DBA – Doing Business As –

This is great info – many of us Small Business Entrepreneurs are Sole Proprietors – or we have formed an LLC – here is information that will help you determine if you need to file a DBA

Definition of DBA – “Doing Business As” 

• DBA is necessary if your business operates under a name other than its “Legal Name”.    (Certain jurisdictions may also use the terms “Fictitious business name, trade name, assumed name.” For a corporation, LLC, or other state-registered entity, the legal name is the name on the filed articles so, if you want your corporation or LLC wants to operate under a different name, you must file a DBA registration.
• For all other business structures, such as a sole proprietorship or partnership, the legal name is the personal name of the business owner or owners. Conducting business and opening a bank account under any name other than your legal business name is only possible after fulfilling your state’s DBA filing requirement.
• Reasons to get a DBA:  Name recognition is crucial to a company’s success. Therefore, it is important to make the name you choose official. Name acknowledgement is achieved when the business name is used in all transactions, from marketing and sales to collecting money. Many business owners choose a name other than their given personal name in order to establish name recognition and to identify goods sold or services provided. Unless you operate a corporation or LLC, you will not be able to receive money or hold a business bank account under a business name until you have filed, and, when applicable, published what is commonly referred to as a DBA.
• Uses for a DBA:The most significant use of a DBA is the ability for a sole proprietorship to open a business bank account and collect money using a name other than its legal name.   In many cases, more than one business can operate under the same DBA. There is no protection or exclusivity offered by operating solely under a “doing business as” name. When registering your DBA, you may also find a corporation, LLC, sole proprietorship or other business entity using the same or a similar business name.
• Requirements for a DBA:In most states, you must file your DBA statement before using your DBA in the operation of your business. In some cases, it must be filed within 30-40 days of your first business transaction. In addition, several states require that you publish your DBA statement in a local newspaper, and then file proof of publication with the proper government office. The purpose of the publication requirement is to ensure the public is informed of new businesses in the area, their legal name and ownership.
• Restrictions on DBA Names:A DBA for a sole proprietorship or general partnership may not contain any word or corporate ending implying it is anything other than a DBA. For example, if Joe Smith operates a sole proprietorship under “ABC Plumbing,” he cannot file a DBA as “ABC Plumbing, Inc.” Using a corporation or LLC ending requires forming such an organization with the appropriate state agency.
• Advantages of a DBA:  When you are starting up, you definitely want to keep costs low and the process simple. Filing for a DBA helps you to do that. You do not have the ongoing record keeping requirements and other formalities of maintaining a corporation or LLC, or the costs associated with forming a corporation or LLC. Once your business is running profitably, you may want to convert it to a corporation or LLC.
• Disadvantages of a DBA:One of the main disadvantages of operating a sole proprietorship or partnership with a DBA, as opposed to forming an LLC or corporation is that you do not have liability protection as a sole proprietorship or partnership. You will be personally liable for the debts of your business. Additionally, you will not have exclusive rights to your business name. In many states and counties, anyone can register any DBA.

Definition of a Corporation:

A corporation is a legal entity created under state law that can open a bank account, purchase property, enter into contracts and operate a business. One of the most important features of a corporation is that its owners are generally not personally liable for the debts of the corporation.

Definition of an LLC:

A limited liability company, or LLC, is a legal entity created under state law that has characteristics of both a corporation and a partnership. Like a corporation, the owners of an LLC are not personally liable for business debts. Like a sole proprietorship and partnership, an LLC has operating flexibility and its owners may elect to have it treated as a pass-through entity for tax purposes. This means that LLC profits are passed through and taxable to the owners of the LLC.

DBA’s are sometime’s misunderstood – click on the link below for additional information

Information on DBA’s  taken from “Legal Zoom” 

Topic:  DBA – Doing Business As –