How to Account for a Company Name and a DBA in a Contract
A "doing business as" or DBA can help distinguish your products in the marketplace, but be aware that a DBA is just a convenient alias and shouldn't be used as a substitute for the company's legal name in official or contractual documents. Failing to properly name your company as one of the parties to a business contract can lead to confusion and extend individual liability to the owner or employee who signed the contract on behalf of the company.
Every business has a legal name that has been approved by the state in which it was formed. For corporations and limited liability companies (LLCs), the legal business name is the one listed on their formation paperwork. For sole proprietorships and partnerships, the legal name of the business is the name of the owner or partners. State law requires businesses to use their legal names when conducting transactions, unless the business has an alias approved and registered with the state.
States allow businesses to use an alias -- also known as a "doing business as," DBA, fictitious name statement or assumed name -- as long as the name is properly registered with a state or local office. Registration allows anyone to look up the DBA and find out the legal name of the company. Businesses use DBAs for many reasons, but a DBA is never a substitute for the company's legal name in binding transactions.
One of the easiest ways to reference both the legal name and a DBA of a company in a business contract is to indicate the relationship between the two names, such as XYZ, Inc. d/b/a ABC Company or XYZ, Inc. DBA ABC Company. Basically, in every place in the contract that calls for the name of the business, indicate the company's legal name and that it is doing business under another name. Format used is not as important as simply conveying the information.
You may think it's not important to indicate both the legal name and the DBA of your company when signing a contract because you use the DBA exclusively in your advertising and on products for sale. A DBA, however, is basically just a nickname, and using it without reference to the full legal name of the company in legally binding transactions can undermine the liability protection that corporation and LLC business structures provide. A business creditor can argue that the person who signed the contract is individually liable for performance because the legal name of the business was never used.