We review a list of top ten things to remember and should know before filing a Doing Business As name.
Business owners and young entrepreneurs want to enjoy the success of seeing their business grow. A suitable name and identity in the market can help set them aside from competitors. “Doing Business As” or DBA is a great way to give your business brand identity and perhaps expand it. Many people confuse the idea of a DBA, and it should be remembered that a DBA isn’t regarded as the legal business entity.
Here are ten things you should know about filing a DBA:
- Having a registered or registering a DBA will not become the company’s legal name. Many states will have different regulations regarding this. You can operate under a different business or organizational name, as long as it’s been registered with the appropriate government bodies.
- State laws, county, and city regulations can vary, and it would be wise to first review your state requirements. Some states will require you to file and submit additional paperwork, although in Kansas, New Mexico, and South Carolina you’re not required to file a DBA for your business.
- Ensure that your DBA name is authentic and meets U.S. Trademark regulations. Before you can start the process, you can do an online search of the name to see if there are any other registered businesses with a similar name in the area. You can also read the naming guide on this resource.
- Depending on where you’re registering your DBA, in some cases, it will be different and you will either need to register it with the county or city clerk or state agency.
- Having a DBA will not entail or offer limited liability protection, meaning that if your business gets sued or declares bankruptcy; your assets are not protected from reposition.
- Make sure to review the guidelines for each different business structure. Operating your LLC, partnership, corporation, or nonprofit under a DBA doesn’t necessarily constitute the business’ legal trading name. The results are different for sole proprietorships and general partnerships, and filing should be done with the legal owner(s) of the business.
- When filing your DBA, it’s not required to have an Employee Identification Number (EIN), as a DBA isn’t a sole entity or business. Another great thing is that after you received your DBA, you won’t need to file a tax return for the DBA, seeing that income or loss from the DBA will be calculated from the business’ total tax liability.
- Remember that a DBA is regarded as a ‘nickname’ for your business, whereas an LLC is a true business entity, and shouldn’t be confused.
- Depending on how you’ll be conducting business, you’re only required to file a DBA if you decide that you’re going to trade outside a name that isn’t associated with the business. It can help you grow your business by adding new departments and trade sections.
- To register for a business bank account, you’ll most likely need a DBA. Some state laws will vary, but ensure to double-check your county and city bylaws. If you’re a small business or a sole proprietorship you can perhaps use the personal bank account of the legally registered owner. But, in time, having a business bank account will also help with better customer payments and overall business transactions.
There are some pros and cons to out-way before you decide to file for a DBA, but in many instances, it can be seen as a good start for your business. Other things to consider are also that having a DBA will allow your corporation or LLC to trade and operate under different names or grow into diverse entities. So having a Doing Business As may become a way to expand an already established business.