If you’re starting a business, you may decide to form a limited liability company (LLC). You’ll choose a name for your LLC, but you may want to do business under a different name. If so, you’ll need to register a “doing business as”, or DBA, name.
Simply put, it’s a name registered for a company to do business under that’s not its legal business name. For example, you may have an LLC called “Smith Enterprises”, but you do business under the name “Smith’s T-Shirts”. A DBA name is also sometimes called a fictitious name or a trade name.
An LLC is a business entity that offers liability protection for owners, as well as pass-through taxation, much like a sole proprietorship. To learn more about LLCs, read this Step By Step article.
DBA vs. LLC
Entrepreneurs sometimes think that a DBA is a business structure like an LLC. Registering a name to do business under does not, however, create an LLC.
Forming an LLC, which is a simple process laid out in this Step By Step article, creates a formal legal entity for your business. It is more expensive and time-consuming to form an LLC than to just have a sole proprietorship, but with an LLC you have personal liability protection, and you can choose how you want your company to be taxed. You can be taxed as a sole proprietorship, a corporation, or a partnership.
How to File a DBA Name
Filing requirements for a DBA vary by state, county, and city, and also by business structure. Check with governments in your area to find out what and where you need to file. Fees generally do not exceed $100, and you can usually file online.
In some states, you may have to place an ad in a local newspaper to announce your intention to use the name and run the ad for a certain period of time. This is to fulfill public notice requirements in those states.
You can do searches in your area to make sure that the name you’ve chosen isn’t already being used. Your state’s website is a good place to start.
If you are an LLC and operate under a name that is not your LLC name that you have not registered as a DBA, you can face significant fines. In some states, you may have to renew your name registration periodically, so make sure you stay on top of the time frames and stay in compliance.
Benefits of a DBA
Many companies choose to use a DBA because it provides benefits to the business.
- You can choose any name and build your brand. Most DBAs are filed by sole proprietorships so they can do business under a name that is not their own, and build a brand with a name that is associated with what the business offers. LLCs choose DBAs usually so that they can brand all of their product lines. “Smith Enterprises LLC” might have multiple DBAs such as “Smith’s T-Shirts” and “Smith’s Shoes”.
- Your bank accounts can have your business name. If you have a registered DBA name as an LLC, customers or others can make payments to your DBA name. This means that you can keep your business finances for each of your DBAs separate for accounting purposes.
- You can scale your business. You can have DBAs for any business that you want to operate under your LLC, so you can grow and diversify with names that identify each part of your business.
What a DBA Does Not Do
- A DBA, again, is not an official business structure or entity and gives you none of the benefits and protections of an LLC or corporation.
- A DBA does not protect your name, generally, from being used by other companies. If you have an LLC, no one else in your state can use your LLC name. The only way to protect your name throughout the country is to trademark your name.
DBAs have many benefits, and they are simple and inexpensive to file. If you have an LLC, a DBA name can help you to expand your business into new product lines.
Regardless of your reasons for choosing a DBA, just be sure to follow the rules, choose your name wisely, and take steps to protect it. Then grow your business and make your name the next Google!