What is DBA, you’re wondering?
Many entrepreneurs decide to do business under a different name. The name they choose to do business with is not the same as their personal name. It is a made-up name that allows entrepreneurs to conduct very real business, such as collecting checks and payments. This is a “doing business as” name, otherwise known as a DBA.
It might sound like a strange idea for an entrepreneur to want a DBA. If you already have an existing, registered business name with the state, why would there be a need for a secondary name?
The questions only begin to escalate from here.
So, you’ve decided you want a doing business as name. How does a DBA work? What would filing for a DBA do to benefit a business? If the name of the business is considered to be a trademark, then what is a DBA in relation to that mark? All aspects of DBA formation branch off into the following categories.
- Defining DBA
- DBA benefits
- Entities that require DBAs
- DBAs versus trademarks
- DBA formation
- Post-DBA registration
What is a DBA, and how does this asset work? Let’s address the answers to these questions as thoroughly as possible.
Related: How to start a business — The checklist
What is a DBA?
A doing business as name goes by many names.
Sometimes it is called a DBA or fictitious name. Other times it is known as a trade or assumed name. These names are all the same in defining a DBA.
It allows your company to legally conduct business under a different, fictitious name.
You would be able to use a DBA instead of your own personal name or the corporate name of your business on file with the Secretary of State.
Does a DBA still sound a bit confusing? Let’s clear up its definition with an example.
DBA example: “Deborah Sweeney’s Cake Shop”
I’ll use myself as an example. My personal name is Deborah Sweeney. I am an entrepreneur who wants to open up a bakery called “Deborah Sweeney’s Cake Shop.” I wouldn’t need to file for a DBA if I called the bakery “Deborah Sweeney.” That is because the name of the business isn’t fictitious. It’s my actual name.
However, I added in a few extra words for the name of my business. It is now more clear to consumers what my business offers. The additional words “cake shop” no longer identify me as the business’s owner, even though my full name is still visible. As such, I would need to file for a DBA.
What if I called my bakery “Sweeney’s Cake Shop” instead? Would I need a DBA? My name would still be in the business name, as a slightly shortened version. I would need to obtain a DBA because the short name does not fully identify me as its owner.
DBA benefits
You have an understanding of what a DBA is and how it works on behalf of your business. Why else would you need to register for a DBA?
Opening a business bank account
Most banks require a certified copy of your DBA when creating a business bank account.
Without a DBA, you would not be able to issue or receive checks under the assumed name of the business.
The business owner cannot use their personal account for transactions pertaining to the business either.
Marketing and advertising purposes
You may now begin publicly advertising and marketing the business under a name that differs from your personal or corporate name.
Professionalism
Now that you have established a separate business identity, you are able to present the business in a professional light to consumers.
Editor’s note: Another way to look more professional when you start a business? Get a business-class email address.
Legal entities that should obtain a DBA
Should certain legal structures, like sole proprietorships or limited liability companies, set up a DBA? The answer is DBA registration is necessary for almost every entity that decides to do business under a name that differs from the company’s existing name.
Let’s take a look at how setting up a DBA works for various legal entities.
Sole proprietor
An entrepreneur calls the shots under a sole proprietorship. The owner is in complete control of the business, which is a unique entity since it does not offer liability protection found in most legal entities.
If sole proprietors wish to conduct business under a different name, they need to file and register for a DBA.
This would allow them to receive and sign for checks made out to that business. Entrepreneurs who decide they want the business to operate solely under their personal name do not need to register for a DBA.
LLCs and corporations
Once an entrepreneur incorporates as an LLC or corporation, the organization receives liability protection. This separates the entity’s professional and personal assets, ensuring personal assets like houses and cars are not impacted by unforeseen circumstances.
What do you do if you have incorporated as an LLC or corporation, but want to conduct business under a name that differs from the one filed on your LLC or corporation paperwork?
The DBA would be filed in the county or state of the registered office and principal address of the business location. Filing for a DBA ensures that the LLC or corporation may do business under another name without needing to form a new legal entity.
The LLC or corporation also saves time and money by filing for a DBA, as there’s no need to file extra documents and pay additional filing fees for a new organization.
Related: Legal issues for startups
DBA vs. trademark: What’s the difference?
