What Is a DBA, and Do I Need One?
A DBA is a nickname you use publicly for your business. DBA stands for “doing business as.” DBAs allow business owners to conduct business under a name different from the legal name of their company. Although it’s not necessary to use a DBA, many companies benefit by having one or several DBAs.
- A DBA allows businesses to operate under a different name than their legal business name, providing branding flexibility and privacy protection for owners.
- Each state has unique regulations for DBAs, including registration processes, renewals and potential publication requirements.
- While DBAs offer marketing benefits and simplified banking, they provide no liability protection or exclusive naming rights.
What is a DBA?
A “doing business as” or DBA is also called a fictitious, assumed or trade name. There are many marketing reasons for using a DBA instead of the full legal name of your business entity. There can also be privacy and administrative advantages to using a DBA. In most states, it’s necessary to register your DBA with the local government before using it for business purposes.
Do I need a DBA?
You only need a DBA when you want to run a business using a name different from the company’s legal name. You may need to use a DBA if:
- Your business is a sole proprietorship or a partnership. If your business meets these classifications, its legal name is the name or names of its owner(s). Using a DBA can provide stronger branding for your products and services, and also provides some privacy by taking the owners’ names out of the spotlight.
- You have multiple lines of business. If you want to brand each separately even if they’re all under a single corporation, DBAs are a great option.
- You want to distinguish your business by its location. If you own multiple franchise locations, for example, you may want to register a different DBA for each one of your stores.
- You’re expanding to a new state and find your current DBA already registered to someone else. If so, you’ll want to consider a new DBA for the new state.
An individual named Mary Jane Doe forms an LLC legally named “Mary Jane Doe, LLC,” which engages in two types of businesses: Wedding catering and photography.
The LLC can register the DBAs “Aunty Jane’s Catering” and “World Famous Wedding Photography” to advertise each service separately. Benefits include clearer branding, the ability to set up separate business bank accounts and some privacy for Mary Doe personally.
Businesses that don’t need to register a DBA may still benefit from it
If you want to use a DBA, most states require you to register it formally. But even if you are located in one of the 13 states that currently don’t require registration, you may still benefit by registering:
- Banks may still require proof of DBA registration to open a business account under that name, even if the state doesn’t require it. Bank accounts offer multiple benefits and may be needed to apply for a small business loan.
- If other businesses that see you’ve registered a DBA, they may be less likely to choose the same name for their business.
- Companies offering DBA registration services typically won’t assist in registering a “copycat” DBA under a name that’s already registered in the same location, especially since some states don’t allow it. This provides you with a little additional brand protection.
DBA vs. LLC
DBAs are very different from LLCs, with each serving a unique purpose.
DBAs allow your business to operate under another name. They aren’t a legal entity, and you can have multiple DBAs per business. Aside from offering branding opportunities and some potential privacy, however, they won’t offer any legal protection.
Limited liability companies (LLCs), on the other hand, are a type of legal entity (like a corporation or a partnership). They can receive their own EIN, and provide some degree of legal protection since they are a separate, legal entity from their owners. If someone sues your LLC, for example, there may be some level of protection for your personal assets.
You can have an LLC and create DBAs for that LLC.
Pros and cons of a DBA
Here’s a closer look at the benefits and limitations of a DBA:
Pros
- Registering your DBA(s) keeps your business compliant with state or local laws that require it.
- It is relatively inexpensive (often $100 or less) and simple to set up a DBA.
- A DBA that doesn’t include your name provides some personal privacy.
Cons
- A DBA doesn’t provide liability protections. Those are based on your legal business structure: LLC, corporation or limited liability partnership.
- Registering a DBA doesn’t give you exclusive legal rights to the name
- DBA registration renewals are required in many states: Be sure to track their deadlines.
How to get a DBA
If you’d like to use a DBA for your business activities, you should start the registration process as soon as you choose a “doing business as” name. Here are the steps to follow to set up a DBA:
1. Choose a name
Multiple businesses may be allowed to use the same DBA, especially across state lines, unless it has also been trademarked.
Before choosing a DBA, search the trademark database of the U.S. Patent and Trademark Office. County or city offices do not always check for trademark protections when processing DBA applications, so it’s the business owner’s responsibility to make sure you’re not infringing on another company’s rights.
2. Register the DBA
Once you’ve settled on a name, file a DBA application with the appropriate government agency.
The process for registering a DBA varies significantly based on your location. Some accept online applications, while others require paper forms or even notarized documents. Generally, all require a registration fee along with the application.
Generally, the quickest way to find the requirements in your state are to search “[your state name] + register dba,” and then find the .gov page run by your state government.
If you are using the DBA to do business in more than one state or municipality that requires registration, you must register the DBA in each location.
3. Declare your DBA
States like California, Georgia, Florida, Illinois, Minnesota, Nebraska and Pennsylvania require business owners to publicly announce or disclose that they’re registering a DBA.
Requirements vary by location, so start by researching the details for your particular region and allow time for this step if required.
For example, in California, business owners must post an announcement in a general circulation newspaper that’s distributed in the county where the business operates; it must be posted within 30 days of filing and repeated for four consecutive weeks.
- Misrepresenting your company. Your DBA name shouldn’t mislead customers about what your business actually does or suggest services you don’t provide.
- Using the same name as another company. Use a unique DBA to stand out, build brand recognition, and avoid confused customers. Keep in mind that most states don’t allow two companies to use the same DBA.
- Not having your paperwork ready. Gather all required documents before starting your application, including your certificate of good standing. Missing paperwork can delay your registration or result in rejections that require you to restart the process.
- Not getting your DBA trademarked. If you want to ensure that no other business uses your DBA, you need to get it trademarked.
- Failing to abide by state laws. It’s important to check state laws for criteria like whether you need to publish an announcement of the DBA. Each state is unique and there could be penalties if you overlook a requirement.
How to change your DBA
In most states, you cannot modify the actual DBA name itself through an amendment. Instead, you’ll need to register a completely new DBA and (if you want) cancel the old one.This is different from filing a request to change the name of your business entity, which is possible in most states.
The process generally involves several steps (though again, this depends on your state):
- Register your new DBA name following the same process you used initially, including name availability searches and filing the appropriate forms with your state or county office.
- Publish the new DBA announcement in approved newspapers according to your local requirements. Not all states require this.
- Formally cancel or abandon your previous DBA registration if you want to.
Before making changes, consider the business impact of changing your DBA. There’s the risk that customers will be confused by a business name change, and that it may cost you valuable brand recognition.
There may also be additional costs, including filing fees, registration fees and publication fees.
Frequently asked questions
A business can have an unlimited number of DBAs, even though there is just one official, legal name for the underlying business entity.
No, a DBA does not need or receive a tax ID number such as an employer identification number. A DBA is not legally separate from your business, so it uses the same tax ID as your company.
No, a DBA is not a legal entity. Even if you register a DBA with your state or local government, a DBA is just a name you are “doing business as.”
If you decide to stop using your DBA, no specific action is required. If you’re located in a state requiring DBA renewal, you can simply let it expire. However, if you’d like to disassociate your company from the DBA formally, you can contact your state agency and submit a cancellation.
The duration of a DBA depends on your specific state. In some states, your DBA is permanent once you’ve registered it unless you decide to formally unregister it. Some states, however, require that you re-register after a certain period of time (such as five or 10 years).
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