When it comes to naming your business, you may have more options than you think. You can choose to do business under your name, a registered company name or a DBA account. When you create a “doing business as” account, you’ll need to make sure to comply with the particular laws in your state.
TL;DR (Too Long; Didn't Read)
A "doing business as" account, also known as a DBA, is the public name by which your company does business.
What Is a DBA?
A DBA account lets you do business under a name of your choosing. Otherwise, as a sole proprietor, you would need to use your name as the name of the business. That’s because when you file for any needed business licenses or permits, it is done under your name and not the name of the company.
Let’s say you open a bakery. When you file the paperwork as a sole proprietor of the business or even with a partner, the business automatically operates under your name or the name of you and your partner. With a DBA account, however, you can choose a name that better reflects your business. You can even get a bit more creative.
With a DBA account, you can name your bakery any name that hasn’t already been taken by another business. Your name doesn’t even need to be included. DBA examples are “Rainbow Bakery,” “Cookies and More” and “Flour Power.”
Why Do You Need One?
In some states, such as a DBA in California, you must file a DBA account to do business when you are a sole proprietor or partnership. Even if you aren’t required to file for a DBA account, there are many benefits to doing so:
- It is often better for branding purposes if you don’t want your name to be the brand.
- You can afford some creativity in coming up with a name for your business. It’s a good idea to generate many DBA examples before selecting the final name.
- With a DBA, you can operate a variety of business ventures under the original business entity (you).
- It can be the easiest way to officially register your business name with the state.
- When you do register your business name, you’ll receive a federal tax ID number that allows you to open a business bank account in order to keep business earnings separate from personal income.
A DBA also keeps your business assets separate from your personal assets, which can come in handy in the case of a lawsuit or other financial issue.
How to File for a DBA Account
Once your DBA examples lead you to the perfect name for your business, it’s time to open a DBA account. How you file for a DBA account depends on the state in which you live.
For example, to register for a DBA in California in Los Angeles (also known as a fictitious business name), you must first do a search to make sure your chosen name isn’t already in use. Once you have an original name, you can file for a DBA in California in person, by mail, through a third party or by proof of publication. With proof of publication, you must publish notice of the name in a newspaper where the principal place of business is located once a week for four weeks.
Along with your preferred method of filing, in any state, you’ll need to fill out the required paperwork and pay the designated filing fees. Once you get everything approved, you are free to operate your business under your chosen DBA and open any needed DBA accounts.