Should I start an LLC or operate as a DBA?

I am attempting to start a consulting business for myself. I will also have a
colleague who will be offering services through my company as an independent
contractor. Can I operate as a DBA or should I form an LLC?

Asked on January 21, 2018 under Business Law, New York


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Form an LLC and run the business through it. As the term "limited liability company" implies, an LLC limits you from personal liability--i.e. it protects your personal assets (e.g. home, money in the bank, car) from  the majority of business related debts, obligations, or liability--such as if someone sues your LLC for breach of contract, if they feel you failed to deliver what was promised. (The protection is not total: you would still be liable for any debts or obligations you guaranty for the business; when you personally do something giving rise to liability, like if you are driving somewhere for business and hit someone, in which case you are sued for your personal bad act, not because you are a business owner; and for certain tax debts.) A DBA offers no liablity protection. It is well worth it to form an LLC to protect yourself from business liability and debts.

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