What is a “DBA” and why would your business need to file for one?
DBA is the acronym for “Doing Business As.” Other names for a DBA include “fictitious name,” “trade name,” and “assumed business name.” You must file for a DBA when you want to conduct business using a name other than the one you registered your business under.
What’s the Purpose of a DBA?
A DBA ensures that there’s a public record of the individual or company behind a business name. It helps protect customers from deceitful entrepreneurs who might try to hide behind their fictitious name because of a poor reputation or a history of conducting business unscrupulously. Upon filing a DBA, a business usually must print an announcement in one or more general distribution local newspapers (and sometimes a legal newspaper) to disclose the primary business name and owner’s identity.
When Does a Sole Proprietor or General Partnership Need a DBA?
If you operate your business as a sole proprietor or general partnership, you will need to file a DBA if you plan to use a business name that doesn’t include your own first and last name. For example, Laura Martin wouldn’t need a DBA if she’s advertising her company as “Laura Martin’s Virtual Assistant Services.” But if she would want to go by the name of “Laura’s Virtual Assistant Services” or “Get It Done Virtual Assistant Services,” she would need to have her fictitious name approved as a DBA by the state where she operates her company.
If Your Business Is an LLC or a Corporation, Do You Need a DBA?
When you form an LLC or incorporate your business, you automatically accomplish registering your company’s name. Your registered business name may be a fictitious name, but it won’t require a DBA. As an LLC or corporation, your business is a recognized legal entity, so no other business entities providing similar products and services will be able to use your name within your state of registration.
Under certain circumstances, however, your LLC or corporation may need to file a DBA. For example, if you registered your business under one name but wish to market it under a different name, you must file a DBA. Using Laura Martin’s example again, say Laura forms her LLC as “Martin’s Virtual Assistant Services” but wants to operate it under a name that’s more enticing to prospective customers. She could file “Get It Done Virtual Assistant Services” as a DBA.
What Are the Advantages of a DBA?
For starters, it will keep your business legally compliant! And that’s important for staying in good standing with the state and avoiding unnecessary fees and penalties. Filing a DBA will also allow you to open a bank account in your fictitious name and receive payments in that name from customers. Before processing the paperwork to open your bank account, most financial institutions will want to see a copy of your filed DBA.
Another benefit of a DBA is you can use a creative business name and still enjoy the simplicity and cost-effectiveness of running your business as a sole proprietor or partnership. It’s an option that doesn’t require the formation paperwork and business registration fees associated with starting an LLC or a corporation.
I must stress, however, that forming an LLC or corporation gives your business name protection at the state level from other LLCs and corporations trying to use your name. Having a DBA might adequately discourage other businesses from using your name, but a court may not give you exclusive rights. To more fully protect your DBA name, consider registering for a trademark.
How Do You Register a DBA?
In most states, you can file for DBAs through the Secretary of State office (or another state agency). Some areas require that you register your DBA with your county. Costs are minimal to submit the filing, usually under $100.
Before filing for your DBA, check to make sure no one is already using the name you want to use. You’ll waste your time and money if you try to file a name that’s already claimed by another business.
Also, do not use a fictitious name for your business until you know your DBA application has been approved. Although some states and counties provide some leniency, allowing you to use the name before it’s processed, some will penalize you if you use it before it’s official.
Get Your DBA and Get Down to Business
As with any business decision that has legal implications, I recommend that you talk with an attorney before moving forward with filing a DBA. After that, research the rules for your state.
The Small Business Administration’s (SBA) website is a helpful resource, or consider asking an online legal document filing service for assistance to make sure your DBA is submitted correctly. DBA (fictitious name registration) forms tend to be simple and straightforward, but you’ll still want to complete them accurately.