DBAs: Everything You Need to Know - LLC.org

As a limited liability company (LLC) business owner, your initial concern is to ensure that your business name is in compliance with the rules and regulations of your state. These are usually standard formalities, such as ensuring that the name of your LLC isn’t too similar to another registered business. However, there may be times when you would like to conduct business under a name other than your LLC’s official name. If this is the case, you’ll need to file a DBA (Doing Business As). In this article, we’ll discuss what a DBA is and how it works in order to help you decide whether or not you need one for your LLC.
A DBA (doing business as) is a name that a person or entity uses to conduct business that isn’t their legal, registered name. It’s an assumed name or fictitious name. The person or entity named in the DBA isn’t doing business under any other name.
It is a legal term for any trade name, fictitious name or assumed name a business may use that’s different from its legal, registered name.
Sometimes, a DBA lets you operate under a name that better describes what your business does than its official registered name does; other times, it lets you operate under a completely different name.
A DBA might be used by a small business like a sole proprietorship or a general partnership. A corporation or limited liability company (LLC) can also have a DBA.
In some states, corporations and LLCs that use trade names may need to register each one with the state.
A DBA isn’t compulsory by law, but it can be useful in certain circumstances.
A DBA is most often used if you want to branch out into new products or services. For example, if you started a business making custom suits, but now you want to expand into shirts and shoes, you can use a DBA to easily brand those new products under your existing company name.
If you want to branch out into new products or services and don’t want to register a separate business for each one. This can be useful especially if you are an entrepreneur just getting started, but expect to add more products or services as your brand grows.
A DBA is also useful if you have an unregistered business that you want to operate under a name other than your personal name. You can’t legally misrepresent yourself as an incorporated or registered business to customers, but if you’re just starting out and don’t have the money or desire to register as a corporation or LLC yet, a DBA lets you conduct business under a separate name.
This should be reserved for businesses with low risk. Business owners might confuse a DBA by thinking having a DBA means it absolves an unlimited liability type of business from their obligations. Keep in mind though that sole proprietors will still have personal liability stakes, no matter the assumed business name. A DBA filing does not provide liability protection for your personal assets.
All it does is give your business a new name to be recognized by.
For example, let’s say that you are a startup and you have an unregistered tutoring business that primarily serves elementary school students. You may want to consider using a name like “Fun with Math Tutoring.”
This is more likely to catch the attention of parents than “Jane Smith Tutoring,” which could be interpreted as just another tutoring service.
The benefits of having a DBA vary depending on the nature of your legal entity and its business structure.
When a business is registered with a DBA name, this name is used for all the business transactions, marketing and branding. The customers are aware that the business has a DBA company name, but this does not change the actual legal name of the company.
A DBA allows you to brand multiple products and services under a single umbrella company.
Say you start out selling homemade all-natural dog treats at local markets and pet stores, and have great success with your first product line. Later on, you decide to expand into other pet products such as catnip toys and canned food.
With a DBA, you can create unique brand names for each new product line while keeping all sales under one company name.
A DBA also gives the illusion of having more than one location. This can be beneficial for businesses such as law firms, restaurants and retail stores who may wish to have more than one location but do not wish to incorporate each location as its own entity.
Second, registering a DBA allows you to maintain more privacy when it comes to running your business. When you register a DBA all of the records remain public but they do not include any information about who owns the company or who the partners are.
This means that only those who need to know who owns the company will have access to this information (e.g., the IRS or creditors).
When you have a DBA registration on file with the state, you have an easier time opening up small business banking accounts.
Most banks require that all businesses register their DBA before allowing them to create a new account. This provides protection for the bank, because if anything goes wrong with the new account it will be easier for them to track down exactly who is responsible for the issues.
By registering a DBA for your business, you may find it easier to obtain financing and credit for your business as it boosts business branding and credibility in comparison to providing just the small business owners names for the bank business account.
If you’re forming an LLC, the benefits of privacy and having easier access to a business banking account are a given as they come under the structure of the separate legal entity itself.
The main benefit for LLCs thus comes in the form of creating multiple brand names instead of sticking to one during company expansion. Also, if you want to operate under a fictitious business name that’s different from your main legal business name.
The specific steps to file a DBA, as well as the filing fees, vary at the state level. However, the general process remains the same. There are three esse