QUESTION

DBA, LLC, or Sole Proprietorship

Asked on Jun 04th, 2018 on Business Law - Illinois
More details to this question:
Hello. I'm a freelancer and I own three e-commerce stores (different names for each). Which of these business types should I get if I want all of my businesses under one fictitious name and under one "umbrella"? Thank you for your time.
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1 ANSWER

Appellate Practice Attorney serving New York, NY
You can have them all under one name and one umbrella using any of these forms (d/b/a is not a form, it simply means doing business as; any type of business structure, whether it be corporate, sole proprietership. llc, etc. can use a d/b/a).  The difference is that in a sole proprietorship, the owner is personally responsible for the liabilities of the business.  In a corporation or llc, the entity alone is obligated (assuming tha the entity is operated properly and the owner has not personally guaranteed any obligation). If you have all of the businesses owned by the same person or entity, the businesses will be considered as one, and will each be responsible for each other's obligations.  Thus, if you form ABC llc to own each of the businesses, and one business has an auto accident for which it is liable, not only that business's assets but all of the businesses; assets will be used to pay that obligation. For this reason, you may wish to form a holding entity.  For example, you might have each business owned by a different llc, and a separate llc owning the other llcs.  This will cost you some money to set up, but if you have assets you want to shelter, you may want to consider this or some similar structure where the businesses are all operated by separate entities and owned by an entity, so that your personal assets are protected, and the assets of one business will not be used to pay the obligatiohons of another.
Answered on Jun 04th, 2018 at 3:42 PM

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