A DBA lets businesses use a different name without changing their legal structure. Registering requires checking availability, filing paperwork, and meeting state rules.
By Brad Nakase, Attorney
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An abbreviation for “doing business as,” a DBA allows you to give your company—or a division of your company—a name other than its registered name. While this doesn’t offer the same legal protections as other types of business organizations, it may assist in developing your company’s reputation.
You might think of a DBA as an alias that your firm utilizes to market an image or product that might conflict with your real name. Having a DBA is like Clark Kent acting as Superman while doing his hero work.
Different states may also call DBAs fictitious names, assumed names, or trade names. All of these terms mean the same thing. A DBA is simple and cheap to register. But you should know that while it has many advantages, it is not a legal framework for a business and provides no protection from personal or business debts. A DBA will make your name more official, but it will not shield you or your property from legal action.
Although a DBA isn’t always necessary for a business, it can be a helpful tool. If you want to do business under a name other than your personal name or the official name of your company, you’ll need to register for a DBA name. A DBA can give your business more credibility, confidentiality when you prefer not to use your personal name, and a different way to market your business.
Creating a DBA might be beneficial for your organization for various reasons. Some of these advantages are:
If you own a sole proprietorship or partnership that uses your real name, a DBA can help you hide your identity by giving your company a different name. For instance, Katy Simpson’s interior design consulting firm could be “Simpson Interiors” instead of her real name.
If, for example, Katy Simpson starts Simpson Interiors, LLC to handle interior design but then decides she would also like to make and sell decor, she can keep everything under a single company entity by rebranding Simpson Interiors as Simpson Custom Decor instead of forming a separate LLC. This allows Simpson to differentiate her products and services while still keeping her original business structure.
A DBA offers several significant advantages that sole proprietorships or partnerships should carefully consider:
With a DBA, branding is a breeze, and when it comes to marketing, having a name that clearly promotes your product or service is a huge help.
The good news is that establishing a DBA does not necessitate a large financial outlay, which increases legitimacy and lends confidence to your company.
As an example, if you operate ice cream parlors in several states, you can use a DBA to brand each one with the name of the state or town where it is located, making it easy to expand your business and make it unique.
Get a business checking account with a bank. Many financial institutions want a DBA from sole proprietorships and partnerships before they would create an account.
The use of a DBA allows for the creation of fake business names in many jurisdictions, but it does not necessarily prohibit others from using the same name. In order to achieve that kind of protection, you would need to trademark the company name.
Using a DBA to start, grow, and promote your business is fast and straightforward, but it won’t shield your personal assets from lawsuits that target your firm. For example, if someone sues your sole proprietorship, your personal assets would be at risk.
Instead of forming a sole proprietorship, business owners who are seeking to limit their personal liability may want to think about forming a limited liability company (LLC) or a corporation. An LLC is a separate legal entity that shields personal assets like cars, homes, and bank accounts from possible lawsuits.
Be sure the name you’re considering for your DBA isn’t already in use at the state or local level. This isn’t a hard step to do and could end up saving you a lot of trouble down the road. If you find a great name for marketing but it’s already in use, you definitely don’t want your competitor to use a similar name. By registering your unique name, you can be sure no one else has the authority to use that name in that state.
There is a difference between registering a company or a company name and registering a trademark. If you register your company name as a trademark, no one else in any state can use the organization’s name or logo. This extra step can help keep your company name unique so that customers find your business instead of a competitor.
If you want the best marketing and legal protection, employ a combination of DBAs and trademarks. Keep in mind that DBAs don’t offer much in the way of exclusive protection, but they are an effective way to have the right to use the name.
You may easily set up a DBA by following these general steps. However, you should check the website of your state’s Secretary of State to see if there are any unique requirements.
Check the availability of the DBA name you need by searching your name. In most cases, you may accomplish this by visiting the website of the Secretary of State, where you can perform a search for business entities.
Take a look at what your state requires for names. Typically, you can’t use keywords that are connected to banking or that may be identified with a government agency.
Take care of operational matters. Before establishing your DBA, you may be required by some states to conduct business under it. Printing out labels, brochures, and business cards is an example of operation. In most cases, you may find an online or snail mail form to register your DBA with the Secretary of State or a local government agency.
It is important to know that the requirement to have a DBA can vary depending on the state in which you do business. While some states do not require registration, it is best to check with your local and state governments to find out. You can also find this information on the Secretary of State’s website. Failure to register a DBA in a state that does require it can result in penalties.
Although your state may not need registration, it is still a good idea to establish a DBA. This will help your firm remain compliant and will make it easier to set up multiple businesses.
Keep in mind that when you register a DBA, you’ll need to keep track of when it expires. The renewal process varies by state, but in California, for instance, it’s required every five years. In Texas, you have ten years to use the DBA, and in New York, there’s no need to renew because the DBA doesn’t expire.
Keep in mind that the validity of your DBA registration is subject to extension or renewal after five years in many states. It is in your best interest as a business owner to be aware of when your DBA registration expires.
To prevent any misunderstanding or legal complications, you should terminate the registration of your DBA if you no longer wish to use it, rather than renew it. To cancel a DBA, follow these steps:
There are a number of reasons why a business owner might want to close a DBA. For example, they might be planning to retire, they might have sold the company to someone who intends to start over with a new name, or they might have reorganized in some way as a different kind of business entity. Regardless of the reason, the process of canceling a DBA usually involves reaching out to the authority that filed it, filling out paperwork, and occasionally paying a fee for processing.
Generally, DBAs are not required to file separate taxes; rather, taxes paid with respect to funds received through a DBA will be a component of the business return. The frequency with which taxes are due is conditional upon the business structure; for example, a sole proprietorship is required to pay taxes once a year unless it does not earn any income whatsoever.
