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In the world of starting your own business, the term DBA stands for "doing business as." A DBA is the way to go if you want to run your business under a name different than your legal name. Using a DBA can also be useful for sole business owners who aren’t interested in forming an LLC or corporation. Let's break down the concept of a DBA and show you how you can easily register for one.
Do you need a DBA for your business?
The DBA you register your business as becomes your business' assumed name. The process of filing for a DBA will allow you to conduct business under a name other than your own or that of your LLC or corporation. The DBA is different from the name of the business owner or entity, which can be useful for branding your company or a specific product.
Say your legal name is Joseph Smith, and you are launching your own pet grooming business. If you open your own business without filing for a DBA, it's assumed that the business will operate under your name, Joseph Smith. But for the sake of branding your business and making it stand out, you might find it more strategic to brand and market your business as “The Pet Groomers” or another name altogether than your legal name. Luckily, you can register “The Pet Groomers” as your DBA to legally use that name to refer to your business.
You're not limited in the amount of DBAs you can register. If your main company produces several different products. it can be useful to file a DBA with the name of each individual product. Then you can use that DBA to market the products more effectively.
How to File a DBA
DBA registration is easy as long as you follow the proper steps in your local jurisdiction. There are also DBA companies that will do it for you for a fee, but in most cases. you can handle it on your own and avoid the additional costs of hiring a DBA company to file on your behalf.
To use a DBA with your business, you must begin by completing and filing the appropriate DBA forms. These might be filed with your city, county, or state (or a combination) and will also require a modest filing fee. It’s important that you do verify all the authorities you need to file with, and confirm all the filing requirements to ensure the process is completed properly. Once the DBA application is approved you receive a DBA certificate that allows you to use the fictitious name when referring to your business.
Some states will have different offices to file a DBA for a sole proprietor versus LLCs or corporations. And the forms for each business entity may be different as well. Check with your own state or county to be sure you are filing the appropriate forms for your business entity. After your filing is accepted and approved you can begin using the new DBA name.
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There are a number of other considerations when filing for a DBA:
- Many states require that DBA filings for LLCs and corporations also include a "Proof of Good Standing." These good standing certificates confirm that your company is authorized to transact business in your state and that it is in compliance with all regulations and laws. Good Standing Certificates can usually be requested from your Secretary of State.
- There are name restrictions on DBAs that prevent you from indicating your business is a corporation or LLC if it is not. So, if your business is not a corporation, you cannot use names that include “Corp” or “Inc.” Similarly, you cannot name your business as an LLC if it is legally not filed as an LLC.
- In some states, you are required to provide public notice of the DBA by announcing it with a local newspaper or other such publication.
- The filing method and payments will vary from state to state. Some states allow DBA filings to be done online, while others require physical documents be submitted. Notarization may also be required. Also, some states will allow the filing fee to be paid by debit or credit card, while others will require a money order or cashier’s check.
- Not registering for a DBA can come with harsh penalties. Every state makes it illegal to transact business under an assumed or fictitious name that hasn’t been registered. Penalties can include steep fines and even criminal penalties. In some states, your business can be shut down if you're doing business under a name other than your own without filing for DBA. When you consider that filing fees are generally no more than $35, it seems well worth remaining within the law and obtaining a DBA.
- In nearly every state, you cannot use a DBA until the filing has been processed and approved. This means you do need to plan ahead since it can take up to 60 days for some offices to process the DBA filing.
- DBA registration does expire in most states and the most common term is five years. Be sure to know when your DBA registration is due to expire and be sure to renew prior to the expiration date.
- Many states will also require a new DBA filing if there is a change in the information from the original DBA filing. These changes can include a change of address, change in the officers of the corporation, change in the legal name of the business, or a change in partners. Some states allow for an amendment to be filed, while others require a whole new registration.
After You File Your DBA
After you receive notice that your DBA has been registered, you can begin using it in your business fully. You can write contracts, get a business loan to expand your operations, open a business banking account, or do anything else with that fictitious name representing your business. You can even use it to sell parts or your whole business, including selling the DBA brand name as intellectual property.
As you’re seen, the process of filing for a DBA isn’t difficult. You simply need to follow the requirements of your state or county - submit the proper forms and pay your filing fee. It’s best to do this as soon as possible though as it can take as long as 60 days for your state or county to finish the registration process, and until the process is finished you cannot legally use that DBA name.
Once your DBA name is approved, you’re all set to use it in your business. After that it is just a matter of staying compliant in the use of your DBA and renewing it as needed based on your jurisdiction.
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Steve has been writing in the financial products space for over a decade, with interests ranging from personal loans to investing. He is also deeply into the blockchain space. In his free time, you can find him in the kitchen preparing delicious meals, or outside hiking and biking.
