What Is a DBA, and Do I Need One?
A DBA, or “doing business as,” allows business owners to conduct business under a name separate from their own or the formal name of their company. Sole proprietorships and partnerships would be required to register a DBA with their local or state government. A limited liability company (LLC) or corporation does not have to file for a DBA, but there are some good reasons why they might want to add one.
What is a DBA?
A DBA is also called a fictitious, assumed or trade name, and it’s something you might consider if you don’t want to do business under your own name or that of an already registered business. By default, a business is a sole proprietorship operating under the legal name of its owner. When owners opt for a different name or decide they want the protections of a legal entity, this is when they have to make a choice between a DBA or LLC or other structure.
If Sarah Smith owns a sole proprietorship, and her business name is Sarah Smith Painting, she won’t need a fictitious name. But if Sarah decides to operate her house-painting business as ABC Painters or Painting Pros, she would need to register a DBA with her state, county or city.
What it means to have a DBA
Any type of business could use a DBA name, but there are some cases when you would be required to have one.
- For sole proprietors, a DBA gives them the ability to conduct business and create a brand away from their personal identity. You would be required to file for a DBA under that new brand or name.
- A general partnership with two or more owners would be required to file a DBA to do business under a name that is different from the personal names of the owners.
- A corporation or an LLC could file a DBA to operate multiple businesses through one entity. A corporation must register a DBA for each of the businesses operating under the main title.
In the case of LLCs and corporations, a DBA allows you to do business under a name that’s different from your official business name without creating a new corporation or LLC. Maybe you want to offer products or services not reflected in your current title. If a company is entering a different area of business, a DBA is a way to point to the new offerings.
A freelance writer could create an LLC for their main writing business, then file DBAs for each category of writing that they provide, such as finance writing or wedding-related writing.
Pros and cons of a DBA
A DBA is often used for branding purposes, but it does not come with any legal protections and doesn’t shield your personal assets from being seized in the case of a lawsuit. A corporation, on the other hand, is its own legal entity, protecting owners or shareholders from being personally responsible for the company’s expenses and debts. Here’s a closer look at the benefits of a DBA compared with an LLC or other business structure.
Relatively inexpensive and simple to set up.
Fewer liability protections when compared with an LLC or corporation.
May not fully protect your brand or business name.
Keeps your business compliant with state or local laws.
Renewals are typically required.
How to get a DBA
You may file a DBA as soon as you start selling a product or offering a service, according to the guidelines in the city, county or state in which you’re conducting business. Here are the steps to setting up a DBA:
Step 1: Choose a name
Multiple businesses may be allowed to use the same DBA in one state, unless it has been federally trademarked. Before choosing a DBA, search the trademark database of the U.S. Patent and Trademark Office.
County or city offices do not typically check for trademark protections when processing DBA applications, so it’s the business owner’s responsibility to make sure they’ve chosen an original name, Steele said. Unlike a trademark, DBA names have no federal protection from being copied. Business owners could choose to trademark their DBA if they want to prevent anyone else from using it.
TIP: If your city, county or state has a searchable database of assumed business names, use it. Even if the same DBA is allowed, it may create confusion to have more than one ABC Painters in town. And some local governments may not allow you to use the same name or verify that your chosen name is not already in use.
Step 2: Register the dba
Once you’ve settled on a name, you would file a DBA with the appropriate government agency. Start by finding your state government website. The process for filing a DBA varies by state, county and city, but generally requires submitting a single form with your local government and paying a registration fee.
Step 3: Declare your dba
In some states, business owners are required to publicly announce that they’ve registered a DBA. California state law, for example, requires owners to issue a statement announcing their DBA in a general circulation newspaper within 30 days of filing. The statement must be published once a week for four consecutive weeks in a paper that’s distributed in the county in which the business operates.
Sometimes, the turnaround is even faster. In Cook County, Ill., business owners must publish a notice in their local newspaper within 15 calendar days of registration. The notice must be published once a week for three consecutive weeks and proof of publication – original clippings only, no photocopies – must be submitted to the county clerk within 50 days of the original date of the application.
Do I need a DBA?
As discussed, a DBA allows you to conduct business under a name that’s separate from your official business name. Having a DBA may be useful in several instances:
- If you’re a sole proprietor and you want to use a name besides your own when doing business.
- If you want to assign special branding to certain divisions within your business.
- If you prefer flexibility to adapt to changing customer trends.
In some cases, you may be required to have a DBA to open a business bank account. You may need to provide the DBA filing or an assumed name certificate as proof of registration.
Renewing your DBA
Once you have a DBA, you’d be required to keep it up to date. You may need to renew the business name every five years. Changing any part of your filing – relocating or incorporating the business, or adding a new partner – may require an amendment or an entirely new DBA filing, depending on your local regulations. Make sure you remain compliant so you can continue using your DBA without issue.