When driving past your building or scrolling through a page of Google search results, what’s the first part of your business a customer will see? That’s right, the name. Like a firm handshake and good eye contact, this name can leave a lasting first impression. That’s why it’s important to find one that’s unique, informative, and memorable.
Doing Business As (DBA) names offer benefits for every business type. Whether you want your sole proprietorship to operate under an assumed name or your LLC/corporation to use a different name than the one on your formation documents, a DBA can help.
The DBA is an incredibly useful and versatile tool for entrepreneurs of all kinds. And as a bonus, acquiring them is typically quite simple.
In this article, we’ll discuss all the finer points of registering a DBA name for your business. Whether you’re a self-employed individual working from home, or the owner of a large corporation, we’ll break down the specific answers to your questions.
A Doing Business As name isn’t a business entity ― like an LLC or a corporation ― although it shares some important characteristics with sole proprietorships and general partnerships. With a DBA, you can create an alternate name for your business for use in an official capacity.
For owners of casual, unincorporated businesses like sole proprietorships or general partnerships, the DBA enables you to create a fictitious business name for your company, rather than using your own name, or a partner’s. This is the most common reason for obtaining a DBA, but it’s certainly not the only one.
Imagine that a large limited liability company or corporation is releasing a new product line and wants it to have its own brand without forming an entirely new company. This business could instead apply for a DBA and use it wholly for marketing and branding. This way, the product line would be independent without departing from the overarching company.
For example, an upscale restaurant called “Smith’s Fine Eats” could get a DBA for their new fast-casual takeout spot “Fine Eats to Go ― A Smith Restaurant.” Or, how about a lawn care company that starts a snow-blowing winter side business: “Snow Removal by Tim’s Yard Care.”
One common thread you’ll notice between these examples is that a DBA name gives entrepreneurs the ability to change their image and marketing strategy without spending the time and money to form a new business entity.
Advantages of DBA Acquisition
Of course, a Doing Business As name is only necessary if it fits into the plan for your unique business purpose and goals. Is a DBA the right choice for your business? Let’s discuss the various benefits, whether you run an unincorporated business or an existing entity.
Sole Proprietorships and General Partnerships
These casual business types are not officially formed with any government entity, so the DBA is a great way to increase your company’s professionalism and legitimacy. Instead of using your personal name (or a partner’s name) in an official business capacity, you can acquire a DBA.
This opens the door to a more professional, reputable image for your business, especially considering that you can open business bank accounts using your DBA. Just put yourself in a customer or investor’s shoes. Would you feel more comfortable writing a check to a legitimate business or an individual person? We’d bet on the former.
LLCs and Corporations
Does your company operate multiple product lines that you’d like to keep distinct? Or does it have multiple physical locations, several branches that all belong to the same overarching company?
A business can sometimes more effectively and easily reach the target markets for each business branch or product line with names tailored to each segment. In these cases, a DBA can go a long way. Plus it can save you a ton of time and effort, as you won’t have to form several new companies.
A DBA can help make accounting practices easier as well. If you want to financially split up different parts of your business for accounting purposes, you can use DBAs to open separate checking accounts for each of them. In this manner, you can keep each portion of your business in its own little financial world, which makes finances easier to track.
Disadvantages of DBA Acquisition
If this sounds too good to be true, don’t worry, there are some disadvantages that bring the DBA back down to earth. These are important to consider before applying for one.
We already mentioned that a DBA is not a business entity, and as such it does not provide any limited liability protections. This means that the DBA does not provide any personal asset protection like registering your business as an LLC or a corporation does. If your sole proprietorship or partnership is sued, the DBA won’t do anything to stop creditors from pursuing your personal savings, house, car, and more. You may be held personally liable for the debts related to a settlement or judgment against your business. If you’d rather have this protection, you might consider forming an LLC or corporation instead.
Perhaps the biggest misconception regarding Doing Business As names is the fact that merely registering a DBA does not give you the exclusive rights to use that name. That name is still fair game to any other company that would like to reserve or register it. In fact, if someone else forms an LLC or corporation using the exact same as your DBA, that other entity will get the rights, and you’ll be forced to give it up.
The only ways to completely lock down a business name are to file a name reservation with your state or use it on your formation documents.
How to Get Your Own DBA
Ready to get your DBA? Let’s get to it. First, you need to confirm that your desired name is available. Since you can’t use a name that’s already taken in your state, search the state’s business name database to find out. If your name is available, go ahead and move on to the DBA application.
At this point, the DBA path may diverge depending on your state. Each state’s process is slightly different, so you should familiarize yourself with the specific requirements where you reside. DBA fees can range from as little as $10 in certain states all the way up to $100+ elsewhere.
In some states, the Doing Business As name is provided by the Secretary of State or Department of Revenue office. For example, in Washington, applying for a DBA is part of your business license and permit application. Other states require that you apply for your DBA at the county level instead of the state level. All that to say: there is no one-size-fits-all process to get a DBA across the country.
No matter which level of government issues your DBA, the process to acquire it is relatively similar. Typically, you’ll just need to fill out a simple document that lists the following information:
- Your existing business name
- Your new assumed name
- The physical location of your business
- Name and address of your registered agent (or another authorized representative of your business)
- Identities of your owners
Seven states also require you to publish proof of your DBA registration in a local newspaper: California, Florida, Georgia, Illinois, Minnesota, Nebraska, and Pennsylvania. Each of these states has its own little wrinkles regarding how to publish your DBA, but generally, you’ll need to take out an advertisement in a general circulation newspaper for a specified amount of time.
This works to foster transparency about businesses and their owners with the state and its residents.
Hiring a DBA Service
If all of this sounds like a hassle you’d rather not tackle yourself, there are other options. Plenty of companies out there will help you form your LLC, but did you know that these providers can also assist you in acquiring a DBA?
Most of the time, getting a DBA is simple enough that it’s not worth spending money hiring a professional. But if you already used a formation company to start your business, it might be easier to let them handle the DBA as well. Regardless, this route saves time and offers reassurance that there won’t be any hitches in the process.
There are quite a few business service providers that can obtain a Doing Business As name, and for the most part, they cost around $100 (plus any state fees). These are a few of our favorite options, and each costs only $99:
- Incfile: There’s nothing particularly special about Incfile’s DBA service, although they do offer to take care of this attribute “when you first incorporate your business.” This ensures that you’ll get your DBA as quickly as possible and that the information on your formation paperwork and DBA application is identical.
- LegalZoom: LegalZoom will apply for your DBA, and they also offer to handle publication requirements where necessary. If you live in one of the seven states that require publication of a DBA name, LegalZoom is definitely worth a look.
- Swyft Filings: While they don’t offer publication service, they make up for it with an impressive 100% satisfaction guarantee. Swyft claims that you’ll spend as little as 10 minutes filling out their application form, and their estimated turnaround times are among the best in the business.
Being thoughtful about your business name is a good thing. A solid name goes a long way in establishing your brand in customers’ minds. Doing Business As (DBA) names give you increased customization, flexibility, and versatility with your business identity. And best of all, they’re often easy to acquire.
In fact, we think the most difficult part is determining whether the DBA is the correct answer to your business ownership questions. If you need limited liability protection, or if you want to make sure that you have the exclusive rights to your chosen business name, you should probably form a business entity like an LLC instead.
Whether you’re looking to establish credibility for your sole proprietorship or promoting a new product line for your corporation, a DBA name could be the perfect solution for your business. Keep this useful tool in mind as you take on new business challenges.