Separating buy- and sell-side of your business


  • Hi,
    In the program, Seth explains how it is a good idea to use different names for your entity depending on whether you are acting as the buying or as the selling part of your business. The program describes how to use DBAs for that matter (e.g., you buy a property under the legal name of your business and then market it under your DBA). I realize, of course, that in all legal documents (such as in a purchase agreement) you need to use the full legal name of your business.

    Clearly separating buy and sell side of your business certainly has the advantage of possibly avoiding a confrontation with a seller who, after having sold you the property for cheap, finds out for how much you are marketing the property.

    Using DBAs does seem like a valid way of avoiding situations like that. My question, however, is: Do you file your DBA in every state that you do business in? I have done some research online and it seems that the legalities if and how you have to register a DBA differ not only from state to state but even from county to county. In some states you need to file your DBA both with the state and with the county. When you do business in several states (and use an LLC or a corporation), things already get complicated (and, depending on how many states you do business in, even expensive) with all the foreign registration filing, annual reports and registered agents that you need. I am afraid that if I use a DBA without proper registration, I might even expose myself to personal liability.

    I am not looking for legal advice (nor am I giving it) but for some practical advice of how to handle that. Setting up two different websites seems like the easy part but making sure you are compliant in all jurisdictions you do business in can be challenging. Any practical advice would be greatly appreciated.

    Johannes

  • LIM

    Johannes Pieper - I've got one LLC for my land business, filed in one state (the state where my LLC is registered). Along with that, I have one dba, which was registered alongside that LLC at the state level.

    If you were to register a new LLC in another state, and if you wanted a new dba associated with that LLC, then you'd have to register the dba in that new state alongside your new LLC... but if you're just sticking with one LLC to handle everything, everywhere, then you don't need to go crazy registering dbas all over the place.

    Now, when you hear people talking about registering a dba with the county, that's something different, and that's not what I'm referring to in the program. In fact, I don't even mention it because it isn't necessary.

    Assuming you're using an LLC at all, just get it LLC registered with the state, and get your dba registered alongside that LLC (again, this is only at the state level, don't worry about the county).

    If you go through this service for your LLC and use this service to handle your dba, you should be all set.

    Disclaimer: I'm not an attorney, so don't take any of my advice above until you run all of this past your own legal representative and they agree with what I'm saying. 😉


  • This is why I prefer Investment banking to other form of business. sell side/buy side means something completely different in the investment banking M&A context.

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