What Is a DBA?
A DBA — short for “doing business as” — is a name that a business uses for carrying out commercial activity that’s different from its registered name. A DBA allows a business to operate under a name that is different from its legal name, such as a trade name or the name of the business’s owner.
Most states make it simple and cheap to register a DBA. However, it's essential to look up the specific rules governing DBAs in your area because DBA laws vary at the state and local levels. In this guide, we’ll cover what a DBA is, the benefits of using a DBA and how you can file for a DBA.
Whether you want to start a business or change your existing business’s name, a DBA may be a good fit for your company.
What is a DBA (doing business as)?
A DBA grants legal recognition to a company’s alias. Otherwise known as a fictitious business name, DBAs allow you to enter into contracts, receive payments and market yourself under a name other than your business’s legally recognized name.
For example, let’s say you own a small business incorporated as Michelle’s Cleaning Services, Inc. but you want to conduct business under the name MCS Cleaning. In this case, you could register a DBA as MCS Cleaning and use this name for all of your business operations.
Why use a DBA?
You may want to use a DBA for three primary purposes:
- To enhance your personal privacy
- To market your business more effectively
- To differentiate product lines or brands
Creating a DBA for your company is nothing more than a cosmetic change. Instead, think of a DBA as a conventional name change. Registering a DBA is not the same as incorporating or organizing your business. A DBA is not a legal business entity and won’t grant special tax status or shield you or other business owners from liability. Getting a DBA only allows your business to legally present itself to the public under a new name.
Benefits of a DBA
Filing a DBA can affect your business differently, depending on the structure and type of the organization. Common reasons to file for a DBA include:
Avoiding the use of personal names
If you run your business as a sole proprietorship or partnership, you’re legally required to use your personal name as your business name. For example, if an independent contractor named John Smith runs his business as a sole proprietorship, then, legally, his business name should be John Smith. Not only does this intrude on his privacy, but it’s bad branding. John’s name doesn’t tell prospective clients anything about what his business offers.
A DBA would allow John to rebrand his business. He might file a DBA to change his business name to Greenville Home Repairs. This name would tell prospective customers where John operates and what services he offers. The change would also provide a measure of privacy for John’s personal name.
While a DBA can offer you additional privacy as a business owner, it won’t completely shield you from public scrutiny. Most states allow members of the public to look up the owner of a DBA name. Some states also require business owners to publish their name change in a local newspaper.
Increasing credibility
You may also find registering a DBA enhances your credibility in the eyes of the public. Some consumers are wary of sole proprietorships, and the informal business naming convention can come across as unprofessional. By contrast, a DBA appears more professional than using your name and shows you’ve taken steps to brand your business.
Which business would you hire: Accounting Solutions or Sally Greene? The first name sounds like a legitimate business, while the second may sound unprofessional and less established. This bias towards professional-sounding names goes beyond appealing to consumers. Some business banks even require sole proprietorships and partnerships to register a DBA before opening a business checking account.
Streamlining the rebranding process
Your organization may also want to adopt a DBA as part of a rebranding effort. For example, if you have a BBQ restaurant and decide to start selling BBQ sauce online, you may want to distinguish the BBQ sauce line from the main restaurant business. You can accomplish this by assigning it a different name in the form of a DBA. Although the two brands belong to the same business, the DBA effectively allows you to treat them as separate entities for marketing and branding purposes.
Let’s explore a real-life example. The Gap, Inc. has DBAs for its brands like Old Navy, Gap and Banana Republic. While The Gap, Inc. owns all three of these brands, it has spent considerable time and money aligning each brand toward a different segment of shoppers. Separate DBAs bolster The Gap, Inc.’s marketing efforts.
Complying with business name requirements
Certain business structures come with specific naming conventions they must follow. In some states, a limited liability company (LLC) must have the words limited liability company or one of the two acronyms LLC or L.L.C. somewhere in the business name. With a DBA, you can circumvent this rule.
For example, in Florida, you might name your business John’s Famous Burgers, LLC to satisfy legal naming requirements. However, if you file a DBA you can legally do business as John’s Famous Burgers. DBAs will not influence what taxes you pay or your liability exposure.
