If you're starting a sole proprietorship, then filing for "doing business as" status is the simplest way to create a business name that's different from your name. In most states, registering a DBA allows you to create an official trade name that you can put on your website and letterhead. A DBA doesn't change the legal status of your business, but it keeps you compliant with regulations and makes sure your business contracts hold up in court.
TL;DR (Too Long; Didn't Read)
DBA stands for "doing business as." It's the fictitious name you give to your business that's different from its legal, registered name or your name.
What DBA Means for Business
A DBA allows you to do business under a name that is different from your business's legal, registered name or, in the case of sole proprietors, from your name. Businesses that file a DBA usually do so to gain an official name they can put on their website and letterhead. Its origins lie in consumer protection law, the basic thrust being to stop dishonest business owners from avoiding legal liability by operating under a different name. A DBA doesn't change the legal status of your business; it won't incorporate your sole proprietorship or give you the same limited liability as an LLC. What it does is help keep you compliant and ensure that any contracts you sign in your business name hold up in court.
Why Sole Proprietors Might Need a DBA
Sole proprietors and partnerships might file a DBA when they want to create a separate business identity without having to form a corporation or LLC. For example, if you are Jennifer Peters and you open a legal marketing consultancy, legally the name of your consultancy defaults to the name of the business owner, "Jennifer Peters." To trade as "Zone Legal Marketing," you file a DBA. Banks sometimes require DBAs for sole proprietors and partnerships to open a business bank account and receive payments in the name of the business.
Why LLCs and Corporations Might Need a DBA
For corporate businesses and limited liability companies, your LLC or corporation documents register the company name, and you don't have to file a separate DBA. However, you need a DBA if you plan on using a name that's different from the name specified in your corporation paperwork. Suppose, for example, that Jennifer Peters incorporated Zone Legal Marketing. Now, she wants to enter a new business area offering low-cost marketing services to non profit organizations. The easiest way to accomplish this is to file a DBA for "Zone Nonprofit Marketing" and create a separate website specifically targeting this audience.
Names You Can Choose
In general, you can choose any name you like with few restrictions. Misleading words like "corporation," "Inc." and "Corp." are banned unless you are a corporation registered with the Secretary of State. In some cases, you don't need a DBA if your business name is a combination of your name and a description of your service like "Jennifer Peters Marketing." If in doubt, touch base with your county clerk's office and ask if you need a DBA. The county clerk keeps a list of DBAs on file, so you can check that you're not using anything similar to someone else's business name.
How to File a DBA
DBAs are typically handled at city or county level. Some states require a filing with a state agency; other states like Kansas have no requirement for filing DBAs at all. If registration is required, it's a straightforward process that involves completing the appropriate paperwork at the county clerk's office and paying a filing fee of between $10 and $100. Some jurisdictions require you to publish notice of the DBA filing with a local newspaper for a certain period. When the period is up, you may begin using the DBA name.
Jayne Thompson earned an LL.B. in Law and Business Administration from the University of Birmingham and an LL.M. in International Law from the University of East London. She practiced in various “Big Law” firms before launching a career as a business writer. Her articles have appeared on numerous business sites including Typefinder, Women in Business, Startwire and Indeed.com.