Starting an LLC can be a rewarding but complex process, particularly when it comes to navigating the legal intricacies of establishing a business entity. Choosing the appropriate formation structure, such as a Limited Liability Company (LLC), is imperative for prospective business owners. However, other considerations must be made, such as filing a ‘Doing Business As‘ alias, aka DBA. But what exactly does it mean to file a DBA when forming an LLC, and what are the steps to accomplish it?
In this article, Webinarcare Editorial Team will make you understand how DBA works and how it will help our future business venture.
On this page, you’ll learn about the following:
Understanding DBA “Doing-Business-As”
First, let’s begin with understanding the term. DBA, an acronym for ‘Doing Business As,’ allows a company to operate under a name different from its originally registered name. In other words, it is essentially a fictional name for the business, sometimes referred to as a trade name, assumed name, or fictitious business name.
For instance, if John Doe registers a company named ‘John’s Tech Solutions, LLC‘ but wants to operate under ‘Innovative Tech,’ John would need to file a DBA. Once the DBA is legally registered, John can conduct business under the ‘Innovative Tech’ name while maintaining the personal liability protection his LLC formation offers.
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How to File For a DBA?
Filing for a Doing Business As (DBA) allows companies and entrepreneurs to operate under a different name than their original business or personal name. This process, also known as registering a fictitious business name, allows businesses to create a professional image, enhance their brand, and improve customer recognition. The filing process might vary by state or county. Let’s delve deeper into the steps to file for a DBA.
Step 1: Select a Name
Before you file a DBA, you must do Business Name Search to ensure that another business doesn’t already use the name you wish to use. This can usually be done through a database on your local or state government’s website.
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Step 2: Fill Out the Required Paperwork
Once you’ve selected a name, you must complete the necessary forms from the county or state where your main business is located. Fill in the appropriate form to register your DBA. You can typically find these forms on your county or state’s government website or at the county clerk’s office. The form usually asks for information like the business owner’s name, the business’s legal name, and the proposed DBA name.
Step 3: Pay the Filing Fee
The filing fee for a DBA varies by state, but it typically ranges from $10 to $100.
Step 4: Publish a Statement
Many states require companies to publish a statement in a local newspaper about their intent to operate under a DBA. After fulfilling the publication requirement, a proof of publication affidavit will be filed with the county clerk.
Step 5: Register with Required Agencies
Depending on their business type or state regulations, some businesses may need to register their DBA with certain federal or state agencies.
Remember that operating under a DBA does not provide any legal protection for the name; it merely allows you to use it in business transactions. If you want exclusive rights to the name, you should consider pursuing trademark protection. We reviewed the Best Trademark Services that will guide you in pursuing trademarks in your business.
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For What Businesses Can DBA Be Used?
A DBA, or Doing Business As, can be used for both individual entrepreneurs and established businesses, including:
- Sole Proprietorships: These are businesses owned by a single individual. A sole proprietor might use a DBA to give their business a more official, professional persona separate from their personal name.
- Partnerships: A business with more than one owner can operate under a DBA, particularly when their business name doesn’t include the partners’ names or want a name that better represents the business.
- Corporations & LLCs: Although they register with an original business name, they may want to operate under a different name for branding or new business ventures. A DBA allows them to do so without creating a completely new entity.
- Franchises: Franchise businesses often use DBA names, allowing individual locations to tie into a broader corporate identity while identifying the local franchise operator.
When considering a DBA, it’s essential to know that while it allows you to do business under a different name, it doesn’t offer liability protection or any of the legal benefits provided by forming a legal business structure like an LLC or a corporation.
Benefits of a Filing a DBA
Filing a DBA while forming an LLC offers several potential benefits. Here is the list of benefits that will guide you in filing one.
- Business Flexibility: Filing a DBA allows individuals or companies to conduct business under a different name without creating a new business entity.
- Enhanced Credibility: Conducting business under a DBA can enhance credibility with potential customers as it often seems more professional than just using a personal or default company name.
- Branding: A DBA allows businesses to use a more marketable name that aligns with their brand message.
- Privacy: For sole proprietors, a DBA offers privacy protection by not requiring them to use their personal names for business transactions.
- Financial Management: A DBA allows businesses to open a bank account and take payments under the business name, simplifying accounting and tax preparation.
- Expansion Opportunities: Companies can use different DBAs for various parts of their business, making it easier to enter new markets or introduce new product lines.
Remember that the process and impact of filing a DBA might differ by state or country, so always research and consult a legal expert if needed.
FAQs
DBA stands for “Doing Business As.” It permits businesses to operate under a name different from their legal registered name.
Filing a DBA can enhance your business’s credibility, allows for more branding opportunities, offers certain privacy protections, enables you to open a business bank account, and helps expand your business.
The filing process varies by location but generally involves performing a name search, filling out a DBA registration form, paying a fee, and sometimes publishing a notice in a local newspaper.
Typically, you’ll need to file with your local county clerk’s office or the Secretary of State, depending on your local rules.
You’ll usually need to perform a name search on your local or state government’s website.
The cost varies depending on your location but can range from $10 to $100.
A DBA usually allows you to open a business bank account under your DBA name.
Yes, businesses can file for multiple DBAs as needed.
This varies by jurisdiction. In many places, a DBA is good for about five years.
Usually, most states do not allow duplicate business names, including DBAs.
No, a DBA allows you to legally operate under a certain name, while a business license gives you the legal right to operate a business.
No, a DBA doesn’t grant exclusive rights to a business name. For that, you’d need a trademark.
You do not need a DBA if you operate under your own name. However, you should file a DBA if you operate your business under a different name.
Yes, usually, a DBA needs to be renewed every few years, depending on your jurisdiction’s laws.
In some states, you must publish a notice about your DBA in a newspaper.
Generally, DBAs are non-transferable; a new owner would need to register a new DBA.
Filing procedures vary, but you can file for a DBA online in many jurisdictions.
Yes, an LLC can register a DBA if it wishes to do business under a different name.
No, a DBA is not a separate legal entity and therefore uses the EIN of its associated entity.
No, a DBA is just a name and does not provide any liability protection. For legal protection, you must form a legal entity, such as an LLC or corporation.
Conclusion
Filing a DBA when forming an LLC can be a strategic move for your business, particularly regarding branding and administrative flexibility. Be sure to familiarize yourself with the steps required in your particular state and, as always, consider seeking legal advice to ensure you’re set up for success as a new business owner.