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If I have an LLC, will creating a dba under the LLC also provide me with the limited liability protections of the LLC?

Milwaukee, WI |

I will also be adding a cloth-diaper product line to my LLC under my DBA, what should I be aware of business wise? Can I trademark my DBA?

Attorney Answers 3

Posted

I can't speak to the specifics of Wisconsin law, but using a dba should not affect the liability protection afforded by the LLC. A dba is essentially just a nickname. In some circumstances, if the LLC has factors in common with another company (e.g., common owners, similar line of business, etc.), using a dba that is similar to the name of the other company could be an additional factor that could lead to a court holding that one company is the alter ego of the other, which in turn results in the two companies being liable for each other's obligations. But in general, the use of a dba, in and of itself, will not affect the liability shield.

Whether or not you will have any trademark rights for the dba depends on what the name actually is, and you need to consult a trademark lawyer to get the answer. But assuming the name is one that can be afforded trademark rights, using it as dba wll not hurt and may actually help you establish or strengthen those rights. You should also beware the possibility that the dba could infringe the trademark rights of someone else -- which is one of the reasons to consult a trademark attorney.

I am licensed to practice law only in Indiana. The answer to this question should not be considered legal advice but rather a discussion of the law in general. You are notmy client and I am not your attorney unless you and I both sign a legal services agreement.

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Posted

Depending on the nature of the different businesses you might want to house each in a distinct LLC to afford better safety of claims from one division affecting assets of the other. You can obtain a valid dba under state law (check your secretary of state for the process as sometimes same is accomplished at a county level and not state level depending on the type of entity seeking the dba) but may or may not be able to obtain a federal trademark which will be governed separately by the U.S.P.T.O. application process and the requirements thereunder.

My answer is not intended to be giving legal advice and this topic can be a complex area where the advice of a licensed attorney in your State should be obtained. Please click "helpful" or "best answer" if my answer added any value or add a "comment" if you have more info for me to help you get a better answer.

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Posted

Limited liability may not be afforded if not disclosed to whoever you deal with. Wisconsin courts have not provided a liability shield when the customer is not aware. There can never be any absolute guarantee of protection, but assuring that the LLC name is contained in all dba references may help, or as suggested one LLC can own another LLC that has that dba name with the LLC designation included.

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2 comments

Asker

Posted

How do companies such as Walmart get away with not putting Inc. on their store signs?

Michael Ray Smith

Michael Ray Smith

Posted

Thanks for pointing that out, Mark.

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