Obtaining an employer identification number (EIN) can make it easier for a DBA to keep its business and personal affairs separate, but it’s important to remember that the IRS does not require a sole proprietorship to obtain an EIN. Instead, you can use your Social Security number when you file your taxes. On the other hand, some banks require a business to have an EIN in order to open a business bank account. Having both an EIN and a business bank account lends credibility to your company’s operations.
You may apply for an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) with the following information: your Social Security number, the address where your firm is located, and, if you have a DBA, the name of the DBA.
You can start a DBA without spending extra money on incorporation or organization because it isn’t a formal business structure. To register a DBA, you need to submit paperwork to your state’s Secretary of State and pay a filing fee that ranges from $10 to $100, depending on your location.
By registering a DBA, you are notifying the public that a business entity intends to carry out operations under a name different from its official legal name. This could be a pseudonym for a sole proprietorship or a whole division of operations for a corporation.
There are three main components to registering a DBA in California: verifying the availability of the name, submitting the required papers, and fulfilling publishing requirements. Filing a DBA in California may seem complicated at first, but it becomes clear and manageable with proper guidance.
To make registering your California DBA easier, we’ve broken down the procedure into subsections that explain each step in depth.
1. Verifying availability of names
Make sure the name you want to use is available before you register a DBA by following these steps:
2. Filing a statement with a fictitious business name
After you’ve verified that the DBA name you want is available, the next step is to fill out the proper paperwork for your DBA. This includes the fictitious business name statement form that is specific to your county or city. Once you’ve gotten everyone’s signatures on it, you can submit it to the relevant office.
To make certain you have the most recent version of the form, you should contact the county clerk’s office and ask if it can be downloaded and printed. The paperwork must be certified by an officer, partner, shareholder of the company, or the company’s owner. The filing costs for registering a DBA in California differ by county, and there may be extra costs for publication requirements.
3. Satisfying the criteria for publishing
If you’re using a DBA, you’re required to publish it in a local newspaper with general readership in the county where your business is situated. This publishing must occur once a week for four weeks in a row after you file your DBA statement.
To avoid any repercussions, it is vital to collect the signature of the county clerk on the publication’s affidavit within 30 days after the final publication is complete. Failure to provide testimony to the county clerk may result in penalties, therefore staying on top of this obligation is paramount.
4. Renewing the registration for your DBA
If you want to keep your California DBA registration active beyond five years, you’ll have to go through the whole registration procedure again, including sending in the renewal form that your city or county needs and paying any renewal costs that are related with that change.
Keep in mind that republishing your DBA name isn’t required until you renew your FBN statement within 40 days after it expires or if there are changes to the information on the FBN statement.
5. Revising the details of your DBA
To keep your DBA registration up-to-date, you must refine and re-complete the entire procedure if any information about your firm changes, such as the address or number of owners.
In order to be in compliance with the law, it is crucial to update your DBA information. If your company’s information changes, you are required to update your DBA within 90 days in California.
While a DBA does allow businesses to operate under a different name, it does not offer the same legal protections or tax advantages as other structures, such as an LLC or a corporation. Knowing the differences between a DBA and other structures is essential when deciding whether to register one or not.
In this next part, we’ll compare and contrast DBAs with corporations and limited liability companies.
1. LLC vs. DBA
A DBA is just a different name for your company; it won’t shield your personal assets from creditors or court actions against your business. If you’re a sole proprietor in California and you have a DBA, you may not be able to take advantage of the tax benefits that LLCs offer.
If you want to form a limited liability company (LLC) in Los Angeles County, California, you’ll have to pay a filing fee and submit articles of incorporation to the Secretary of State’s office. This is more labor and expense than registering a DBA.
There is a one-time charge and no need to file business formation paperwork to register a DBA in California; the procedure is also more simplified.
2. Corporation vs. DBA
The strong legal protections and tax advantages that a corporation—a separate legal entity—offers outweigh those of a DBA, which is a simpler and less expensive option for small businesses. A corporation provides limited liability protection for its owners, meaning that creditors and plaintiffs cannot usually reach them, and it also shields personal assets from corporate debts, obligations, and liabilities.
Contrasted with the more involved process of incorporating in California, which involves filing articles of incorporation with the California Secretary of State and complying with various corporate requirements, registering a DBA in California is simpler, requiring only a one-time fee and not requiring filing of business formation documents.
A DBA permits you to run your business under a different name, while a business license lets you use your legal business name in certain areas of your industry. For example, if you want to open a restaurant but don’t want to use your legal name, you will need a DBA. On the other hand, if you sell alcohol in your restaurant, you will require a license to sell alcoholic beverages. A liquor license is a type of business license that lets bars and restaurants legally serve alcohol.
Business licenses are required to legally do business in certain industries; if you are unsure of the type of license you need, you may inquire with the California Secretary of State. A DBA is not necessarily required to start and manage a business in California.
Any business entity, whether it be a sole proprietorship, partnership, limited liability company, or corporation, that wishes to conduct business in California under a name other than the owner’s legal last name is required by law to submit a DBA.
Legally, you need a business license from the city where your business is located and providing services, and a DBA (doing business as) is a made-up name that you register with the county clerk to use on official documents like contracts and invoices. Whether a DBA is required or not depends on the county, but in any case, you need both to run your business legally in California.
If you want to use more than one DBA in California, you’ll need to register each one separately by searching for the name, filling out a fake business name statement, paying the costs, and advertising it in a newspaper.
Using a DBA as a part of a sole proprietorship or partnership allows you to test the waters with a new business or product idea without committing fully. However, once you have proof of concept, it’s time to move on to the next step, which could involve starting an LLC or incorporating your DBA. Having a solid legal foundation is the first step in building a strong business.
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