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In the constantly changing realm of entrepreneurship, opting for a fictitious business name, also known as “Doing Business As” (DBA), can be a tactical decision. Whether an individual entrepreneur or overseeing a small business, filing a DBA enables you to establish your enterprise’s distinct brand.
This comprehensive guide will demystify the complexities of filing for a DBA, providing you with the knowledge and confidence to navigate the process seamlessly. Whether you’re undergoing rebranding, expanding your operations, or embarking on a fresh start, understanding how to file for a DBA is essential in establishing your unique business identity.
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How to File a DBA in 3 Easy Steps
1. Choose Your Location
Small businesses typically register their DBA (Doing Business As) in the same state or county where they operate as an LLC, corporation, partnership, or sole proprietorship. However, they can also register a DBA in a different location if it benefits their business.
2. Check Name Availability
Before registering a DBA (Doing Business As) name, conduct an online search to ensure its availability in the desired state or county. In most states, a DBA name must be unique and shouldn’t closely resemble any other registered DBA, LLC, or corporate name within that state or at the national level.
To determine if your chosen DBA name is already in use, consult the state’s agency responsible for business name registration (such as the secretary of state). They typically maintain a searchable database of currently used names within the state. It may be worth checking with the county as they might have their database.
By entering your desired DBA name into these databases, you can ascertain whether another business has already claimed that particular name in the state or county where you wish to register your entity.
3. Register Your DBA With the State
Typically, registering a DBA involves submitting the paperwork to the appropriate office. This could be the county clerk, state’s Department of Revenue, or secretary of state’s office, depending on where you’re located.
To begin this process, you may need to create an account if you haven’t done so already. If you have previously registered an LLC with the department, it’s possible that you already have an account. When filing for a DBA, there are specific details and documents you might be required to provide:
- The legal name of your business or your own name if you’re a sole proprietor
- Your federal Employer Identification Number (EIN), Social Security number (SSN), or state tax ID
- The desired name that you wish to register as a DBA
The option to file for a DBA through an online application is available in many cases. Once your application has been submitted and reviewed by the relevant authorities, they will notify you of its acceptance via mail or email. It usually takes about two weeks for them to decide regarding your application.
In most states and counties, there’s typically a nominal fee associated with filing a DBA. This fee can range from around $10 up to approximately $100.
Renewing your DBA registration will require periodic payments at regular intervals – often every one to three years.
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How to File a DBA – Buyer’s Guide
What Is a DBA?
The legal and consumer reference for your business is your DBA, which stands for Doing Business As. This term has several other names, including fictitious business names, assumed names, or trade names.
For sole proprietors who prefer not to use their personal names as their company’s name and for entrepreneurs and small business owners who want to choose a business name without forming a corporation, having a DBA is an ideal option.
Having a DBA means that you intend to use that particular name to identify yourself or your business in the eyes of the public.
However, it’s important to note that the legal name remains either your personal name if you operate as an unregistered sole proprietorship or the entity’s official designation if you’re operating as a corporation or Limited Liability Company. The DBA serves as the public-facing identity of your business.
What a DBA Is Not
A DBA doesn’t function as a legal business entity. Instead, it serves as an alternative name that your business can use in place of its official name. It’s essential to associate DBAs with a legitimate business entity.
Various examples of such entities include sole proprietorships (which aren’t considered legal entities), general partnerships, Limited Liability Companies (LLCs), for-profit and nonprofit corporations, limited partnerships (LPs), and Limited Liability Partnerships (LLPs).
When you establish a business entity like an LLC, S corp, C corp, or LLP, your business obtains limited liability protection. This means that if someone files a lawsuit against your company, your personal assets will remain safeguarded.
Sole proprietorships and general partnerships legally operate under the owner’s personal name and don’t possess any form of limited liability protection.
Although you may choose to operate under a DBA as either a sole proprietorship or general partnership, please note that this will not grant your business any level of limited liability protection.
After You File Your DBA
Once your DBA application has been approved and officially registered, you’re allowed to incorporate it into your business operations.
This includes the ability to open a bank account and draft contracts using the designated name as a representation of your business. You can sell your entire business or a portion of it, which would also include the DBA name as intellectual property.
It’s important to note that not all states have restrictions on using duplicate DBAs, and any protections in place generally only apply within state boundaries.
If you want enhanced protection against others using your trade name, you can choose to register it as a trademark with the United States Patent and Trademark Office (USPTO). This step isn’t mandatory for making the DBA official.
When to Use a DBA
Branding
If you own a business, whether it’s a sole proprietorship, partnership, LLC, or corporation, registering a doing business as a (DBA) name can simplify establishing or expanding your brand.
By registering a DBA, you can showcase and promote specific products or services in a distinctive manner if your business offers multiple offerings.
For those operating as sole proprietors or partnerships, selecting a DBA name for your company can enhance marketing efforts and attract an increased customer base. This makes it easier to effectively promote your business and increase its visibility in the market.
Privacy
Sole proprietorships and general partnerships must use their last names as their official business name.
If you’re a sole proprietor and wish to maintain privacy by not having your name listed in directories, online platforms, or public records, establish a DBA (Doing Business As) designation. This will help safeguard your personal information.
Setting Up Multiple Businesses Under One LLC
Entrepreneurs have the option to establish multiple businesses under a single LLC by creating DBAs for each individual venture.
Banking
Certain financial institutions may request that sole proprietors and general partnerships obtain a Doing Business As (DBA) to establish a business account. Accepting payments under the business name that customers are familiar with can enhance your credibility.
