DBA stands for “Doing Business As” and refers to an alias or alternate name under which a company conducts business.
What is a DBA?
A DBA isn’t a separate legal entity.
It’s an official registration of a business name that differs from the legal name of the business entity.
Terminology: Depending on your state or locality, a DBA might be referred to as:
- Assumed Name
- Fictitious Business Name
- Trade Name
Why Use a DBA?
- Branding: It can be more marketable than the legal business name.
- Privacy: Sole proprietors and partners can operate under a business name without having to reveal their names.
- Compliance: Some states require a DBA if the business name doesn’t include the owners’ names or suggests additional services not mentioned in the company’s original charter.
- Bank Requirements: Many banks require proof of a DBA registration to open a business account under the fictitious name.
How to Obtain a DBA:
- Name Search: Before registering, search your state’s business database to ensure your desired DBA isn’t already in use.
- Registration: This typically involves filling out a form with the business’s details and the desired DBA. The specific form and the agency you’ll file with vary by state.
- Fees: There’s usually a registration fee, which varies.
- Publication Requirements: Some states require you to publish a notice in a local newspaper about your new DBA.
- Renewal: DBAs don’t last indefinitely. Depending on the state, they might need renewal every 5-10 years.
Limitations of a DBA:
- No Exclusive Rights: Registering a DBA doesn’t prevent another entity from using the same name. For exclusive rights, consider a trademark.
- No Legal Protection: The DBA doesn’t provide limited liability protection. That’s the domain of legal structures like LLCs or corporations.
- Not a Business License: Acquiring a DBA doesn’t replace the need for necessary licenses or permits.
Key Considerations about DBAs:
- Location-Specific: Each state has its regulations regarding DBAs, so always check local rules.
- Multiple DBAs: A single business can have multiple DBAs.
- Changes: If your business information changes (like an address), update your DBA registration.
While a DBA doesn’t offer legal protection or exclusive rights to a name, it’s an essential tool for branding, compliance, and flexibility in business naming.
Always ensure you’re meeting local requirements and keep your registration updated.
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