“Doing business as” or a DBA is the name you choose for your business by which it will be known to the public. According to the US Small Business Administration, this name can be different from the legal name of your business, no matter what business structure you opt for. In most states, you are required to register your DBA even though registering the assumed name doesn’t provide legal protection for unincorporated businesses.
Reasons for using a DBA
Unincorporated businesses like general partnerships and sole proprietorships prefer to operate with a DBA. This allows them to create a brand or marketing identity that separates them from their personal name. However, in the eyes of the law, this is not the same as a corporate structure.
Incorporated businesses like LLCs and corporations can also register a DBA if they want to use a different business name than the name they have filed with the state. This allows them to operate multiple businesses without the need to create separate legal entities for each one. By filing for a DBA within their existing entity, there is a smaller cost and less paperwork than creating a separate legal entity each time.
Added benefits of using a DBA for legal business entities
In conjunction with an existing legal structure, a DBA offers some serious benefits for any business. These benefits will help your business thrive and grow.
If you run your business as a sole proprietor, a DBA gives it added credibility by making it official, especially if you don’t want to use your own name. It immediately separates you from your business and gives you more marketing opportunities. One of the biggest benefits of registering a DBA for unincorporated businesses is that it allows you to receive an Employer Identification Number (EIN). This automatically permits you to open a bank account in your business name, helping to protect your personal assets. A business banking account lets you maintain your personal credit score, no matter how your business performs.
A DBA helps with business expansion. If you are already using the original legal name of your business in markets you want to expand into, a DBA allows you to solve the problem of state laws requiring that every business operates with a distinguishable name. Even within your state, a DBA allows you to operate in multiple locations by giving each location its own name.
You can take advantage of using a DBA in conjunction with your LLC. Despite using a DBA, you cannot lose your liability protection, but can still market your business under the different name you have chosen.
Filing for a DBA
The requirements for filing for a DBA do vary from one state to the other, and sometimes from county to county. However, the basics of applying for one remain the same.
In most states, you must register for a DBA with the State Secretary of the State or some other state agency. The forms and fees vary slightly from one agency to the other, but Incorporation Rocket offers information about the paperwork required for each state. In some states, a business is also required to publish a notice announcing the information and proof of submission to the public in the local newspaper.
Filing for a DBA is a straightforward process. Business formation services can also help you deal with your DBA registration if you feel you don’t have the time. It can take up to a month before you get approval, but once approved, you can operate your business under its new name.
Remember: In the US, a DBA must be filed before you can conduct business under that name. There are some areas allowing businesses to continue for a short time before filing for a DBA, but it’s best to do it sooner rather than later to avoid delays.
Final take
A DBA is a distinguishable name that allows your business the flexibility to expand within and without your state. With it, your small business can use its name in contracts and qualifies for a business bank account. If you have an LLC or corporation, a DBA offers you a more efficient way to expand. Take advantage of its benefits and affordability to give your business the legal standing it deserves.
