Characteristics of an Entrepreneur Mindset
An entrepreneurial mindset is determined, creative, resourceful, and resilient in the most adverse circumstances. An entrepreneur mindset is often positive thinking and comfortable with discomfort.
Brad Nakase, Attorney
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Is a DBA required in California?
Yes, a DBA is required in California. Example of when you need a DBA: Leon and Jeanine have shared a passion for technology ever since they went to California Polytechnic together. While Leon is more of a robotics person, having majored in engineering, Jeanine is more interested in computer programming, having enjoy coding since her youth. Together, they form an unstoppable team in Silicon Valley. They have recently decided to start a company together, which will focus on creating advanced robotics that can be used in the medical field, to help advance the art of surgery and save countless lives. While in their startup phase, they agree to call the business Vasquez & Johnson Robotics. However, after two years of slow business, the pair worry that the name is not very descriptive of what they do. Clients who see their business do not automatically know that their robotics are carving a unique path in the medical field. Jeanine suggests that they change their name to MediTronic. Leon wonders how they will officially change the name – what kind of bureaucracy is involved in doing this? Jeanine has done her homework. She tells her partner that in California, a business can have a DBA, or “doing business as.” This means that they do not have to change their old name, but they can use a new, fictitious one. So, while “Vasquez & Johnson Robotics” is on file with the state, they can separately file the name “MediTronic” to use as their everyday business name, or DBA. So, Leon and Jeanine file for a DBA with California, and they are able to change their business name to MediTronic. Instantly, they attract more clients, who now recognize what the company does.
Filing a DBA in California
If a California business owner wishes to use an alternate name for his or her company, then he or she may file for a DBA with the state. A DBA, or “doing business as,” is a fictitious business name. Don’t worry! Filing a DBA in California is a simple process that is performed in the county where a company does its principal business.
Let’s go over the basic steps of filing for a DBA in California.
Step 1: Name Search
The first step on the journey to getting a DBA in California is to think of a name. Likely, a business owner has registered the business in his or her legal name or another name that is no longer suitable for the company. This could be because the company has since branched out into other sectors, or the original name was not descriptive enough of the business performed. So, the owner should first think of a suitable name for his or her DBA.
Example: Sherry originally called her luxury spa “Sherry’s Nails,” but she has since diversified her offerings. She now offers other spa services, such as massages and facials. So, Sherry’s Nails is no longer a suitable or descriptive name. She files for a DBA to change her business’ name to “Marie Antoinette Day Spa,” which implies the luxury of the experience.
It is important, however, to make sure the name one wants is available. The name must be unique enough that no one else has it, or a similar variation. This means that a business owner will need to search the county’s records to ensure that the precise name he or she wants is not already taken by someone else. It is also necessary to check the relevant naming rules to make sure the name complies with these.
What are these rules? Let’s review them.
In California, a DBA name cannot have a business entity suffix if the company is not actually one of those entities. Suffixes include “LLC,” “Incorporated,” “Corp.,” “Inc.,” etc. These suffixes are reserved for specific business types, meaning limited liability companies or corporations. So, unless one’s business is an LLC or corporation, it cannot use one of these suffixes.
Example: Arthur is the owner of a 3D computer modeling company. Because he did not like the company’s previous name, which he thought was not creative enough for the industry, he decides to file for a DBA. He wants the name “Vector C,” which is available for use. However, he wants his company to seem more legitimate, so he decides to add “Inc.” to the name. As a result, his application for a DBA is rejected. Because Arthur’s company is a sole proprietorship and not a corporation, he does not have the right to use the suffix “Inc.”
It would also be a good idea to do a search on the U.S. Trademark Electronic Search System to see whether one’s desired name has already been trademarked. If it has been, then it can’t be used. To attempt to use it would result in a trademark infringement lawsuit.
Once a business owner has settled on a DBA name, it would also be advisable to check to see if there is a domain name available for it. To search this, one can use a service like GoDaddy.
Step 2: File with the County Clerk
As stated above, in California, a business owner should file a DBA with the county in which the company does its principal business. This means that if one is primarily conducting business in Los Angeles County, then the owner should file the DBA in LA County, even if he personally lives in Orange County. It is the business that determines the filing location.
If a company’s principal place of business is outside the state of California, then the business owner must file the DBA with the Sacramento County Clerk.
If the company is a non-profit organization, then it does not have to file a Fictitious Business Name Statement.
Note: A DBA does not offer any liability protection. In that sense, it does not change the state of a business entity, only its name. If a business is not an LLC or corporation, then its owner may lose his or her personal assets in the event of a lawsuit. If an owner wants liability protection, then he or she should consider making the company a limited liability company (LLC) or a corporation. A DBA will not accomplish this.
Because the state of California manages DBA regulations, the steps for getting a DBA are not too different across counties. As an example, let’s review the steps to getting a DBA in Los Angeles County. To check another county’s procedures, one can check with the relevant county clerk for details. The California Department of Public Health’s website lists county contact information.
Filing a DBA in Los Angeles County
As covered in Step One, at this point a business owner should have settled on a fictitious name for his or her company. The owner should have also reviewed LA County’s fictitious business name records to make sure no other business is already using the desired name. These steps should be completed prior to the filing process.
It is possible to access California’s DBA PDF forms via the LA County Clerk’s online fictitious name portal. One can also request that a physical copy of these forms be mailed by calling (800) 201-8999. One can also pick up a copy in person by stopping by the County Clerk’s office.
When a business owner applies in person, he or she does not have to get the statement notarized. However, if a business owner completes the documents by mail or by third-party, then he or she will need to send in a Notarized Affidavit of Identity Form. One can get this form from the county.
So, to review. There are two forms that must be completed:
- Fictitious Business Name
- Affidavit of Identity (not required if applying in person)
There are fees that come with filing. It is $26 for first-time filing of one DBA. There is a $5 charge for each additional DBA.
Step 3: Publish a DBA Statement
After filing, a business owner has 30 days to publish a statement in a local newspaper. The newspaper should be active in the county where the principal place of business is located. A statement should be published once a week for four straight weeks.
It is easy to get this statement published, and newspaper editors will be familiar with the process when one calls to inquire. They will have a template available to use.
The basic steps of the publication process are as follows:
- The newspaper must be in general circulation in the county where the DBA is registered, A list of publications is available on the LA County website.
- It is required to publish once a week for four straight weeks
- If the original DBA filing has expired and one is refiling, then it is necessary to publish again.
- It is necessary to file an affidavit that proves publication within 30 days of publication.
Step 4: Managing a DBA
A business owner is required to renew his or her Los Angeles County DBA every five years. To renew a DBA, one can find the relevant forms on the lavote.net website. The fee for renewal is $26. If mailed in or delivered by a third party, then a notarization form may be required.
If a business owner wishes to make changes to a DBA, then he or she should visit the fictitious business name amendment page on the lavote.net website. Again, if mailed or delivered by a third party, a notarization form may be required.
To withdraw a DBA, one should call the LA County clerk at (800) 201-8999 to ask for a statement of abandonment.
Learn more about: Business | Corporate | Employment Law
See all articles: Business | Corporate | Employment
See all articles: Business | Corporate | Employment