Just like everybody needs a name to be identified with, businesses need a name by which you can identify them apart from using their products or philosophy. When it comes to a sole proprietorship or partnership business, the legal name they usually bear is the name of the business owner or owners. In the case of a corporation, limited liability company (LLC) or other statutory entity, the legal name is the one on its formation document (e.g., its articles of incorporation or articles of organization).
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What is a DBA?
DBA stands for “doing business as.” A DBA is the name your business is referred to both legally and by consumers. A DBA can also be known or represented in other ways such as; fictitious business name, assumed name or trade name. A DBA is ideal for sole proprietors who prefer not to use their own names as their company name and small business owners who want to pick their own business name without becoming a corporation.
Having a DBA essentially means that the person or business entity intends to use that name to identify itself to the public. The legal name remains the person’s name (if an unregistered sole proprietorship) or the business entity (if a corporation or a limited liability company), but the name that the public knows the business as is the DBA name.
This essentially means that a company can have two names, the legal name and the business name or DBA. Choosing a business name to trade is part of the startup process of registering your business. While it isn’t necessary to register and choose a name immediately, some may choose to file a Doing-Business-As (DBA) so that they can;
- Legally trade under a business name different from the owner’s or registered business’s
- Declare legitimacy and trust
- Protect a desired future trading name
To file for a DBA, you must fill out an application through a local, state or county agency. In some cases, you also have to announce your new company’s name in a local newspaper.
How to File A DBA
The process of filing a DBA tends to vary from state-to-state, even county-to-county. This is because each state and county in the United States tend have separate requirements. To file your DBA, you need to fill out specific paperwork and pay a filing fee.
This is usually a general requirement. You can do all of this with a local or county agency, but some states require you to file with a state agency instead of or in addition to the county. Some states and counties might also require you to publish it in a local newspaper, giving the public notice that you have filed a DBA.
For example, in New York, sole proprietorships and general partnerships must file a business certificate listing their assumed names with the county clerk’s offices. Corporations, LLCs, LLPs and limited partnerships, on the other hand, must file assumed names with the New York Department of State. In contrast, the state of Kansas has no requirements for businesses to register fictitious names.
Once you’ve chosen your business’s fictitious name and registered it locally, you might want to consider filing for a trademark with the U.S. Patent and Trademark Office to protect your intellectual property. Trademarks protect words, names, symbols, sounds or colors that distinguish your goods and services.
If the paperwork and filing process seems overwhelming, you can contract a business lawyer to complete all the necessary filings to secure your DBA name. Reputable business lawyers are listed by the American Bar Association, and you can use any of them.
The Small Business Administration is a great resource for those who aren’t sure if they need to register a DBA, it will give you the correct information. But if you plan on using a business name that differs from your given name or your business partner’s name, you’ll need to register one.
Other reasons you may have to register a DBA is if your bank requires it to open a business account, if a prospective client requires a DBA to award your company a job, if your company is entering a new business area not reflected in your current name, or if your company operates more than one business or website. It’s important to note, though, that a registered DBA doesn’t constitute a business in itself.
How Much Does It Cost to Register a DBA?
The fee usually varies by state, but it is typically between $5 and $50, although it can be up to $100 in some states. While the cost to register is insignificant, the penalties and fees for failing to register can be several thousand dollars. This is a function of consumer protection.
The state wants to know who to contact when a consumer complains. While this is usually handled when obtaining a business license, some states do not require business licenses. Almost every state requires DBAs to be registered. While there’s no numerical limit to how many a person can register, it can get expensive if you register multiple names.
Alabama, Arizona, Nebraska, Oklahoma and Rhode Island are the only states that don’t require everyone operating under a DBA to register, but it’s best to check with your state about the local requirements.
Important Things to Consider When Filing a DBA
To do business under a DBA, you must complete and file required DBA forms and pay a filing fee in the state(s) where you want to operate your business. Each state has its own forms and requirements, so be sure to check the forms and requirements carefully for your state. Here are important things you should consider when filing a DBA:
- Your legal business entity must be in good standing (you can get a certificate from your state or registration that shows this).
- You may need to get a money order or cashier’s check to register a DBA. Not all states accept credit cards.
- Your DBA cannot claim you have a corporation or LLC unless you actual business entity is a corporation or LLC.
- Many states require that you notify people that you’ve registered a DBA by posting a notice with a local newspaper or publication.
- Although you can identify your business in your registration documents under your Social Security Number, you should get an EIN (Employer Identification Number, also known as a Federal Tax ID Number) instead and use the EIN instead of your Social Security Number.
- You may not operate under an assumed name unless you’ve registered that name as a DBA name in the state in which you’re operating.
- DBA registrations don’t last forever. In many states, they are for five years and must be renewed before they expire. Check the specific state requirements carefully.
- Most states require that you amend your DBA filing if your legal business information changes. This includes your business address, legal name, change in officers, etc.
Documents and Requirements
Registering a DBA or a trade name is a very simple process and often one of the first steps taken after a business has been formed. The following information is usually required:
- DBA or trade name
- Date when company was formed
- Type of business conducted, i.e. what goods or services are offered by the business
- Name of individual or legal entity that owns the business
- Signature of notary public to authenticate the document
A trade name registration is usually good for five years, and can easily be renewed after that time. Check with your Secretary of State’s Office for specific requirements. Depending upon the state where the business is located, a DBA registration can have other names, such as:
- Assumed Name Statement
- Assumed Business Name Certificate
- Business License Application
- Fictitious Business Name Statement
Preparing the Paperwork for your DBA Registration
When you are seeking to file a DBA, you may find that your state places specific restrictions on the type of name you can use. You will also need to determine if the name is already in use by another company. However, if your industry is a different one from the other company using the name you desire, it may still be possible to use it.
A DBA also requires renewal every few years, but there is no charge associated with renewal. After filing the DBA, it will undergo a review process. Once approved, you will receive documentation informing you of any final instructions you may need to follow before the procedure is complete. One you receive notification that that the procedure is complete, your DBA is ready for use.