Do I Need a DBA (Doing Business As)

What does DBA mean?

DBA stands for “doing business as.” It’s also referred to as your business’s assumed, trade or fictitious name. A DBA allows you to conduct business under a name other than your own; your DBA is different from your name, as the business owner, or your business’s legal, registered name. That’s because when you form a business, the legal name of the business defaults to the name of the person or entity that owns the business. That is, unless you register your business as a certain legal entity (more on that below), or if you rename and register your business with a DBA. Let’s look at an example. 

Your name is Maria Smith and you are starting your life coaching business as a sole proprietor, therefore your business will operate under your own name, unless you, Maria Smith, choose to register your DBA name as “Maria’s Life Coaching Academy.” After registering your DBA, your full name, Maria Smith isn’t legally attached to your business’s name anymore, even though, you are still the one filing taxes and carrying all the liability for the business. Your business operates under a different name legally and in the eye of the public. 

Which businesses need a DBA?

Not all businesses need a DBA. It depends on a combination of the business’s legal entity, the local requirements and the business owner’s preference.

Sole proprietorships and partnerships

If you’re a sole proprietor or in a general partnership, you’ll need to file a DBA if you want your company to operate under a name that’s not your or your business partner’s full, legal name. That’s because sole proprietorships and general partnerships are unincorporated, and they don’t need to file entity formation papers or a business entity name with the state. (Although Sole Proprietors and Partnerships still need to acquire the necessary business licenses and permits.)

Limited Partnerships, LLCs and Corporations can choose a DBA, but  don’t have to. 

Unless the state, city or county requires it, corporations (both S corporations and C corporations), limited partnerships and limited liability companies, or LLCs, technically don’t need to file a “doing business as” name. Unlike sole proprietorships and general partnerships, these business types have already registered their entity and business names with the state. However, any business formed under one of these entities still has the option to register a DBA name. If you have an LLC, already registered with the state, why would you consider a DBA? 

Simply because this would allow you to do business under a name other than the name on your business documents. The most common reason a corporation or LLC would register a DBA name is when the business wants an alternate name for a specific line of their business. By filing a name for a new branch of the business, the corporation doesn’t have to form a whole new business just to operate under a different name. For example, Jessica’s health and nutrition coaching business “Healthy and Happy Inc.” might want to have a separate name for its upcoming homemade keto foods line, “Keto with Jes.” This saves an expanding business both the money and time it takes to launch a whole new business under an additional LLC or corporation.

If you register a DBA without first forming some type of legal entity, your state will automatically recognize your business as a sole proprietorship.

How to file a DBA name

DBA requirements vary by state, county, city and business structure, but in general, registering a DBA comes with paperwork and filing fees anywhere from $10 to $100. You’ll either go to your county clerk’s office to file your paperwork or you’ll do so with your state government.

In some states, you might also have to place a fictitious name ad in a local newspaper for a certain amount of time. This fulfills the “public notice” requirement for some states — giving the local area an official announcement of your business name.

One logistical restriction to note: Your “doing business as” name can’t have a corporate ending such as “Inc,” “LLC,” or “Corp.” That gives the impression that your business is a corporation or has some type of corporate status when it doesn’t. 

Other than that, there aren’t any restrictions on what you can file for a DBA name. It’s probably best to do a simple business name search within your jurisdiction to make sure no other business has your DBA name.

Now that you know how to file a DBA, let’s explore a handful of need-to-know tips about DBAs:

• In order to get a DBA as an LLC or corporation, you typically need to provide a certificate of good standing.
• Some states allow you to pay online, while others may require a money order or cashier’s check. In addition, some states will allow you to file your paperwork online, and others want notarized documents.
• If you operate under an assumed name that has not been registered, you can get hit with big fines from your state regulatory agency.
• In many states, you must renew after a set amount of time. Be sure to stay on top of when you must renew your DBA, as letting it lapse can have a severe impact on your business from a marketing perspective.
• Certain states also require you to file a new DBA if the information provided in the original filing changes, such as a change in officers (for a corporation), partners (for a general partnership), or members (for an LLC). Note that in some states, you can simply file an amendment under these circumstances.
• In most cases, it is not necessary to hire a business attorney to help you file a request for a DBA. The process is simple enough that most business owners can handle it on their own. However, if you’re confused about the process or have a more complicated business situation, it’s always a good idea to seek professional help.

