If you’ve often heard the term DBA doing the rounds in business, here’s all you need to know about it. DBA literally stands for “doing business as.”
A company is said to be ‘DBA’ or ‘doing business as’ when they operate their business under a name different from its legal registered name. Some states require this fictitious name filing because they need to protect the consumers who conduct business with the entity.
Often called a “trade name,” “fictitious name” or “assumed name,” having a DBA allows you to conduct business under a name other than your own legal name (or registered business name). Whether you’re starting a sole proprietorship or a partnership, you can choose a business name or dba (“doing business as”) for your business.
Do you really need a DBA?
Remember, a DBA is not really required to form an LLC. DBA is required only under the following conditions.
Sole Proprietorships and Partnerships
For a sole proprietorship or general partnership, you will have to file a DBA in order to make your company operate with a name that’s not your full or legal name. Adopting a DBA is especially very useful for sole proprietorships. Sole props and GPs are unincorporated, and they don’t have to file a business entity name, with the state. So unless they file a DBA, they and their business are one in the same entity and have the same name too.
When a business needs an alternate name for a specific line of their business, DBA can be filed. By doing so, the corporation doesn’t have to fully form and register a whole new business just to operate under a different name. For example, Andy’s business called Ansy’s HealthCare Inc. might be looking for a new name for their new line of Keto products, “Ansy’s Keto Foods.” Thus their business is saved of both the money and time it takes to launch a whole new business under an additional LLC or corporation. This would allow them to promote the business as a Keto based store and accept payments under the name “Ansy’s Keto Foods.”
How Do You Get a DBA?
To do business under a DBA, you need to file the appropriate paperwork and pay a filing fee. The DBA filing process varies significantly from state to state. In some states, you need to register your DBA with the State Secretary of State or other state agency. In many states, you can apply through the local county clerk’s office. The filing fee is between $10 and $100. You should also publish notice of the DBA in a local newspaper.
There may be many reasons why business owners decide to file a DBA. However, what motivates a sole proprietor to file a DBA, may be different from what motivates a corporation or LLC.