Expert: John Varghese - 5/18/2011

Question
Hi John
Myself and two friends started a Management company and filed for it to be an S-Corps.  The purpose of the company is to open a restaurant as a DBA.  We did this with the intent to have more than one restaurant with in the next few years, all of which will be DBA's under the Management company.
My question is two fold, first do myself and partners take our salary from the the management corps, and also, do we have to have a separate bank account for the DBA to pay the couple of employees from it, if so do those accounts get linked somehow for tax purposes.

Thanks,
Ren

Answer
Hi Ren,

To answer the questions cryptically:
1. It is possible to take the salary from the DBA account.
2. It is your option whether to take separate bank account for DBA or to operate with bank account for the company.
3. DBA is a process of convenience. You will need proof of licensure before you open a bank account with a DBA designation.Once you are allowed to open separate DBA accounts for the restaurant chain,the DBA names are shown only as a front. You will have to produce the articles of association of the S corps when you are opening each of these bank accounts. The bank accounts are there for linked from the beginning and they will remain definitely linked for various regulatory purposes including taxation.

Regards

John Varghese