Does business structure matter when it comes to DBAs?
Business structure does not matter when it comes to DBAs, though having a DBA may be more important for some businesses than others. Different business structures can all use DBAs, including:
- C-Corps
- S-Corps
- LLCs
- Sole proprietorships
- Partnerships
A DBA is not a type of business structure and doesn’t constitute a distinct business entity. Rather, a DBA is a tool that lets you easily rename all or part of your business.
How to get a DBA certificate
The process for filing a DBA varies from state to state. Some will require you to register with the Secretary of State, while others regulate DBAs at the local level. You can hire a DBA filing assistance service to complete the registration process for you, but the process is typically straightforward.
Regardless of which state you do business in, there are several steps you should follow when filing a DBA:
1. Perform a trade name search
Before you fill out any paperwork, do a quick DBA name search to ensure no other businesses in your state have already claimed your name. Many states maintain an online search tool, making the process fast and simple. Moreover, such a tool will tell you whether you can legally take one name before you spend time filling out paperwork, as some states prohibit the use of name variations. For example, if a business has already claimed the name Quick Plumbing Repair, you can’t name your business Quick Plumbing Repairs.
Even if your state has relatively lax rules regarding name use, you should still ensure you’re choosing a unique business name. Customers may become confused if your name bears too much resemblance to a competitor.
Once you select your name, you may be able to reserve it before you officially file, but not all states offer this service. Also consider claiming your domain name at this point. If someone else has claimed the domain name for your DBA, consider naming it something else. In the online era, your business’s domain name constitutes an essential part of your overall brand.
If you want to give your DBA name more protection, you can trademark a name. Trademarks offer another layer of legal protection for your business name and brand.
2. Satisfy any operating requirements
Certain states have specific operating requirements you must meet before registering a DBA. For example, in some states, you must operate your business under the DBA before legally registering it. Fulfilling these operating requirements could be as simple as printing business cards or brochures under your new business name.
3. Register the DBA with the Secretary of State
Many states require business owners to register their DBA name with the Secretary of State’s office. However, some states will require that you file your DBA with your local county clerk or other government agency. Perform an online search to learn about the specific requirements for your state.
In most states, you’ll be able to file for a DBA online, via fax, in person or by mail. The registration process tends to be relatively simple. The process typically involves filling out a few forms and paying a small fee between $5 and $150. You may be required to include documents verifying your relationship to your business, such as a copy of your business license.
Does a DBA provide liability protection?
A DBA doesn’t provide liability protection, it merely allows you to operate under a different name than your company’s formal name. A DBA doesn’t provide security from lawsuits and debt obligations, you’ll still be legally liable for any debts undertaken or actions committed by your business.. You can organize your business as an LLC to protect your personal assets from liability incurred by your company.
Is DBA registration required?
You must register your DBA with the appropriate state or local government body to conduct business legally under that name. If you choose to forego DBA registration, you’ll open yourself up to hefty fines from your state’s regulatory body. You’ll also have trouble with other business functions, like opening a business checking account or applying for small business loans.
How much is a DBA filing fee?
DBA filing fees vary from state to state. In states that handle DBAs at the local government level, the price may differ from county to county. However, the cost of filing for a DBA tends to be inexpensive — usually between $5 and $150.
That said, you may have to pay additional fees if you file an addendum later. Depending on your state, you may have to pay to place a notice in your local newspaper announcing the name change.
Prep your legal entity for success
Not every business needs a DBA and some may benefit from more than one DBAs. If you want to change the name of your sole proprietorship or limited partnership to protect your privacy, a DBA can help. A DBA can also help you change the name of your business to more accurately reflect its products, services, geographic area or customer base. Before you file, however, do a DBA search to ensure your DBA or trade name isn’t already in use by another business.
If you’re already using a business name you haven’t registered, complete your DBA as soon as possible. Depending on the location, operating under a fictitious name without filing for a DBA can open your business up to heavy fines and penalties. For professional assistance, you can always hire a DBA assistance service. However, most business owners have little trouble navigating the DBA filing process, and you should be able to do it on your own.
Once you establish legal recognition for your business’s new name, you can order new marketing materials, advertise and even enter contracts under your DBA.