What Is a DBA?
Do you want to operate your sole proprietorship or general partnership under an assumed name? Or maybe you own a limited liability company, corporation, or other business entity, but would like to use a business name other than the official name of your company?
There are quite a few reasons why entrepreneurs of all kinds enjoy the flexibility afforded by a doing business as (DBA) name, and the process for acquiring one 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. Let’s discuss how to acquire an assumed name that your company can use as an official alternate name.
A doing business name isn’t a business entity ― like an LLC or a corporation ― although for sole proprietors or general partners, the DBA shares some important characteristics with these common business structures. With a DBA, you can create an alternate name for your business that you can 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 that of your partner. This is the most common usage of DBAs, but it does not nearly encapsulate the entirety of assumed name usage.
The other way DBAs are routinely used is by companies that already have registered business names, usually corporations or limited liability companies. These entities can use a DBA to create a separate brand for marketing purposes. You’ll often see a DBA used by an LLC or corporation when they introduce a new product line that they want to position as being a separate product offered by 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 doing business as (DBA) name gives entrepreneurs the ability to change their image and marketing strategy, without going to the hassle of forming a new business entity.
Advantages of DBA Acquisition
Is a DBA the right choice for your business? Let’s talk about the ways a doing business as name can help you, whether you run an existing business entity, or if you operate an unincorporated business.
Sole Proprietorships and General Partnerships
For these casual business types that are not officially formed with any government entity, the DBA is a great way to increase your company’s professionalism. As opposed to using your personal name (or a partner’s name) as the official name of your business, you can acquire a DBA.
This opens the door to a more professional and legitimate image for your business, especially considering that you can open business bank accounts using your DBA. Most customers feel much more comfortable making payments to a business rather than to an individual’s personal name, and it makes perfect sense if you put yourself in their shoes. Wouldn’t you rather write a check to a legitimate business, instead of to the individual person who sold you the products or services?
LLCs and Corporations
Does your company operate multiple product lines that you’d like to keep distinct? Does your business have multiple physical locations, or several branches that all belong to the same overarching company?
If you want to keep these parts of your business separate for advertising and marketing purposes, you could create separate LLCs or corporate subsidiaries. Or, you could simply acquire a DBA for each product line or location, which saves considerable time and effort, and might even save you some money.
In addition, a DBA can help make accounting practices a bit easier. If you want to financially split up separate parts of your business for accounting purposes, you can get a DBA for each one, then 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, making it easier to track your finances.
Disadvantages of DBA Acquisition
So, what are the downsides to a DBA, compared to the advantages? Unfortunately, there are a few noteworthy disadvantages for doing business as names, which could make or break your decision to get one.
First and foremost, 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 unincorporated business is sued, you may be held personally liable for the debts related to a settlement or judgment against your business ― this is the biggest difference between acquiring a DBA and forming a business entity like an LLC or corporation.
The other drawbacks are a bit less obvious. In our opinion, 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. In fact, if someone else forms an LLC or corporation using the exact same name you registered as your DBA, that other entity will get the rights to the name, and you will no longer be able to use it.
This is obviously a huge issue that should not be taken lightly, and it is the best reason to simply form a formal business entity rather than acquiring a DBA.
How to Get Your Own DBA
One aspect of DBA acquisitions that remains the same no matter where you’re registering the name is the fact that you’ll first need to search through your state’s business database to make sure someone else hasn’t already claimed your desired name. If your name is indeed available, you can move on to actually filling out the application.
After that, the process for acquiring a DBA is different depending on which state your business operates in. While all 50 states charge some sort of fee to get a DBA, different states have different fees for this service. These fees can range from as little as $10 in certain states, but they also go all the way up to $100+ in other locations.
In some states, the doing business as name is provided by the Secretary of State or Department of Revenue office ― in some states like Washington, you’ll actually apply for a DBA while filling out your business license and permit application. In other states, you’ll need to obtain your DBA on the county level, rather than from the state. In other words, there is no one-size-fits-all process to get a DBA across the country.
For the most part, no matter which level of government you need to register your DBA at, the process to acquire a DBA 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
- Physical location of your business
- Name and address of your registered agent (or another authorized representative of your business)
- Identities of your owners
In addition, there are seven states that require you to publish proof of your DBA registration in a local newspaper, which include California, Florida, Georgia, Illinois, Minnesota, Nebraska, and Pennsylvania. Each of these states has its own little wrinkles regarding how to publish your DBA, but in general you’ll need to take out an advertisement in a general circulation newspaper for a specified amount of time. The point of this requirement is to make sure there is plenty of transparency regarding which people operate which businesses in the state.
Hiring a DBA Service
Similar to the way you can hire a business service provider to form an LLC for you, you can also enlist the services of one of these companies to acquire your DBA.
It’s simple enough to obtain your own DBA in most locations, but if you’ve already hired one of these companies to form your LLC or corporation, it can be even easier to let them handle your DBA as well. Either way, you can save some hassle by hiring a professional service, as well as get the peace of mind that everything was done correctly.
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 state fee). These are a few of our favorite options, each of which has the exact same $99 price point:
- 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,” which ensures that you get your DBA as quickly as possible, and also makes sure your company has the same information in your formation paperwork and your DBA application.
- 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 requires 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. They also claim that it takes as little as 10 minutes to fill out their application form, and their estimated turnaround times are among the best in the business.
There’s nothing all that complicated about acquiring a doing business as (DBA) name.
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.
We hope that this article helped you figure out if a DBA is for you, and also answered your tough questions about how to acquire one. We wish you the best of luck!