Do you need a DBA for your business? It is a common question for evolving and growing businesses. Let’s explore what a DBA is, what benefits it offers, and discuss some situations when you might need to file a DBA.
What is a DBA?
A DBA is a fictitious business name, trade name, or assumed business name. This DBA, which is short for Doing Business As, is a filing that lets the public know you’re the true owner of your business. In the United States, a DBA lets the public know who the real owner of a business is. The DBA is also called a fictitious business name or assumed business name. It got its origins as a form of consumer protection, so dishonest business owners can’t try to avoid legal trouble by operating under a different name. When someone files a DBA, it’s normally circulated in some kind of print newspaper (maybe you’ve noticed all those “fictitious business name” entries in the local classifieds). It lets the community know exactly what people are behind a business.
Learn more: What is a DBA?
A primary benefit of a DBA is that it keeps you in compliance with the law. Here are some examples:
For sole proprietors who want to avoid complexity and expense, a DBA lets them use a business name without creating a formal corporation or LLC. Filing a DBA also gives the sole proprietor the freedom to use a business name that will help them market their products or services while establishing a separate professional business identity. Realize, however, that while forming an LLC or corporation protects your business name at the state level, a DBA won’t protect your business name from being used by others, because that would require trademark protection. Additionally, if you’re a sole proprietor, you will need to file a DBA to open a bank account and receive payments in the name of your business from your customers. Most banks will ask for a copy of your filed DBA before they’ll open your account, so you’ll want to file sooner rather than later!
An LLC or corporation may operate multiple businesses without having to create separate legal entities for each business when they have DBAs. For instance, if Jane Doe plans to open several different boutique shops, restaurants, or websites, she might want to set up one corporation with a relatively generic name and then file a DBA for each shop, restaurant, or website.
Essentially, the benefits of a DBA focus on helping you expand your business while controlling costs and minimizing the amount of paperwork you have to deal with.
Learn more: DBA vs. LLC
I’m sure this sounds like a lot of unnecessary, extraneous paperwork. Yet there actually are a few important reasons to get your DBAs in order:
- It’s the easiest way to register your name. If you’re a sole proprietor, then filing for a DBA is going to be the simplest and least expensive way to use a business name. You can create a separate professional business identity, without having to form an LLC or corporation. And for sole proprietors, a DBA is required in order to open a bank account and receive payments in the name of your business.
- For LLCs or corporations, a DBA will let you operate multiple businesses without having to form a separate LLC or corporation for each business. Let’s say your business wants to expand into multiple websites, stores, restaurants, services, etc. You can create a corporation with a relatively generic name and use a DBA for each individual business. This will cut down on your paperwork and expenses when you’re operating multiple projects.
- Keeps your business compliant. If your business is an LLC or corporation, you enjoy certain legal protections. However, these protections may be invalidated if you’re operating under a different name and didn’t file for a DBA. For example, I may have incorporated Spring Flowers Gardening, Inc. But if I sign a client contract under Spring Flowers (or some other variation like that), that contract may not hold up in court.
Do You Really Need One?
In general, there are two primary reasons why a business in the U.S. will need to get a DBA:
For sole proprietors: If you’re operating your business as a sole proprietor, then you’ll need to file for a DBA if your business has a different name than your own name. So, let’s say I’ve started a gardening business called Spring Flowers Gardening; I’ll need to file for a DBA for “Spring Flowers Gardening.”
There are a few other details to know. In some cases, you don’t need a DBA if your business name is a combination of your name and a description of your product or service. In this case, if my business was called Nellie Akalp’s Gardening Service, I may not need a DBA. But, if it’s just my first name (aka Nellie’s Gardening Service), then a DBA is required. If that sounds confusing, don’t worry; just touch base with your local (town or county) clerk’s office and ask them if you’ll need a DBA.
For corporations and LLCs: If you have filed to become a corporation or LLC, then you’ve already registered your business name and don’t need a DBA. However, you will need to get a DBA if you plan on conducting business using a name that’s different than the name filed with your LLC/corporation paperwork.
So back to my Spring Flowers business. I incorporated my business as Spring Flowers Gardening. My business will need to file a DBA in order to operate under “SpringFlowersGardening.com” or “Spring Flowers.” Likewise, if I opened a Garden Shop, I’d need a DBA for “Spring Flowers Garden Shop.” In short, you’ll need a DBA to operate with any kind of variation of your original name.
If I’m a sole proprietor, do I need to file a DBA?
It depends. If you are operating your business as a sole proprietor, you’ll need to file a DBA to operate your business with a name that’s different than your own personal legal name or last name. For example, if you want to start a gardening business with the name “Spring Flowers Landscaping” then you’ll need to file a DBA to be able to use that name.
But if you’re a sole proprietor and are going to use your own personal legal name or last name for your business, then a DBA isn’t necessary. In addition, you don’t need to file a DBA to use a business name that includes your surname and a combination of words that accurately describes your business. For example, if your name is Jane Doe and you have a landscaping business, you do not need a DBA to call your business “Doe’s Landscaping.”
If my business is structured as an LLC or Corporation, do I need a DBA?
If you filed to become a corporation or LLC, then you’ve already registered your business name with the state and don’t need a DBA to use the official name on the filing paperwork. However, you do need to file a DBA to use any variations from the official name on your LLC/incorporation paperwork.
When do I need to file my DBA?
You shouldn’t conduct any business under a fictitious business name until filing a DBA for that name. Most banks typically won’t let you open a business bank account (and accept checks to your fictitious business name) until you have filed for a DBA.
Is there a difference between a fictitious business name and a DBA?
No. Fictitious business names, DBA, and assumed business names all mean the same thing.
If I file for a DBA, does this prevent others from using my business name?
No. In most states, a DBA doesn’t guarantee exclusive rights to a name. When you file for an LLC or corporation, this can give you exclusive rights in your own state. You can also file for a trademark to guarantee exclusive rights to the name within your line of business in all 50 states.
Filing a DBA
You should file for a DBA before doing any business under your fictitious business name. Some jurisdictions give you some leeway and will allow you to file shortly after you first use the name. When a DBA is a prerequisite to opening a bank account and forming contracts with customers, I recommend filing for one upfront.
From state to state and county to county, the requirements for filing a DBA vary. In some states, you register for DBAs at the county level (and individual counties may have different forms and fees). In some states, you register your DBA with the State Secretary of State or another state agency.
Depending on the state you’re located in, you might also need to publish a notice in your local newspaper and then provide proof to the state that you have done so.
Need to File a DBA for Your Business?
By asking CorpNet to help you with your DBA filing, you can rest assured the process will be handled correctly and quickly. We will assist you in identifying whether your desired name is available, preparing and filing the DBA form, and more.