It’s not uncommon for an entrepreneur to confuse a trademark with a DBA. After all, both are names that help protect small businesses. What’s the difference between the two?
As mentioned earlier, a DBA is an assumed name. A doing business as name allows your company to conduct business, but under a fictitious name. You can claim your business’s name with a DBA and make sure no other business uses it.
However, that is only applicable at the state level. Another business in a different state can register a DBA that is the same name as your business. The only thing preventing them from doing this is if another business in their state has already claimed that particular DBA.
Registering for a trademark differs significantly from registering for a DBA.
Trademarks protect unique words, slogans, logos and designs that identify your business and its offerings to the world. An entrepreneur who files for a trademark has exclusive rights to said mark. This protects the trademark from any forms of plagiarism from competitors attempting to copycat your business.
Registering a trademark is slightly more time-consuming in terms of paperwork and filing fees, but it does provide peace of mind in knowing your unique assets have proper protection.
How to file for a DBA
Now that you have a thorough understanding of what a DBA is, how it works, and what differentiates it from a trademark, it’s time to file for a DBA.
What kind of information should you have on hand for the process? This may vary from state to state, so it is recommended you reach out to your designated Secretary of State first. Researching their website will help you better determine what all is needed to register for a DBA.
The website may also provide answers to questions such as where to file and what forms to use for a DBA.
There are a few items you should have on hand when filing for a DBA, which are outlined below.
A doing business as name
Much like a trademark, a name search must be conducted beforehand. This ensures that the fictitious name is still available and you may claim it in your designated state.
Related: Collection of resources for naming a business
Application information
Your DBA form will require specific pieces of information. These include the name of the applicant, the date of the filing, the DBA name for the business, and the address of the business. The DBA must also be filed in the state or county of the business’s principal address location.
Application fees
Generally, these tend to be inexpensive.
Some entrepreneurs file for DBAs on their own. Others choose to work with business filing experts at a third party online legal filing service. These individuals help file the DBA application on the entrepreneur’s behalf, and check the status on when the DBA is fully registered. Working with a third party helps save time, and allows entrepreneurs to ask filing experts any questions they may have about the process.
If you are unsure of whether it is best for you to work with a third party or file for a DBA on your own, consider consulting a legal professional for advice. Every entrepreneur’s situation is different when it comes to their business, and it is for the best that you do not attempt to DIY the process if you don’t understand it.
What happens after DBA registration?
After applying for a DBA, certain states may require you to publish information about the DBA. Why must this be done?
Publishing this information puts a notice of the filing on record and provides proof of your identity.
This information may be published in at least one local newspaper to give proper notice to other local business owners. Typically, it is required to be published within four weeks upon receiving the DBA notice.
After publishing, you are officially on public record. This better allows consumers to discover who the owner is behind the (fictitious) name of the business.
However, it is still advised that you get in touch with the Secretary of State. This allows you to better understand what the requirements are for publishing information about the DBA, and find out if there’s anything else you need to do post-DBA registration.
Now that you have your DBA, place the document in a safe place and enjoy the peace of mind that comes with doing business under a different name.
What if my state does not require a DBA?
We walked through the necessary steps required to obtain a DBA, but there is a certain question that lingers for new and established business owners. Do entrepreneurs need to file for a DBA, even if it’s not a state requirement?
The answer is yes.
It is best advised to file for a DBA (and conduct its name search) sooner than later for the business. Even a budding side hustle on its way to taking off can utilize the protection of a doing business as name!
DBAs are not required in every state. Some states do not require doing business as name registration. However, it’s still smart to register for the business name on a voluntary basis.
It helps protect businesses from fraud, enables companies to open up business bank accounts, and allows them to establish a professional presence with consumers. As for the possibility of conducting business under a name that is different from your existing one, it’s important that you never say never to the possibility of this occurrence.
An entrepreneur may wait, of course, and consult with a legal professional before moving forward. Once they have done this, however, it is still advised that they file for a DBA early on. This will ensure that the available DBA in your state is yours.
You may continue to build up your brand in the meantime, but it’s truly for the best to file for a DBA sooner rather than later. The sooner you are able to register for a DBA, the more advantages you have to properly identify the business and its brand with consumers.
The above content should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.
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