Let’s go over the advantages of filing a DBA: 

You should file a DBA if you don’t want to operate under your own name or the name under which your business is legally registered. There are a few crucial reasons why you should consider registering a DBA name.

Makes business banking much easier

We recommend that every business owner opens a business bank account, separate from their personal bank account. That’s because separating your business and personal finances will protect your personal assets in case of a lawsuit, preserve your personal credit score if your business fails, make your bookkeeping and taxes that much easier and generally make you look more professional in the eyes of your clients (and small-business lenders).

If you are operating a sole proprietorship or general partnership, and you haven’t registered your business with the state, you won’t have an employer identification number, or EIN. Without an EIN, you can’t open a business bank account. When you file a DBA, you’ll also get an EIN.

Keeps your business legally compliant

Owners of LLCs or corporations have certain legal protections such as safeguarding the owner’s personal assets if the business is sued. But if you operate your business under a name other than what’s on your incorporation documents and didn’t file for a DBA, those legal protections won’t apply to the alternative name. For example: if you’re incorporated as ‘Healthy and Happy Inc.’ and sign a contract with a client as “Keto with Jes”, without registering the latter as your DBA, that contract won’t have the protections provided under your legal entity name.

Although a DBA doesn’t provide you with legal protections in and of itself, it does further separate you from your business. In the unlikely scenario that your business is sued, for instance, you could offer up your DBA as evidence that your business and its assets are an entity separate from you and your personal assets.

Additionally, some clients might require that you have a DBA, in order to contract with you. Some business lenders might require that you have a DBA before extending any small-business loans to your business.

Your name defines your brand

Your brand name is the public’s first impression of your business. Ideally, your business’s name should reflect your product or service, and give people a reason to become paying customers. If sole proprietor Maria Smith kept her business’s name as just “Maria Smith,” who would know what she offered until they talked to her? If Maria is just using her name, why would potential customers feel compelled to talk to her at all?

Choosing the perfect name for your business before you’ve even opened your doors can be hard, though. When your business is in its infancy, who knows where you’ll be in five years? If you’re struggling to come up with an awesome name to file as a DBA, you can try a business name generator for a little inspiration.

Registering a DBA allows businesses to operate multiple firms under one ownership, without having to form a separate business entity each time they expand. If your hope is that your original venture will expand into multiple websites, stores, services, restaurants and so on, you’ll want to register each under a separate DBA name.

Note that if your business expands to other states, you’ll need to file a foreign qualification in each new state to avoid steep penalties. Your business’s legal name in the states where you qualify, will be the name on your company’s certificate of authority. If you want to use a different name, you’ll have to register a DBA in that state.

You want to launch a website

You can file a DBA in order to transact business under your company’s domain name. This is especially useful in the event your company name is not available as a domain name, or if you want to expand your business into e-commerce.

Easier to register a business name

When it comes down to it, filing a “doing business as” name is the easiest way for sole proprietorships to register their business’s name and establish their businesses as entities separate from themselves. It’s also relatively inexpensive.

The bottom line

Filing a DBA name isn’t difficult — you just need to work within your state or county’s regulatory requirements to obtain your DBA. It’s usually best to get this all done before you operate under your intended “doing business as” name; somewhere between 30 and 60 days before you open your doors.

You’ll usually hear back with approval in one to four weeks, depending on your jurisdiction. Once you’ve been approved for your DBA name, you’re all set to start operating your business under that name— meaning you can open your doors, take on new clients and set up your business bank account.

After that, make sure you’re staying compliant by operating under your business name and check with your state’s business regulatory office to see if you need an annual renewal.

Author: Sanda Kruger

Sanda is an entrepreneur, real estate investor, health coach and professional dancer. Sanda is an entrepreneur with more than 20-year experience in business development and project management in the fields of life, health and fitness coaching. She is also a real estate investor and a banker, who learned outstanding adapted business strategies, sales and marketing techniques, communication, and goal setting skills, hands-on, through life and work experiences. She is a certified fitness professional and is the creator of two original fitness programs, called BellyCore® Fitness and AquaCor®.