What Is a DBA?
As you establish your business, you may come across mentions of a DBA, an abbreviation for a “doing business as”; you may also see a DBA name referred to as a fictitious name, a trade name, or an assumed name. Much like it implies, a DBA name is used by businesses who want to interact with the public under a different name than the one registered with the state.
Using a DBA name for your business may have several personal and business-related benefits, the most important of which we will discuss below. We’ll also answer frequently asked questions about DBA names and provide pointers on how to register your own DBA name.
The Purpose of a DBA
As mentioned above, a DBA name is used by a business entity or sole proprietorship to interact with the public in place of the entity’s legally registered name. This can be done for a number of reasons, but the most common is branding or marketing purposes; oftentimes, a business is registered under one overarching name with a DBA name used to make distinctions among off-shooting businesses.
A DBA name can also be used to market your business entity in a different way to customers. This is especially helpful if you are a sole proprietor and use your name on business legal documents, but you want a more industry-specific name for the public.
Lastly, many individuals choose to register a DBA name for the sake of privacy. Because the DBA name takes the place of your entity’s formally registered name on most documents, including bank applications, this gives another level of privacy when running your business and can even improve your corporate veil.
Does My Business Need a DBA?
A DBA name is not a legal requirement, but you may want to register one anyway, depending on your business type. Many individuals choose to register a DBA name when they want to branch into other industries or services underneath their overarching business. Others choose to use DBA names to brand themselves differently to customers, something that is helpful for a sole proprietorship.
Whatever you choose, it is important to understand the benefits of using a DBA name and what it may offer your business. We discuss this further below.
The Benefits of Using a DBA
There are several important benefits that you can receive by using a DBA name for your business.
Privacy
When you use a DBA name, it means this name is displayed publicly and used on financial applications for your business. This gives you an increased level of privacy and protects your formally registered business name from being shown to the public. If you have a sole proprietorship, using a DBA name gives you an extra level of privacy in that you won’t need to use your name on business applications or documentation.
Branding and Reputation
Once you register your business entity’s formal name with the state, you may want to use something a little catchier or on-brand to advertise your business. A DBA name can help you with this as most states allow you to choose something industry-specific; you can register a DBA that speaks more to your business type and formally registers your entity’s name as something more professional or reserved.
Business Financing
This step is especially important if you are running a sole proprietorship or have your business entity formally registered under your own name. When you use a DBA name, you can put it down on applications for business finances and accept payments made out to your business’s name. This improves trust in your business because the DBA marks your entity as a separate operating business. It may be easier to secure business financing and reputation among customers or business services with a DBA name.
Expanded Business Structure
When it comes to business structures such as LLCs and corporations, a DBA name can help you expand your business without causing confusion or conflict. Underneath the overarching business, you may adopt a DBA name for a separate product line or industry that you are expanding into. A DBA name makes it easier for customers to recognize this as a separate business and for you to market your product or service to a different audience.
You can read a little more about this process here.
How Do You Register a DBA?
Registering a DBA name is a state-specific process, but there are some general items that may be required of you when you register your DBA.
First, many states require that the DBA name you choose is unique and doesn’t infringe on any other business’s name. The state may provide a search tool to ensure this doesn’t happen, and the process of searching for the name is much like the one you follow to choose your business’s formal registered name.
Once you have chosen your DBA name, you likely need to file an application for trade name, fictitious name or assumed name with the state. Depending on your state, this form may be filed online or through the mail. It may also be free to file or carry a filing fee that ranges from $10 to $100.
That said, some states allow you to start using your DBA name without registering it; registration is only required if you want other businesses to know that you are using a specific name but may not reserve the name for your personal use.
Be sure to check with your state’s Secretary of State office or other business resource websites to find out the exact process and filing requirements for your DBA name.
DBA Name FAQs
These frequently asked questions about DBA names may shed some more light on your decision to register or not.
Is a DBA a Separate Legal Entity?
During the first steps of establishing your business, it is easy to get confused by all the terms and abbreviations being thrown around. Many individuals wonder if a DBA is a type of separate legal business entity similar to an LLC; but it is not. A DBA is a registered fictitious name that your business will conduct operations under even though there is a different formally registered name on file with the state.
How Much Does It Cost to Register a DBA?
How much it costs to register your DBA depends on the state you are setting the name up in. Some states allow you to start using the name without filing any type of registration, while others require you to file documentation and pay a fee ranging from $10 to $100. You may also be required to publish notice of your new DBA name in a newspaper or local publication, which can add to the cost of establishing your DBA name.
How Should You Write a DBA Name?
When registering your DBA name, you should write it exactly as you intend to use it. Ensure that your name is spelled correctly and that it adheres to state regulations regarding naming rules and infringement on other names before officially registering it.
You can change your DBA name once you have filed for it, but this may mean another round of paperwork and more filing fees. Writing your name correctly and meeting all the rules the first time can save you stress down the line.
How Long Does a DBA Last?
How long your DBA is registered for depends on state-specific rules. Some states allow your DBA name to remain valid for up to 5 years at a time, while others require you to refile every year or every other year. Be sure to check with your Secretary of State or other business resource website to ensure you are meeting all filing regulations.
What Can a DBA Not Do?
Your DBA name can bring many benefits, but it cannot grant you additional legal protections. Your business entity (such as an LLC or a corporation) can provide you with certain asset protections and define your business as a separately operating entity. While your DBA name can reinforce this distinction, it does not grant you additional protections or remove your personal assets from liability.
Is There a Difference Between LLC and DBA?
As mentioned above, there is a major difference between an LLC and a DBA: an LLC is a separately operating business entity, and a DBA is a registered name that an LLC or other business entity can choose to register.
You can operate an LLC or other business type without registering a DBA name if you so choose, but you cannot use a DBA name in place of a formal business entity as it does not provide legal business protections.
Finding the Best Name for Your Business
A “doing business as” name can be an ideal choice for your business, especially if you want to expand your business’s structure, gain more privacy, or market your business to customers in a certain way. Make sure when choosing whether to register a DBA that you understand its benefits and what it can do. You also need to ensure that you are adhering to all state naming and filing rules before you use your DBA name. Do this and you are sure to find the best name for your business in no time.