What is A DBA?
A DBA is a “doing business as” name, also referred to as a trade name, fictitious name, or assumed name. Basically, it is a business registration that allows the business owner to conduct business under a different business name. Filing a DBA is a common practice amongst business owners. However, the reasons for filing a DBA can vary depending on the business need. So here are some common reasons below why business owners file DBAs:
Using a business name other than your personal name – This is common in the case of a sole proprietorship or a partnership in which the business name and the owner’s personal name are one in the same. In registering a DBA, a small business owner does not incur the cost of incorporation or forming a Limited Liability Company. It also allows you to operate your company under a DBA name rather than your personal name.
Business Bank Account – If you did not incorporate or form an LLC for your business, your bank may require a DBA in order to open a business bank account.
Corporation or Limited Liability Company – Corporations and LLCs file a DBA when they plan to conduct business under a different name. There are a few reasons why this is done. One would be if you have decided to start a new business that you want to keep separate from the one you have incorporated. This is also done for business owners who plan on operating multiple businesses. An example of an existing entity filing a DBA would be the following scenario. You incorporated a boutique but now want to offer consulting services. Since the businesses and business plans are substantially different, you want to segregate them without incurring the cost of incorporating another company. Registering a DBA allows you to do this.
Franchise Owners – Franchise owners commonly file DBAs to establish the identity of their local business. An example of this is an owner of a local McDonald’s franchise. The franchise owner may have incorporated their business as ABC Enterprises Inc. but also filed the DBA name as McDonald’s. In this case, the entire corporate name would be ABC Enterprises Inc., DBA McDonald’s.
Process of Filing a DBA
Now you have a few scenarios why a business owner would file a DBA. As with any business registration, there is a process associated with filing a DBA name such as an application filing and fees. Filing fees tend to be nominal amounts. Typically, you file a DBA registration at the local or county level. However, in some cases, you will need to file the paperwork with your local courthouse or your state. Be sure to review the requirements in your area.
You should be aware that filing for a DBA is not the same process as filing for a trademark. A DBA is a business registration and does not necessarily provide a business with name protection. Always conduct due diligence and research existing business names in your areas before choosing your business name.
Whether you are a sole proprietor, partnership, or a corporate entity, filing a DBA can be a key role in establishing your business’ brand and identity. It can be a crucial step in your business’ success.