When starting a limited liability company (LLC), one of the first decisions you'll need to make is what name to use.
This is an important decision, as your company's name will be associated with your brand and products or services. In some cases, you may want to run your LLC under a fictitious name - also known as a DBA.
Why Would an LLC Use a DBA?
A DBA, commonly referred to as a "doing business as" or "fictitious business name," represents the legal name under which your LLC will operate. It is a name that is different from the company's registered name with the state.
In other words, if your LLC is registered as "ABC Widgets," you may also want to do business as "XYZ Widgets."
There are many reasons why business owners decide to register their limited liability companies under a DBA.
Maybe you want to start a new business entity but don't want to use your personal name. Or perhaps you're already doing business under a different name and want to make it official.
Whatever the reason, registering as a DBA is a simple process that can be done through your Secretary of State office or online (this will depend on the state where you register).
Step 1: Choose a Business Name
To transact business under a DBA, your business must have a name. The naming requirement of the state will have to be followed.
The name must be unique and can't be used by other business entities. This is why you should perform a name search before adding a DBA under an LLC name.
Some states allow you to reserve a DBA name for a certain amount of time before you start using the name in commerce. This is done to ensure that no one else takes the name you want.
Whether the LLC conducts business as a sole proprietorship or limited liability partnership, it can conduct business under an assumed name, as long as it follows the naming requirements.
Across states, the requirements for a DBA name stipulate that a legal entity mustn't use any words, abbreviations, or symbols that could confuse the public into thinking that it is a different business.
Additionally, terms connected to a state agency, such as "police" or "court," cannot be used in a DBA name.
Step 2: File a Dba with the State
After choosing your business name, the next step is to file a DBA application with your state's Secretary of State office (or whatever county agency oversees businesses in your state).
This document simply confirms the existence of your business and its trade name, as well as some basic information about your company, such as the company's address and contact information.
To add a DBA, you must give the legal name of your LLC.
You will also be asked to confirm that it is a limited liability company. Additional personal information such as a home address, the full name of the owners, and the offices of your LLC will be required.
Also, keep in mind that these forms and filing fees will differ from state to state.
The filing method will also vary, so some states will allow DBA registration through either mail, phone or email, while some will only allow one or two of these options.
How to Know Where to Register a DBA?
A fictitious name registration must be completed with a county or state agency where the assumed name will be used in every state. In some jurisdictions, you'll have to do it at both the state and local levels.
The U.S. Small Business Administration website can assist you in searching for the specific contact information for your state and the requirements for the filing process.
Once you have filed your DBA form, you will be issued a certificate of assumed name (or something similar), which will serve as proof that your business is using this name.
You should keep a copy of this document in your company's legal documents. Additionally, most states require businesses to display their DBA name in a specific format on all business materials or local newspapers.
Across states, the requirements for a DBA name stipulate that a legal entity mustn't use any words, abbreviations, or symbols that could confuse the public into thinking that it is a different business. Additionally, terms connected to a state agency, such as "police" or "court," cannot be used in a DBA name.
Is a DBA a Business License?
No. Business licenses are typically issued by the local government where your business is located and allow you to operate your business within that jurisdiction. A DBA is a fictitious name filed with the state and will enable you to undertake activities specified for your entity type (a health professional, a lawyer, etc.).
On the other hand, a DBA is a trade name filed with the state in which your LLC is registered. A DBA (doing business as) is not a business license, but it is an essential step in registering your LLC, especially if you are a sole proprietor.
Is DBA A Public Record?
Yes, a DBA is a public record. This means that anyone can search for and view the name of your business.
When you register a DBAs under an LLC, they become attached to the LLC's fictitious names. This protects your personal information and keeps your private affairs separate from your business dealings. However, DBAs don't protect small business owners from personal liability unless they are previously registered as LLC.
Is an Employer Identification Number Required for a DBA?
No, unless that business entity intends to hire employees or open business bank accounts. EINs are not required for all business entities but are beneficial for certain entities. The IRS website provides more information on EINs and their uses.
Do I Need a DBA for a Sole Proprietorship?
Not necessarily. Conducting business without a DBA is possible even if you are a sole proprietorship. However, some states (such as California, for example) require sole proprietorships to register a fictitious company name with the state in order to do business under a name other than the owner's name.
Can a Limited Partnership Have a DBA?
Yes. Regardless of its business structure, every legal business entity can have a DBA. This includes sole proprietors, general partnerships, limited partnerships, limited liability companies (LLCs), and corporations.
Can Multiple Businesses Use the Same DBA?
It depends. If you are registered as a limited liability company under a fictitious business name, your DBA can't be used by any other business entity in your state. If you operate multiple businesses, you can use the same DBA.
However, if you are registered as a sole proprietorship using a DBA, other businesses can use the same name in their state. DBAs are not the same as trademarks, so keep in mind that you might get sued for trademark infringement if you are using a trademarked name.
Can a Company Have Multiple DBA Names?
Yes. You have the legal right to conduct business using as many DBAs as you wish.
Assumed names can be your own name, a combination of last names (usually used by a general partnership), or a completely made-up name. However, all DBAs must file a registration form with the state where the company operates.
Does a Corporation Need a DBA?
No. A corporation doesn't necessarily need a fictitious business name, provided that it has already registered with the state. If a corporation or an LLC plans to use a different legal name than the one signed when filing the registration documents, DBA usage will be necessary.
The registration can be performed at a county level, state level, or with a city government.
Does a DBA Ever Expire?
It might if the state law under which it was formed specifically provides for its expiration.
Otherwise, the DBA will continue in effect until it is canceled or revoked.
Registering a DBA under an LLC is not complicated, but it does require careful consideration. If you're unsure about the procedure or don't feel comfortable registering on your own, seek help from ZenBusiness or consult your local government office about the process.
A registered company name will provide many benefits to your business while also protecting both you and your employees in case of legal trouble down the road.
It's worth taking some time upfront to ensure that everything goes smoothly when filing for registration with your state office.