What you need to know about a DBA
DBA stands for Doing Business As and is also known as a fictitious name, trade name or assumed name depending on the state. In brief, a DBA is a name that a business operates under that is different from its legal name.
A DBA is not a separate legal entity nor does it provide any asset protection and must be attached to a legal business entity such as an LLC or corporation, a sole proprietorship or a general partnership.
The practical aspects of filing a DBA
Filing a doing business as application is pretty straightforward and inexpensive. A doing business as application, depending on the state, may need to be filed on just a state level or county level or even on both government levels. In some states you cannot even file for a DBA such as Kansas, New Mexico and North Carolina. And in some states such as the state of New York a general partnership is required to file a doing business as application in order to operate.
After you have sorted out the government level of involvement in the application process according to your states requirements you then need to pay a fee that is anywhere from $ 10 up to $ 100. Apart from the application and fee payment, you need to comply with the publication requirements meaning that you may need to publish in a newspaper that you are creating a DBA, notifying the public that you are now operating under this assumed name.
TRUiC offers some pretty good DBA filing tips you should take the time to study before you decide to file your doing business as application.
Reasons to file a DBA:
· For privacy reasons – to protect the names of the individuals such as in a general partnership
· For branding and marketing purposes – you can expand your company’s scope of business by creating separate DBAs under one LLC thus promoting specific products and/or services
· For banking purposes – you can accept payments and open bank accounts under your doing business as name.
· For credibility reasons – if you are a sole proprietor or a general partnership by using a business name other than your own personal name you can increase your businesses professionalism
· To enhance online presence – if your domain name doesn’t match your registered legal business name then you can use a doing business as name to fill this gap and avoid creating any confusion to your customers by having a name that you can operate with that is the same as your domain name. This can also help establish better brand awareness that can in turn help you better market your products and services to your customers.
When you need to file a DBA
· If you are operating as an LLC or corporation or other business entity but you are doing business under a different name than what the LLC or corporation is registered as then you need to file a DBA
· If you are operating as a sole proprietor and using a different name than your own personal name
· When you operate multiple businesses under an LLC each business will need to have its own trade name but they are all connected to the one same legal entity that of the LLC.
Keep in mind that you do not need different operating agreements or tax id numbers or separate EINs for each of your DBAs. The LLC or other legal entities that these trade names are operating under is the only entity that needs to have a tax number, EIN (Employer Identification Number) and operating agreements, your trade name will always be attached to these entities.