• Entity, name and EIN are three different things
  • Is the business separate from you?

A business entity is the legal form your business takes: a sole proprietorship, a partnership, an LLC or a corporation. It's a different thing from the name customers see and from the tax number on your forms, and this page keeps the three apart.

In the US, the IRS says (page last reviewed or updated October 3, 2026): "The most common forms of business are the sole proprietorship, partnership, corporation, and S corporation." It adds: "Legal and tax considerations enter into selecting a business structure."

Entity, name and EIN are three different things

  • The entity (structure). The SBA says (checked October 31, 2026): "You’ll need to choose a business structure before you register your business with the state."
  • The name. The SBA says a DBA "lets you conduct business under a different identity from your own personal name or your formal business entity name." Its example: "For example, a small business owner could use Springfield Electronic Accessories for their entity name but use TechBuddy for their DBA."
  • The tax number (EIN). The IRS says (page last reviewed or updated October 16, 2026): "Businesses, organizations and some retirement trusts need an EIN to manage their taxes." It also says: "If you don’t form your entity with the state first, your EIN application may be delayed."

So a business can have one entity, trade under a different name, and use an EIN on its tax forms. Each is set up in a different place.

Is the business separate from you?

That depends on the entity. For a sole proprietorship, the SBA says (checked October 31, 2026) "Sole proprietorships do not produce a separate business entity." and "This means your business assets and liabilities are not separate from your personal assets and liabilities." For an LLC, it says "LLCs protect you from personal liability in most instances". How much separation you actually get depends on your state and your situation, so ask a lawyer before you rely on it.

For the detail on each type, see the guides on sole proprietorships and LLCs. For choosing between them, see How to Choose a Business Structure.

Worked example: keeping the entity's money apart

Sample figures: a small design business takes in 60,000.00 in a year and pays 18,000.00 of business costs from its business account, so its profit is 60,000.00 − 18,000.00 = 42,000.00. During the year the owner moves 30,000.00 to a personal account. That transfer doesn't change the business's profit: the books still show 42,000.00, and 42,000.00 − 30,000.00 = 12,000.00 stays in the business account. Keep the two accounts apart, so you can show the 42,000.00 from the business's records alone. How the profit is taxed depends on the entity; ask an accountant.

Where Billed fits

Whatever the entity, your invoices should carry the business details you trade under. Billed's invoice software page says "Choose an invoice template, add your logo and business details, and save the products and services you sell so you can pull them into an invoice instead of retyping them."

When this guide isn't for you

If you're already comparing structures for a specific business, go straight to the structure guide above and talk to a lawyer or an accountant. This page explains the terms; it doesn't tell you which entity to form.

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Frequently Asked Questions

Is a business name the same as a business entity?

No. The SBA's own example (checked October 31, 2026) is an owner who uses "Springfield Electronic Accessories for their entity name but use TechBuddy for their DBA." The entity is the legal form; a DBA is a name you trade under.

Do I need an EIN for my business?

The IRS says (page last reviewed or updated October 16, 2026): "Businesses, organizations and some retirement trusts need an EIN to manage their taxes." Ask an accountant whether your business needs one.

Which business entity should I choose?

That depends on your liability, taxes and plans for the business. The structure guide compares the common types, and a lawyer or an accountant can advise on your situation.

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