Do I Need an EIN if I Am a DBA?

By Chris Blank

As a business owner, you may operate under a "doing business as" or DBA, which differs from the legal, registered name of your business. The fact that your business operates as a DBA does not directly affect your need to obtain an Employer Identification Number, that the Internal Revenue Service assigns. It is the structure of your business itself that determines whether or not you need an EIN.

Uses for a DBA

Sole proprietors have the option of operating their businesses under their own legal names or as a DBA. Partnerships, corporations, S corporations and limited liability companies may use a DBA to operate under other than the names that they legally registered with in their states. Businesses operating as a DBA must file fictitious name petitions and obtain fictitious name certificates. This process provides notification to the public of the true identities of the persons or corporations operating as a DBA.

Uses for an EIN

An EIN establishes separate entities for the purpose of filing federal income tax returns. Certain businesses, trusts, nonprofit organizations, farmers' cooperatives, estates and real estate investment entities must obtain an EIN. Tax returns concerning alcohol, firearms or tobacco proceeds must also include an EIN. A company or a sole proprietor that hires employees, whether temporary or permanent, must obtain an EIN. In addition, tax returns that reflect taxes withheld from income other than wages that were paid to non-resident aliens must also include am EIN.

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Corporations, Partnerships and LLCs

The IRS requires businesses structured as partnerships and corporations to obtain an EIN, even if they do not operate as a DBA. The IRS does not recognize LLCs as separate entities for tax-paying purposes. Instead, a business that operates as an LLC files federal income tax returns as partnerships, corporations or sole proprietorships, depending on how they are structured. An LLC structured as a partnership or corporation must obtain an EIN. The IRS does not require an LLC that is structured as a sole proprietorship to obtain an EIN, whether or not they operate as a DBA.

Sole Proprietorships and EINs

Sole proprietors often operate under a DBA to establish separate identities for their businesses to potential customer or clients that are distinct from their personal identities. However, the IRS does not require a sole proprietor to obtain an EIN, even if she uses a DBA for her business. Instead, she would use her personal Social Security number. Nonetheless, a sole proprietor using a DBA may wish to obtain a separate EIN for the business as well, to further distinguish her business transactions from her private affairs. In addition, many banks require that a sole proprietor must present present a DBA certificate, an EIN, or both, as a condition of opening a business bank account, which is an essential element of establishing separate business credit.

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Do You Need a DBA for Sole Proprietorship?



Related articles

Do General Partnerships Require a DBA?

DBA, or doing business as, occurs when a business operates under a name other than its legal name. A general partnership can always choose to use its legal name, which is the combination of the names of the partners; a DBA is not required. If the partnership chooses to operate using a name other than its legal name, however, many states require that the business register this name.

Legal Use of DBA for Independent Contractors

Independent contractors are self-employed workers who provide services to others on their own terms. An independent contractor may be a sole proprietor or the sole owner of a limited liability company, corporation or other type of business. Although independent contractors typically work alone, they are still businesspersons who must exhibit a professional image, just like a company with multiple employees. A "doing business as" name, known as a DBA, is one way to project professionalism while reaping the benefits of self-employment.

Define DBA

A DBA, short for "doing business as," refers to the name a company or individual uses when it operates under a different name than its legally registered name. Most states require you to register your DBA with either your county clerk’s office or with your state government, depending on where you're doing business. DBAs are also called "assumed names," "trade names," or "fictitious names."


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