Everything you need to know about Doing Business As (DBA)

Whether your business is new or established, filing for a “Doing Business As” (DBA) name is worth looking into. Like most tasks you’ll complete to form your business, getting a DBA may seem complicated on the surface. But doing so is easier — and more valuable — than you think.

Here are some questions this article will answer:

What is a DBA?

A DBA — or “Doing Business As” name — is a business’ trade name, assumed name or fictitious name. These terms are typically used interchangeably to indicate when an organization operates under a name different from their registered or legal company name.

A legal company name — or true name — can be the name of the business owner or owners for sole proprietorships and partnerships. For other types of business structures, like corporations or Limited Liability Companies (LLC)s, the legal business name is the name filed to found the business. Depending on the state, forms to found the buisness are often known as articles of organization, articles of incorporation or certificates of foundation.

All companies are assigned a legal name when the business is registered. For sole proprietorships and partnerships, the legal name defaults to the name or names of the person or people who own it. This is precisely why many small business owners file for DBAs (more on that in a bit!).

When is a DBA appropriate?

The legal structure of your business often determines whether you should file for a DBA. And the rules governing DBAs are different depending on the state, county or even city where your business is located. So while there is no clear cut “yes or no” answer, these general guidelines should help:

• Sole proprietorships, partnerships and general partnerships

  If you plan to operate under a name other than those of the owner or owners, you’ll need a DBA. For example, if Zach Mills founded and runs his own landscaping company - or does so with a partner under their personal names - but wants people to know his business as “Mills Flower Bed Design,” a DBA filing would be appropriate.

• Corporations or LLCs

  Even though these types of business’ legal names are registered during their founding, one may opt to use DBAs depending on certain business needs we cover below.

Understanding and complying with requirements around DBA registration is essential. Otherwise, you may risk fines and government-imposed limitations on how you run your business. That’s why consulting an accounting professional or attorney is your best bet. In the meantime, read on to get a grasp of the basics.

Legal foundations and implications of DBAs

While a DBA can act as a pseudonym or alias for your business, it doesn’t create a new or separate legal entity. For example, if you own a sole proprietorship, filing a DBA won’t transform your business into a corporation or Limited Liability Company (LLC).

Founding an LLC, corporation or other type of business entity requires an entirely different process. That often includes formally registering the business with the state, local or municipal governments. Those types of businesses must also abide by different tax codes and specific governance rules, which sometimes include hiring chief executives or creating a board to represent shareholders.

Filing a DBA also won’t shield you or any other co-owners from legal or financial liability. As a sole proprietor or partnership, your assets are fair game when it comes to paying business debts or settling business disputes.

How DBAs protect consumers

Most business owners operate on the up-and-up. But for some, filing a DBA might sound like an easy way to hide their personal identity or escape legal liability. Linking a DBA to a business’ legal name in the case of a sole proprietorship or partnership helps hold individuals accountable to their customers.

Allowing companies to create DBAs instead of changing their legal name makes it easy to pivot when business needs demand it.

Why should I file a DBA?

DBAs make it easy for businesses to be agile and quickly take advantage of new, potential revenue streams. Regardless of business type, many organizations can see success and growth when they use DBAs to:

Build brand awareness and market presence

We mentioned earlier that a DBA is a fictitious business name, much like a nickname: fun, catchy and uniquely you. A business name with all of those qualities can go a long way toward building a memorable brand and attracting new customers. “Mel’s Sweet Treats and Eats” has a joyful, musical ring to it. Mel’s personal name? Not so much. (Sorry, not sorry.)

You’ll notice, too, that you can immediately tell what’s in store when you shop with Mel. Customers searching for goodies for their son’s fifth birthday party can instantly see she probably has what they need. Without a DBA, customers would just see Mel’s full name — or perhaps the painfully generic “ME Hospitality, LLC” — and keep right on searching.

