DBA stands for “doing business as.” It’s also called an assumed name, trade name, or fictitious name. Basically, it’s a name for a business that isn’t your own legal name as the business owner.
A DBA is not
Registering a trademark for a business name and registering as a business entity (sole proprietorship, partnership, LLC, corporation) are separate processes.
There are mainly only two reasons why you would need a DBA:
Not all businesses need DBAs. Whether or not you need one depends on
Sole proprietorships and partnerships are the most likely businesses to need a DBA.
If you're a sole proprietorship or general partnership and want to operate under a name that isn’t your full legal name or your business partner’s full legal name, you’ll need to file a DBA.
That is because sole proprietorships and general partnerships don't need to file business entity paperwork beyond the business licenses and permits required to operate in their state.
Filing a DBA for one of these businesses makes the small business and the small business owner two separate legal entities.
Franchises don’t necessarily need DBAs, but they often do to establish themselves locally. For example, if you bought a McDonald’s franchise, you could form it under an LLC or corporation, but make your DBA McDonald’s so the state knows that you’re doing business as the franchise and not a completely new business.
S corporations, C corporations, limited partnerships, and limited liability companies (LLCs) typically don’t need to file a “doing business as”name. All of these businesses require entity registration
However, registering a DBA name allows these business entities to do business as a name other than their incorporated name. Corporations and LLCs often do this when they want an alternate name for a new line of their business. Filing a DBA name allows them to do this without forming a whole new business just to operate under a different name.
If you register a DBA without] forming a legal entity first, your state will automatically recognize your business as a sole proprietorship.
As you can see now, filing a DBA isn’t always necessary. Here are some of the benefits of filing a DBA name for your new business.
It’s a good idea for any entrepreneur or startup to open a business bank account separate from the owner’s personal account. This separation will
Setting up a business bank account or credit card requires an employer identification number (EIN) from the IRS. This can be a problem for sole proprietorships and general partnerships since they’re not required to register with the state. Filing a DBA is another way to get an EIN.
A DBA doesn't provide you with legal protections in itself, but it does further separate you from your business. If your business gets sued, a DBA can protect your personal assets because it’s proof that you as a person and your business are separate legal entities.
It’s also common for clients and small business lenders to require some kind of legal documents before they do business with a company. If you’re not incorporated, a DBA is your best bet for that.
A name is the first impression of your brand that potential customers get. Ideally, the name of your company should give people an idea of what you offer. John Smith as a sole proprietor business name doesn’t tell the people anything or catch their attention. If you’re having trouble coming up with a name to file as a DBA, a business name generator can kickstart your brainstorming.
If you’re hoping to expand your business into other ventures in the future, registering a new DBA for each new leg of your business lets you do so without forming a separate business entity for each one. For example, if the name of your company is Allison’s Cosmetics and you expand to skincare, you can file a separate DBA name under your current business for Allison’s Skincare.
Filing a DBA name lets you do business under your company's domain name. This is helpful if your company name isn’t available as a domain name, or for expanding into ecommerce.
Filing a DBA name is the easiest, least expensive way for a sole proprietorship to register their business name and establish their business as an entity separate from themselves.
Keeping your work life and personal life separate is good for both. Filing a DBA name makes it easier to do that, even if you’re a sole proprietor. When you and your business are separate entities, you can promote your business without compromising your privacy and use your personal name in fewer interactions.
Businesses affiliated with DBAs bear the same legal and financial liabilities incurred by the name on a DBA registration. For the purposes of filing taxes and other official matters, any DBA business must use their original company name as registered with the state in which the founding business was established.
It is possible to hold and use multiple DBA registrations under a single corporate entity, but all of the DBA names will refer to the parent company with respect to any lawsuits or other matters related to legal or financial liability.
Setting up a DBA name is relatively easy and inexpensive. Just follow these steps to get started:
Before you file your DBA name, make sure someone else isn’t already using it. You can do that by conducting a business entity search on the Secretary of State's website.
Naming requirements vary from state to state. Two common ones are not being allowed to use words associated with banks or government agencies.
Some states require DBA name applicants to operate under the name they’re applying for before registering it. You can show proof of operation with business cards, labels, flyers, et cetera.
You can usually fill out a form online or via mail to register with your secretary of state or local government agency.
Now that you know how to file a DBA, let's explore a handful of need-to-know tips about DBAs:
No, a DBA is not a legal entity. If you don’t register as a legal entity before you file a DBA, the state will assume that your business is a sole proprietorship.
Check with your state and local government to determine if you need to register a DBA if your business is registered at the state level. You can often find this information on the Secretary of State's website.
When a DBA registration expires depends on the state. Businesses in California have to renew every five years. Businesses in Texas have to renew every 10 years. In New York they don’t expire. In some states a DBA registration is good for five years before it requires extension or renewal. Be sure to stay on top of your expiration date when you register.
If you no longer want to use your DBA, canceling the registration is the best way to avoid confusion and legal issues. Here are the steps you must take to cancel a DBA:
If your DBA is close to expiring, you could also simply let it expire.
DBA costs vary by state, county, city and business structure. Filing fees can range from $10 to $100.
Your business structure will determine how you have to file taxes for your business. Sole proprietorships file taxes annually. Partnerships, LLCs and corporations submit annual tax returns to the IRS but if they owe taxes at the end of the year they may also have to pay quarterly taxes. Businesses must also submit tax returns to their state, and some states may require quarterly or annual tax returns.
A single company can use as many DBAs as it wants. Businesses often use different DBAs for different lines of products or services. For example, Fenty Beauty and Savage by Fenty are the same company, but they do business under different names because they sell different products.
Registering a DBA and forming an LLC have different purposes and different processes. A “Doing Business As” designation is just the official documentation of a company operating under a different name than the owner. An LLC is a business structure that protects the business owners’ assets if someone sues their business.
No, A DBA does not offer any legal protections for a business or intellectual property on its own. A DBA is the official adoption of a fictitious name or trade name
Sole proprietorships or partnerships are among the businesses most likely to file for a DBA. This is mostly because the names of those types of businesses default to the legal names of the business owners unless otherwise specified in a DBA filing.
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