As a DBA (doing business as) isn’t a type of business structure, but rather an assumed or fictitious name used by owners and businesses, you would need an already established business before filing for a DBA. As such, all of the necessary licenses and permits would already have been acquired.
A DBA simply refers to the name under which a business operates which isn’t the same as their legal name. This is only legal as long as it is formally registered with the relevant authorities. This registration is necessary should the business operate under a name different to the official one listed when the business was formed. For a sole proprietorship or partnership, should you wish to use a name separate to your own or your partners, then a DBA is essential.
It is often incorrectly interpreted that a DBA is a type of business structure similar to an LLC, but this is incorrect. The filing of a DBA is not the formation of a formal structure and has no personal liability protection. Summarily, should an entrepreneur start a business and file for a DBA, s/he is a sole proprietor who wishes to operate under a name different to their own.
Why should I file for a DBA?
There are two primary reasons many people decide to file for a DBA. One is if the official business hopes to expand into novel products or brands. The second is if it is an unregistered business, e.g. a sole proprietorship or partnership, wants to start conducting business using a different name. However, this should really only be done if the business has a small chance of profit and risk.
One significant benefit for sole proprietorships and partnerships is that a DBA provides many of the advantages of an LLC, except for personal liability protection. As such, the business has better branding, but also increased privacy seeing as the owner doesn’t have to operate with the public using his/her own surname. The most significant advantage remains the access to business banking and the ability to process payments in the business’s name as this grows confidence in the business and established reliability. In the case of LLCs and Corporations, DBAs give the business the ability to establish numerous brands or lines of business in the name of one LLC or corporation.
What is the process for filing a DBA?
The process is different in each state, but in most states, you will have to file with the secretary of state or the county clerk. This has a price ranging from $10 – $100, and some states even require a publication notice in a local newspaper. In essence, there are three main steps that need to be followed when filing for a DBA.
1. Choose your state.
The procedure for filing for a DBA ranges from state to state so make sure to check what laws apply to you. Some states require you to register your DBA with the state government while others necessitate filing with the county or city government. It’s important to note that some states will ask you to file on multiple levels of government.
2. Make sure your name is unique.
Your DBA has to be unlike any other. Not only can it be the same, it can’t be too similar to any other business. Once more, state guidelines vary so it’s necessary to check what rules apply to you. In order to make sure that your name is indeed unique, check the official trademark database, as sustained by the United States Patent and Trademark Office.
3. Register your DBA
You are required to file your DBA with the state or county/city clerk’s office, in accordance with where your business is located and what the business structure is.
TRUiC offers more information on DBAs in the US and how you can file for one depending on which state you’re in.