Seize and test new opportunities quickly

We’ll use the Mel example again. She can also use a DBA to test new product lines and market to niche audiences. Let’s say after conducting a survey, Mel finds that some customers want sugar-free options, or a healthier menu featuring fruit or acai bowls. She can set up a DBA that caters to that audience and build targeted messaging around the new brand. And she can do it all without jumping through the hoops it would take to change her business’ legal name or open a new business.

Best of all? If the healthy menu options don’t catch on, she can retire the DBA and go back to business as usual. Her DBA allowed her to test, try and even fail, all while protecting the brand she’s built.

Boost credibility

You know that your business is the real deal. But it can be difficult for customers to see that when your business goes by your legal name or a generic one. A polished, professional business name helps consumers know your company is a legitimate legal entity that complies with rules and regulations. It can also give them peace of mind that comes with knowing your business isn’t just a side hustle or a temporary gig.

How do I choose a DBA name?

Without careful consideration of your DBA name, you could inadvertently be confused with a competitor.

You can likely avoid that by conducting thoughtful research on choosing the right DBA name. Start by checking the availability of the name of your business on your state’s, county’s and/or city’s website. Make sure the business name you want isn’t already being used by someone else, or too closely resembles an existing business name.

Ensure your DBA name accurately reflects the services you provide and isn’t too generic. You may be tempted to skip the time it takes to do this thoughtfully. But it’s better to spend time and resources early, instead of having to rebrand further down the line.

How do I register my DBA?

When it’s time to register your DBA, different states, counties and cities have different rules. The processes may also vary depending on the legal structure of your business — whether you have a sole proprietorship, partnership, LLC, limited partnership, corporate or some other entity. So you’ll want to review and follow your state and local protocols. But We’ll cover some general information below.

Often, you may file your DBA with the same agencies or offices you would to register your business type or to get a tax identification number (TIN). That may include the county clerk’s office, the state department of revenue or the Secretary of State. Before you show up, make sure you’re prepared to share certain details, like your or your business’ legal name (depending on your company’s legal structure), your Federal Employer Identification Number (FIN), Social Security number (SSN) or state tax ID and your desired DBA name.

Using that information and more, you’ll be expected to complete and file some documentation, including DBA forms. You may also need a certificate from the Secretary of State that shows your business is in good standing.

Most states charge a filing fee, but few exceed $100. How you pay the DBA cost could also vary by state or municipality, with some accepting online payments, like credit cards, and others requiring checks or money orders.

You may also need to publish a notice in a local newspaper once you’ve filed your DBA, so that consumers understand the connection between an individual and their business’ DBA name.

How do I maintain and renew a DBA?

Like many things in life and business, establishing your DBA isn’t a one-and-done task. Managing it and updating it when needed is the key to ongoing compliance and success.

Even if they don’t change, most DBAs need to be renewed semi-regularly. Again, the frequency depends on which state your DBA is registered in. For example, California could require you to renew your DBA every year, while New York may not.

The good news is, some states may send renewal notices. But it’s still important to keep your renewal date in mind to save yourself from incurring late fees or worse — losing your DBA to non-compliance. You may be responsible for updating your DBA if some aspects of your business change, like the name, address or leadership. You’ll also need to update your information if you want to file a new DBA or fold old ones.

How can I get the most out of my DBA?

You can decide when or whether filing one is right for your business. If building a brand, expanding into new markets or launching new product lines is on your roadmap, a DBA could be a strategic tool to help you get there.

For more free resources that help small to mid-sized businesses grow and succeed, visit The Entrepreneur’s Studio. To learn more about tools that can help any business make every day work better, drop us a line.

Doing Business As (DBA) FAQs

Disclaimer: The information provided in this document does not, and is not intended to constitute legal advice; instead, all information, content, and materials available are for general informational purposes only. Information provided may not constitute the most up-to-date legal or other information, and readers of this information should contact their attorney to obtain advice with respect to any particular legal matter, in the relevant jurisdiction. All liability with respect to actions taken or not taken based on the contents here are hereby expressly disclaimed.

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