When You Need a Fictitious Name Registration
If you are a sole proprietor or do business as a partnership, you will need to conduct a fictitious name registration as part of the business license package required to start your business. Each type of business structure (sole proprietor, LLC, corporation) has different requirements for Business Licenses, Permits & Tax, and having a fictitious business name is required for sole proprietors and partners.
However, if you have an LLC or corporation and have a business that has a different name than the business entity, you will also need to file a fictitious business name. For example, if your LLC is Smith Holdings, but you open an ice cream shop called Candi’s Treats, you will need a fictitious name registered for Candi’s Treats.
What it Does
Also called “doing business as,” or DBA, a fictitious name separates you as a person from your business. Rather than operating your dog grooming salon, for example under your name, you would create a separate name for it, such as Fluffy’s Hair Care.
Why You Need It
If you plan to open a business bank account, you will need a business DBA or fictitious name document to create an account under that name. You can’t receive payments under your new business name until you have filed a DBA.
Another benefit to doing business as a separate name is that you provide some distance between your name as the business owner and your business’ name. And you can market your services under the fictitious name too.
How to Get Started
Before you start operating under your new fictitious name, you will need to conduct a fictitious name search (which we offer free on CorpNet) to ensure that no other business in your state has already registered the name.
You will need to fill out a DBA application with your county clerk’s office or with your state government, depending on your state. Search for your state’s government site to find the link online. There may be fees associated with your fictitious business name application. Alternately, you can let CorpNet help you file it fast and efficiently.
Why a DBA Won’t Protect Your Personal Assets
Some people confuse a fictitious business name or DBA with an LLC or corporation by thinking that it protects them from liability. A DBA does not protect you in the event your business issued, if you operate as a sole proprietor or partnership. If your business is sued and does not have the funds to cover the costs, your personal assets may be in danger of being seized. The only protection you can get in this situation is to have registered your business as a corporation or LLC, which separates you as an individual from the business entity you have created.
A fictitious business name only separates you in name. It says you are “doing business as” the name you have chosen. For example, Sally Lite is doing business as Fluffy’s Hair Care. But she is still considered one and the same as the business, so if she cuts a dog’s toenail too short and issued by the dog’s owner, her home, vehicle and other assets are not protected in the lawsuit.