Tennessee LLC vs DBA — Understanding the Difference

An LLC and a Assumed Name (DBA) serve completely different purposes. An LLC creates a legal entity with liability protection. A DBA is simply a name registration — it provides zero liability protection. Here is when you need each.

For LLC formation details, see our formation guide.

Quick Comparison

Feature	Tennessee LLC	Assumed Name
Liability protection	Yes — personal assets shielded	None
Formation cost	$300	$20 (county level)
Ongoing cost	$300 (Annual Report)	Renewal varies
Creates legal entity	Yes	No
Own bank account	Yes (under LLC name)	No (under your personal name)
Sign contracts	As the entity	As yourself
Tax return	May require separate return	No separate return
Legal standing to sue	Yes (as entity)	No (sue as individual)

What Is a Assumed Name?

A Assumed Name — also called a "doing business as" name or trade name — registers an alternate operating name. In Tennessee:

• Filed at the undefined level
• Cost: $20 (county level)
• Simply registers that "John Smith" is doing business as "Smith Marketing"
• Does NOT create a separate legal entity
• Does NOT provide any liability protection
• Typically expires and must be renewed

What Is an LLC?

An LLC (Limited Liability Company) is a legal entity separate from its owners under the Tennessee Revised LLC Act:

• Filed with the Tennessee Secretary of State
• Cost: $300 (formation) + $300 (annual report)
• Creates a separate legal person that can own property, sign contracts, sue and be sued
• Provides limited liability — business debts stay with the business
• Requires ongoing compliance (annual/biennial filings, registered agent)

When You Need an LLC (Not Just a DBA)

• Your business has liability risk (most businesses do)
• You want to protect personal assets
• You need to sign contracts without personal exposure
• You want business credit separate from personal credit
• You plan to grow, hire, or take on investors

When a DBA Is Sufficient

• You already HAVE an LLC and want it to operate under an alternate name
• Extremely low-risk activity with no contracts or liability exposure
• Temporary project name for an existing entity

Using Both Together

Many businesses use BOTH:

1. Form an LLC (for liability protection and legal structure)
2. File a Assumed Name under the LLC (for a marketing-friendly name)

Example: "XYZ Holdings LLC" files a DBA to do business as "Fresh Start Bakery"

Cost Comparison (5-Year View)

DBA only:

• Initial: $20 (county level)
• 5-year total: ~$150 (varies with renewal requirements)
• Liability protection: $0

LLC:

• Initial: $300 + $99 (formation + registered agent)
• 5-year total: ~$2295 (includes annual filings and registered agent)
• Liability protection: Unlimited (protects all personal assets)

FAQ

Can a DBA protect me from lawsuits?

No. A DBA provides zero liability protection. If your business is sued, creditors can pursue your personal assets because you ARE the business — there is no separate entity.

Do I need a DBA if I have an LLC?

Only if you want to operate under a name different from your LLC's legal name. If your LLC name IS your operating name, no DBA is needed.

Can I convert a DBA to an LLC?

A DBA cannot be "converted" — you form a new LLC and optionally cancel the DBA or file the DBA under the LLC. See our conversion guide.

What about taxes?

A DBA does not change your tax situation at all — you still file as a sole proprietor. An LLC can choose its tax classification (disregarded entity, partnership, S-corp, or C-corp).

For the complete LLC formation process, see our formation guide.