Do General Partnerships Require a DBA?
Businesses must comply with the laws of the states where they are formed and registered. State laws tightly control business name selection, establishing guidelines so the public can identify responsible parties for liability purposes. Every business is required by law to use the legal name that is on record with the state while conducting business, unless it properly registers a fictitious or assumed business name, also known as a “doing business as” or DBA.
A general partnership is a business enterprise operated for profit by two or more individuals who agree to accept unlimited personal liability for all business obligations. The partnership is governed by the laws of the state where the partnership operates. State law requires the partners to use their own names when conducting business to let the public know that the partners are ultimately responsible for any business debt or other type of obligation that is not properly paid out of partnership assets.
If the partners want to use a business name that is not the names of the individual partners, they must register a DBA with the state. Each state has its own DBA registration process that requires the partnership to submit a registration form that identifies the partners who are responsible for the business conducted under the DBA. Some states process DBAs on a statewide basis, while others handle the registration at the local level. If a state uses local registration, the partnership is required to register the DBA in every locality in which it plans to do business. Likewise, if the partnership plans to operate in multiple states, it must register the DBA in each state.
A general partnership is not required to use a DBA. Under the law, the use of a DBA is optional; however, partners can agree in a partnership agreement that the use of a DBA is mandatory. Any provision in a partnership agreement regarding the use of a DBA is contractual and based on the will of the partners, rather than the law. If the partners choose to use a DBA, it must be properly registered first. State laws severely penalize any business that uses a name that is not the company’s legal name or a name that has been approved for use by the state.
Although general partnerships are not required to use a DBA, many types of businesses organized in this way choose to do so. DBAs enable the partnership to develop a brand that is based on a name that is not tied to the individual partners, especially if the partners change over time. If the partnership wants to incorporate in the future, for example, it is easier to maintain brand recognition by using the DBA as the name of the corporation, rather than having to pick a new name.