Domain Name Availability
It’s possible that your business name may not be obtainable as a domain name. Certain business proprietors opt to submit a DBA application that corresponds to their domain name.
Credibility
Sometimes, sole proprietors and general partnerships can enhance their credibility by using a business name that differs from their personal names.
How Much Does Registering a DBA Cost?
DBA filing fees can vary significantly depending on the state. These fees typically range between $5 and $50, with an average cost of around $20. However, in some states, the fee can go up to $150.
Choosing not to register a DBA can result in much higher costs. While the registration fee itself may seem insignificant, the penalties and additional fees for failing to register can amount to several thousand dollars. This is because registering a DBA is crucial for consumer protection purposes.
The state needs to know who to contact if there are any complaints from consumers. Although obtaining a business license usually takes care of this requirement, there are certain states that don’t mandate business licenses but still require DBAs to be registered.
There’s no specific limit on how many DBAs someone can register. However, it can become expensive if you decide to register multiple names.
Alabama, Arizona, Nebraska, Oklahoma, and Rhode Island are exceptions as they don’t require individuals operating under a DBA to register. It’s advisable always check with your local state authorities regarding specific requirements before assuming anything.
What Are the Advantages of Filing a DBA?
A DBA can accomplish several things for a business owner. DBAs can help rebrand a company. Using a DBA can be an effective method for a business to change its course without creating a new corporation or Limited Liability Company.
If an organization desires to rebrand itself without establishing a new legal entity, they can simply register a DBA instead. DBAs also serve as valuable tools for business owners who need to differentiate between multiple companies. Entrepreneurs with many businesses find DBAs particularly useful.
Sole proprietors benefit from using DBAs by allowing them to establish and promote their brand under a chosen name rather than relying on their personal name. This enables them to effectively target customers and generate awareness for their brand in ways that ultimately support their business objectives.
What Are the Disadvantages of Filing a DBA?
One could make the case that the expense associated with filing a DBA is seen as a drawback. It’s important to recognize that any measures taken to grow and structure your business will inevitably require financial investment. In light of this, the cost of obtaining a DBA can be viewed as a minor inconvenience.
It’s worth noting that many people mistakenly confuse DBAs with other business structures like LLCs. It should be clarified that only LLCs provide liability protection in the event of a lawsuit, and they also impact how your business earnings are taxed.
Understand that having a DBA doesn’t automatically grant trademark rights. In essence, any perceived disadvantages associated with having a DBA stem from misunderstandings about its intended purpose.
DBA Taxes
The taxation of a business is influenced by its organizational structure. The Internal Revenue Service (IRS) has established distinct filing obligations for each type of business structure.
Since a “Doing Business As” (DBA) isn’t considered a separate legal entity, there’s no requirement to file a tax return specifically for the DBA. Instead, any income or loss generated by the DBA is incorporated into the overall tax liability for the business.
If your DBA performs poorly and incurs financial losses, these figures will be factored into your overall tax liability for the entire business operation.
DBA EINs
An EIN, also known as an Employer Identification Number, functions similarly to a Social Security Number for businesses.
The Internal Revenue Service (IRS) uses EINs to monitor a business’s tax reporting activities. To comply with government regulations, any business that has employees is required to apply for an EIN.
Since a DBA (doing business as) isn’t considered its own separate legal entity, there’s no specific EIN assigned solely to a DBA. Instead, the business structure that the DBA operates under will have an associated EIN if it employs individuals.
How to File a DBA – Frequently Asked Questions
Can I File a DBA Online?
Certainly! In most places, submit an application or renew a Doing Business As (DBA) registration online via the official website of the relevant office.
Can I Use More Than One DBA?
A single company can utilize multiple DBAs without any restriction on the number.
How Do I Set up a DBA for a Rental Property?
Having a rental property in your name and using a DBA doesn’t provide any form of protection. The optimal solution is to establish an LLC to safeguard your personal assets if any problems arise with the rental property. Regardless, it’s advisable to seek legal counsel for proper guidance.
When Would Getting a DBA Versus a Legal Name Change Be Good?
Opting for a DBA is frequently more advantageous than altering the legal name of your business. If you desire to reposition your company or shift focus to a different sector, obtaining a DBA involves less complexity compared to undergoing a formal name change process.
Is My DBA Protected From Being Used in Other Places?
In certain states, there are laws in place that restrict the use of DBAs that closely resemble existing ones. However, these laws differ from state to state. It’s feasible to obtain a trademark for a DBA, which would provide more robust protection across different states.
Bottom Line on How to File a DBA
Using a DBA or an assumed name allows you to conduct business without establishing a separate legal entity. The registration process is simple and affordable, with the option of online registration in many states.
About the author
Dr. Gabriel O'Neill, Esq., a distinguished legal scholar with a business law degree and a Doctor of Juridical Science, is a leading expert in business registration and diverse business departments. Renowned for his academic excellence and practical insights, Dr. O'Neill guides businesses through legal complexities, offering invaluable expertise in compliance, corporate governance, and registration processes.
As an accomplished author, his forthcoming book is anticipated to be a comprehensive guide for navigating the dynamic intersection of law and business, providing clarity and practical wisdom for entrepreneurs and legal professionals alike. With a commitment to legal excellence, Dr. Gabriel O'Neill, Esq., is a trusted authority dedicated to empowering businesses within the ever-evolving legal landscape.