DBA ownership

Discussion in 'Growing and Managing a Business' started by DAVYM, Jul 27, 2011.

  1. DAVYM

    DAVYM
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    Can I file a DBA for a company, under my current LLC license in Nevada, and have a separate majority owner listed for this subsidiary ?

    DAVYM
     
  2. ArcSine

    ArcSine
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    First be clear on the distinction between a DBA and a subsidiary, as they are not equivalent.

    If you file for your LLC to operate under a particular name (a DBA), you have only one entity. In such case the ownership of the DBA is the same as the ownership of the LLC itself, as they are one and the same.

    A subsidiary, OTOH, is a separate legal entity, such as a second LLC, or a corporation, in which the first LLC has a significant ownership.

    The ownership of the subsidiary can---and will---be different from that of the parent LLC.

    I'm not sure if that addressed your question....check back in with more details if not.
     
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  3. DAVYM

    DAVYM
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    Yes you answered my question. I just filed an FFN for my LLC and wasn't sure if I could structure a dba(ffn) with an alternate owner under my single license. Being this is my first small business ever license and already "doing business as" using another name had me wondering about the the ability to have on record an alternate owner for said FFN. My net worth is zilch anyway, just trying to start somewhere though. I am going to research more info on an OTOH. Thank you very much for your input. Greatly appreciated :)

    I owe you one ArcSine,
    DAVYM

    OTOH......OnTheOtherHand...it just hit me what you meant...rofl

    Thanks again!
     
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  4. ArcSine

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    Glad to help, DAVYM and best of luck with the new biz. Have an excellent weekend!
     
  5. nbt902

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    I also have a question regarding DBA Ownership. I need to open a DBA to operate under my existing LLC. I wish to have different owners of the DBA than of the LLC, can I do this? Have different owners of the DBA and different umbrella owners of the LLC? If so, how to file this / indicate ownership? I'll be using Legal Zoom most likely. Thanks so much.
     
  6. ArcSine

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    A DBA is not a separate entity, but rather is simply a name under which the LLC conducts its business. Hence the ownership of the DBA and of the LLC are the same.

    If you're contemplating that the LLC will be conducting a line of business separate from that of the LLC's other activity(ies), and you'd like to have the profits / losses from this separate activity flow to parties other than the ownership structure of the LLC itself, there are two-and-a-half ways you might accomplish your objective. (The third method below is a bit arcane in the small-biz universe, kinda tricky to implement, and so I don't give it as much weight as the first two.)

    • Create a separate legal entity (LLC, corporation). The ownership of this entity can be as similar to, or as independent of, the ownership of the main LLC as desired. (Easiest)
    • Operate the second activity as a separate division or department under the main LLC, but channel its profits into the desired hands via bonuses and profit-sharing arrangements. (Scores about as high on the Easy-O-Meter as the first method)
    • Operate the second activity under the main LLC, but create a second class of equity to which the profits, losses, and cash flows of the separate activity are allocated. (Prepare to spend some quality time with your attorney and finance advisor)

    With the second method you could enhance the "ownership feel" by giving those individuals a lot of managerial autonomy in running the separate activity. Obviously with this method your accounting system must be able to accurately determine the profits of the division as a separate profit-center.

    Under the third method you'll have just the one LLC, but its total ownership will be represented by two classes of equity. One class is entitled to all the profits of the new, second business activity, while the LLC's profits from its original activity flow solely to the other equity class. The ownership of the two equity classes can be different, thereby achieving the desired result. Once in a very infrequent while there are circumstances that make this strategy attractive, and so I mention it merely for the sake of completeness. Google "tracking stock" for more info if need be.

    Cheers, and best of luck!
     
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  7. nbt902

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    thank you!

    Couldn't have answered my question any better. Thank you very much.
     
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  8. ArcSine

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    My pleasure, Nbt902. Best of success to ya.
     
  9. DAVYM

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    Thanks for your input ArcSine. Much appreciated.

    DAVYMLLC.com
     

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