides to file a lawsuit against your business, they would serve the process notice (also known as “serving papers”) to your Registered Agent.
A Registered Agent is also authorized to receive routine correspondence and official notices from government regulators such as the secretary of state, including tax forms or notices related to keeping your LLC in compliance with the state laws for incorporating and maintaining a business in good standing.
Incfile offers a Registered Agent Service that can serve as an authorized public-facing point of contact and mailing address for your business in any state. A Registered Agent gives you the added benefit of having a business mailing address that is separate from your home, which is available to accept and forward any official documents to you.
It’s especially useful to have a Registered Agent service if you are doing business in a different state from your primary residence. The Registered Agent can serve as your local point of contact for official documents arriving by mail, even if you don’t live in the state where your business is registered.
Do I Need a Registered Agent for a DBA?
The more complicated question is this: once you know what a Registered Agent is, do you need one for your DBA? That depends on what kind of DBA business you are running. If your DBA is a simple sole proprietor business that exists “in name only,” you might be required to register your DBA business name with state or local (county) authorities. This might be the case, for example, if you’re an independent contractor who does carpentry and you have business cards printed that say “Bob’s Carpentry Business.”
However, just printing some business cards or making a sign with your business name doesn’t mean your business actually “exists” as a legal entity.
There are lots of simple sole proprietorships that use a business name but do not exist as legal registered business entities (such as an LLC or S Corporation). These sole proprietors who are “doing business as” a certain business name but don’t have a legal business structure do not need a Registered Agent. Registered Agents can only serve for legal business entities — LLCs or corporations that separate the business structure from the business owner as a person.
Although it can be useful to register a DBA because it gives your sole proprietorship an “official” business name, simply using a DBA (with no LLC or corporation set up) is not enough protection for your personal assets or your business identity.
If you really want to protect your personal assets while gaining the tax advantages and other legal legitimacy of being “officially” in business, you need to form an LLC or set up a corporation. This creates your business as a legal entity that gives it a real existence and identity of its own, which is separate from your personal identity and assets.
Can I Use a DBA for My LLC or Corporation?
There is one situation where you might need a Registered Agent for your DBA: If you have set up an LLC or corporation for your business and also filed a DBA name that is separate from the name of your LLC.
For example, let’s say you have a lawn mowing business called Bob’s Lawn Care, LLC. You decide to start offering gutter cleaning services, and instead of setting up a new LLC, you just want to establish a new line of business that is part of the same company. You can set up a DBA to do business as “Bob’s Gutter Cleaning” as well as “Bob’s Lawn Care.” Same LLC, two different business names.
In that case, you can get a Registered Agent for your DBA — but the Registered Agent isn’t technically working “for” your DBA. The Registered Agent would still be in service to the overall original LLC that you set up (“Bob’s Lawn Care, LLC”), even though you are now also doing business as two separate business names.
Getting a Registered Agent is a good idea if you have already set up an LLC or corporation for your business. It gives you an official point of contact and separate mailing address to receive official documents and legal process papers. If you do not have an LLC or corporation set up for your business and are only using a DBA name for your sole proprietorship, you should definitely consider forming an LLC or corporation to protect your personal assets and maximize your business opportunities under the law.
Are you ready to start a business, form an LLC, or reorganize your current business structure with a new DBA or other business incorporation services? Talk to Incfile today! Our incorporation experts can help you evaluate your options with state-specific advice.