A DBA can provide businesses and sole proprietors with an easy and relatively inexpensive way to start a small business without the cost and various complications that come with registering a formally incorporated company. For existing companies, it can provide an opportunity to explore new markets by legally operating under a new name. So, what do you need to know about filing a DBA? 

To start off, what exactly is a DBA?

Depending on which state you are in, a DBA (or Doing Business As) can also be known as your company’s Trade Name, Assumed Name or Fictitious Name. Regardless, the principal of all of these concepts remains the same, it is the operating name that your company uses when doing business. Although a  DBA is not considered a formal legal entity, and the specific regulations around this type of business can vary per state, it offers an opportunity for businesses and sole proprietors to formally operate under their chosen name. 

Who can file a DBA?

Any sole proprietor, LLC or partnership is able to file for a DBA and it can offer a multitude of benefits for many companies. For LLC’s (Limited Liability Company) and other partnerships, a DBA can offer the company an opportunity to trial out new business ideas and a chance to appeal to new and more specialised markets while still protecting their original brand value. For sole proprietors wishing to legally operate their business under a different name than their own personal name, they can use a DBA to maintain a necessary separation of personal and business operations, bank accounts and other key areas of business. 

 

What are the key components of a DBA to consider before you file?

Choosing the right name.

Ensuring that you have chosen the right name for your business is a crucial element of a successful future business operation for two main reasons. It is advisable that when choosing your name, you should choose three or four possible options, and then conduct a search on the U.S. Trademark Electronic Search System to make sure that your name has not already been registered. You should then conduct a domain name search to ensure that, when you wish to begin your operations, your domain name will be available. Once you have registered your company we recommend that you apply to trademark your company name to protect your brand and company. 

Which jurisdiction are you going to register your company in?

It is important to fully research your particular state and jurisdiction requirements before registering your DBA. In some states like New York, all companies are required to register a DBA for their business, regardless of what kind of business, while in other states the laws are more relaxed. 

Often you will find that DBAs can easily be registered online, while in particular states the process can be more complex and you are required to register with multiple levels of government. DBA’s are also only valid in the jurisdiction in which they are registered and a DBA are not considered valid when doing business in another area or state. 

Legal protection.

As mentioned earlier, DBA’s do not provide any kind of personal liability protection. If your DBA is operating as an extension of an LLC, then your personal property will already enjoy limited personal liability protection. However as a sole proprietor, this is something you will need to very seriously consider and before commencing operations. It is vital that you have sound legal advice available and have taken all the necessary precautions to prevent any liability claims. 

 

Financial and tax implications.

All tax paid to the IRS will be via your own personal tax return. Should you wish to receive the same tax benefits as a fully incorporated company, you will have to formally register your company as such. A DBA does, however, allow you to register a bank account under your business name which is important when it comes to and you can apply for credit (still linked to your personal/incorporated business credit score) which can both be key aspects of a successful start-up.  

 

What steps do you need to take to file a DBA?

 

To file a DBA, you will need to conduct all the necessary research and choose which state your DBA will be operating in, research and carefully select your business name, file with your county clerk’s office, state or register online if you are able. After your DBA has been registered, it is optional (but recommended) that you apply to trademark your business name. For a more detailed, step-by-step guide to filing your DBA, visit this site.