A DBA (Doing Business As) name allows businesses to operate under a different name, enhancing branding flexibility and privacy. It is essential for opening business accounts, expanding services, and improving public perception without creating a separate legal entity.
By Brad Nakase, Attorney
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A company may find it beneficial to operate under a DBA (doing business as) name for many reasons. There is always a “real name” or “legal” name for a company. The legal name of a sole proprietorship or partnership is the name of the owner or owners of the business. Legally, the name that appears on the formation document (such as the articles of incorporation or articles of organization) is the one that a corporation, limited liability company (LLC), or other statutory body is known by.
Filing a DBA also gives an individual or company the option to do business using a name other than its legal name. “Doing business as” is the acronym for this phrase. A “fictitious company name,” “trade name,” or “assumed name” are some other names for a DBA name.
When a person or company registers a DBA name, it lets the public know that it is doing business under a different name than its legal identity. Laws that protect consumers are known as assumed name (DBA) laws. In order for customers to know who they are dealing with, businesses must register their DBA names.
There is no cap on how many different names a company can use, including DBAs. However, according to the majority of states’ laws, a limited liability company (LLC) or sole proprietor cannot use a name other than their own without first registering the DBA name. Similarly, corporations and LLCs are limited to using the names listed on their formation documents when conducting business.
There is a difference between registering your business and registering a DBA.
Establishing your company as a legitimate business entity is distinct from establishing your DBA and conducting business under that name. The state in which you conduct business will treat your business as a sole proprietorship if you register a DBA before incorporating as an LLC, corporation, or any other sort of legal entity.
If you’re a sole proprietor in that state, you can use a made-up company name to legally do business, but you won’t be protected from personal liability. This renders you personally liable for any and all debts and obligations incurred by the company.
Business owners can shield themselves from personal responsibility in court by forming a limited liability company (LLC), limited partnership (LP), or corporation (whether it’s a C or S corporation for tax reasons). Legal entities such as corporations, limited liability partnerships, or limited liability companies (LLPs) own and are liable for the debts of the the company. None of the members, shareholders, or partners are. This is one of the most significant advantages of establishing a legal entity.
If you do not wish to use the name that appears on your company’s formation document when doing business after you have formed your corporation, LLC, or other entity, you must file the necessary paperwork to register your “doing business as” name.
DBAs are not trademarks.
When compared to registering a trademark, registering a trade name or a DBA name does not offer the same level of legal protection. The majority of states do not provide any protection against the use of a DBA name by another company. An individual must submit an independent application to the USPTO in order to secure a trademark.
In addition, you’ll have to “foreign qualify” (register to conduct business) in every state where you intend to expand your business. No limited liability company (LLC), corporation, or other statutory business entity may conduct business in any state unless it is qualified to do so. Noncompliance will result in sanctions. The certificate of authorization for your firm will reflect your legal name in the areas where you are eligible. To change your name, you need to file the necessary paperwork with the state to register your DBA name.
Some of the most common justifications given by companies for using a DBA name are as follows. Bear in mind that these factors frequently differ based on the nature of the company in question. The reasons why a corporation or limited liability company chooses to operate under a different name than its owners are different from those of a single proprietorship.
1. Instead of using your real name when doing business
Businesses that operate as sole proprietorships or general partnerships must give careful consideration to this matter. Whenever you are required to list your business’s name on a public record, your personal name and business name will automatically be the same unless you register a DBA. If you are concerned about your privacy, you might want to consider changing the name of your company.
2. If you want your company name to stand out from the crowd
Your company’s official name can be lengthy, awkward to say or spell, challenging to recall, or unfriendly to search engines. For instance, your limited liability company is known as Quality Automotive Care Company LLC, and you plan on establishing a repair shop in the town of Monroe. You have the option to register a DBA in order to conduct business as Monroe Quality Auto Repair.
If you run your business by yourself or with a partner, you might want a name that stands out or describes the type of business you run. In the event that you are John Smith and own a landscaping company, your company name will be John Smith. Perhaps you would be more successful if you went by the name John’s Gardens and Flowers. A general partnership operates in the same way; the names of the partners are also the name of the company. You can avoid using your real name when doing business by registering a DBA.
3. To establish a business bank account with your bank
A DBA is typically necessary for banks to open a business account for sole proprietorships and general partnership partners. Proof that you registered the name, such as a DBA file or assumed name certificate, is often required by banks.
4. If your current name does not adequately describe your business’s new line of work
When an existing company or limited liability company (LLC) wants to branch out into a new industry or provide a different set of goods and services, they’ll often adopt a “doing business as” moniker. It could be helpful to have a name that is more evocative. Take Summer Sprinkler Systems Inc., a company that specializes in sprinkler system installation and repair. During the winter, they want to provide snowplow services. For that branch of your company, you can opt to register a DBA under the name Plowing Specialists.
5. Run a website or company under a different name by using a domain name as a DBA
Companies can use their domain names for business transactions by filing a DBA. When a domain name matching your business name is unavailable, this becomes quite useful. You might, for instance, wish to run a second website or company alongside your current one. So, you have an LLC that manufactures and retails purses for women. And you make purses for preteens and teenagers as well. You build a separate website for this demographic and register a made-up business name through a DBA because you know they won’t buy from their mother’s website.
6. To improve the reputation of your company
Sole proprietorships and general partnerships might gain more credibility by having a DBA name.
7. You can let others know about your business and its name
Because the DBA name enters public record upon registration, other firms are publicly notified that the name is in use. One thing to keep in mind is that, unlike trademarks, DBA filings do not offer trademark-level protection in all states.
Again, the applicability of these factors to your firm will differ according on the nature of your business, the legal structure you’re operating under, and your plans for expansion. To find out if a DBA registration is a good fit for your company, we recommend consulting an accountant or lawyer.
First, you must complete and submit the necessary DBA paperwork. Second, you must pay the filing cost. Third, once you have done so, you will obtain a DBA certificate. File your DBA paperwork with the state agency, the county or city clerk’s office, or both, depending on your state of residence.
Extra steps, such as having your DBA published in a local newspaper, may also be required by a city or county. Therefore, before you file a DBA in any state where you are or will be doing business, make sure to check with the appropriate local authorities. Afterwards, make sure you’ve verified all of the entity or business-specific DBA filing criteria.
When it comes to filings, certain states have separate processes for general partnerships, sole proprietors, and corporations/LLCs. Additionally, the formats could vary. You will be able to start using your DBA name once the filing process is complete and you have received the fictitious name certificate.
You should prepare ahead of time because the processing time for a DBA filing can vary depending on the county clerk’s office or the state office. Fictional name registrations have a limited duration in several states and need renewal before they expire. The standard duration is five years. Do not wait until the DBA name expires to submit a renewal request if it is essential to your company.
Your DBA will expire on a certain date, and in most jurisdictions, you’ll need to renew it before then. Additionally, it is typically necessary to re-file fictitious name documents in most countries whenever any of the details provided in the initial filing—such as the company’s legal name, address, or officers—are changed. This is also true for general partnerships, LLCs, and corporations. Amendments can be filed in some states. Some others demand an entirely new registration process. Take charge of the situation.
You should take measures to safeguard your company name because it is an important asset. Your company’s strategy may benefit from using a DBA name. Important stages include registering the DBA name and keeping the registration from expiring. With this fresh understanding, you should consult your company advisor and compliance partner to ensure proper DBA filings and use of DBA names.
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