A DBA is an abbreviation for “Doing Business As.” It permits you or your company to conduct business under a name other than your legal organization name.
As an example, suppose you own a flower shop. If the name of your single-member LLC is Loren Smith, LLC, you can register a DBA and run your business as “Loren’s Flower Shop.” It is also known as a “fictitious business name.”
why do you need a DBA?
There are numerous reasons why individuals or corporations want to obtain a DBA. Some of these are as follows:
keeps your business on the right side of the law
Owners of LLCs or companies enjoy legal safeguards, such as preserving the owner’s personal assets if the business is sued. However, if you operate your business under a name other than the one on your incorporation paperwork and fail to file, those legal safeguards will be lost.
So, if you’ve incorporated as David’s Cosmetics Inc. and signed a contract with a client as David’s Skincare Solutions without registering the latter as your DBA, the contract will be null and void.
And, while a DBA does not offer you legal protection, it does help to isolate you from your business. If your company is sued, you might present your DBA as proof that your company and its assets are distinct from you and your assets.
Furthermore, some clients may demand a DBA to contract with you, and some business lenders may require one before granting any small-business loans to your company.
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provides opportunities for growth
Using a DBA allows organizations to operate several enterprises under one ownership without registering a new company entity each time they expand. If you expect your original enterprise to grow into many websites, stores, services, restaurants, etc., you need to register each under a separate DBA name.
To avoid costly penalties, if your company extends to other states, you must file a foreign qualification in each new state. The name on your company’s certificate of authorization will be the legal name of your business in the states where you qualify. You must register a DBA in that state to use a different name.
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you need to start a website
You can use a DBA to conduct business under your company’s domain name. This is beneficial if your company name isn’t available as a domain name or you wish to branch out into e-commerce.
it is now easier to register a business name
In the end, submitting a “doing business as” name is the simplest option for sole proprietorships to register their business’s name and establish their enterprises as independent entities from themselves. It’s also reasonably priced.
related: how to apply for a business license
how do I obtain a DBA?
DBA requirements differ from one state to the other. In some states, you must register with the state agency in charge of business registration (typically the Secretary of State).
DBA registration occurs at the city or county level in other states. Some states follow a hybrid method, where sole proprietorships and partnerships register locally, but LLCs and corporations register with the state. In addition, certain types of businesses are exempt from DBA registration in a few states.
DBA filings are typically less than $200. However, some states demand additional processes, such as publishing a notice of the DBA in a newspaper.
Because each state’s requirements vary, it’s recommended to consult official state websites or call the Secretary of State or Business Registration office for more detailed information.
One sometimes missed step is a search of available business names through the Secretary of State’s office (together with a search of accessible website domains and social media identities). This can help guarantee that the intended business name is not already used.
the bottom line
Filing a DBA name isn’t difficult; you must work within your state’s or county’s criteria to do it correctly. It’s usually ideal to do all of this before operating under your planned “doing business as” name, between 30 and 60 days before opening your doors.
You should receive permission within one to four weeks, depending on your jurisdiction. Once your DBA name has been approved, you can begin operating your business, opening your doors, accepting new clients, and opening your business bank account.
After that, ensure you stay compliant by using your business name and checking with your state government offices to see whether you need to renew your license annually.
