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If you’re starting a new business or expanding an existing one, you may have encountered the term “DBA.” But what does DBA mean, and do you need one? Understanding how a DBA works can help you expand while saving time, money, and unnecessary paperwork as your business grows.
Key Points
• What DBA means is “doing business as” – an official, registered alternate name that allows a business to operate under a name other than the one under which it was legally created.
• Filing a DBA helps separate a business identity from a personal one, which is important for sole proprietors who want to operate under a distinct business name rather than their own.
• Practical benefits of a DBA include enabling sole proprietors to open a dedicated business banking account and giving a business a more descriptive name that makes it easier for customers to find.
• Using a DBA also offers privacy protection by keeping personal legal names off public-facing materials like invoices and marketing documents, potentially reducing exposure of personal information.
• Registering a DBA is a straightforward and affordable process, typically costing $10–$150 depending on the state.
What Does DBA Stand For?
What DBA stands for is simply “doing business as.” It’s an official, registered name that allows you to start a small business under a different name than your business’s legal name. This alternate business name may also be called a trade name, an assumed business name, or a fictitious business name.
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Who Needs a DBA?
What is a DBA name? It’s the name you register to use for your business even if its legal name is something else. A DBA name can be useful when you have an already established business entity, you’re thinking about launching something new, and you want this new project to have a new name. But there are also a variety of situations that can require DBA filings, and they can vary by type of business entity. Consider the following:
Sole Proprietors and Partnerships
One of the advantages of a sole proprietorship is that they’re very simple. In fact, you don’t even have to register one. When you’re a sole proprietor or in a partnership, your business name is your legal name or the names of you and your partner(s).
What a DBA name does is allow you to separate your business name from your personal identity. For example, say your name is Paul Warner, you’re an electrician, and you want to open a business called Paul’s Electric. In this case, you’d need to file a DBA to separate the name you want to use from your own name.
LLCs, Corporations, and Franchises
If you have a limited liability company (LLC) or a corporation, the legal name of your business will be registered with your formation documents. If you want to use a different name from the one used in your LLC articles of organization without registering a new company, you’ll need a DBA. This could happen, for example, if your company launches one or more brands. Each can operate under a DBA that itself operates under the umbrella of your original business.
A franchise is a type of business model in which an established company or brand allows another individual to use its brand name and operating systems to sell products and services. Typically, franchise owners will establish their own business entity, such as an LLC. Then they usually need to file a DBA to use the franchise name.
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Reasons to File a DBA
There are other practical reasons to file a DBA. For example, if you’re a sole proprietor, a bank might require that you file a DBA before opening a business bank account. This can help separate your business checking account from your personal account.
What’s more, using a DBA can provide privacy protection. It helps prevent your legal name and other personal information from being readily available to the public through marketing materials or invoices, for example.
DBAs can also be helpful because they allow you to operate with a name that’s more descriptive of the product or service you provide. This can make your business easier to find and more memorable to customers.
And finally, as mentioned above, filing a DBA means that you can operate with a different name without filing as an entirely new business entity – a process that can be costly and time consuming, as well as creating unnecessary complications.
How to Register a DBA
Registering a DBA is typically a straightforward process. It begins with searching local databases for name availability. After that, you submit a DBA registration form to your state or county clerk and pay any required filing fee.
Choosing a name. Begin the process of filing a DBA by choosing a name that is unique, catchy, and descriptive of your product or service. Make sure this name is not already being used in your state or county. You should be able to find this information on the website of your county clerk or state’s business registration authority.
Complete a DBA form: If the name you want to use is available, complete a DBA form, which you can typically download from your state or county’s government website. Complete the form, file it as instructed, and pay any applicable fees. Your registration may need to be renewed every few years.
Publish your name: Depending on what state you live in, you may be required to publish your DBA name in a local newspaper for a set period of time.
DBA vs LLC: Key Differences
While LLCs and DBAs can both be relevant to your small business, they’re very different functionally.
A limited liability company (LLC) is a type of business structure that protects its owners from personal liability. If your LLC is sued or faces financial trouble, for example, your personal assets, such as your savings and home, cannot usually be claimed by creditors. LLCs can also offer certain tax advantages.
A DBA is not a business structure. Rather, it’s a name you can officially register and use for your business even if your company was formed under another name. You can also use a DBA if you start a related business but want to operate it under the same legal structure as the parent company. Say you operated a catering company that you’ve registered as an LLC under the name of Gathered Table and you want to open a bakery called Gathered Sweets. You could use a DBA to separate the new brand without having to open a new LLC.
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The Takeaway
A DBA is a simple, cost-effective way to operate under a different business name without the hassle of forming an entirely new legal entity. Whether you’re a sole proprietor looking to brand yourself professionally, an LLC launching a new product line, or a franchise owner adopting a recognized name, a DBA gives you the flexibility to do so. Just be sure to check your state and county requirements, as the registration process and rules can vary by location.
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FAQ
Does a DBA provide personal liability protection?
A DBA is not a business structure – it’s a name under which your company does business – so it doesn’t shield you from personal liability. If you’re looking for liability protection, you might want to look into filing your business as an LLC or as a corporation.
How much does it cost to file a DBA?
Filing a DBA is usually inexpensive, costing anywhere from about $10 to $150 depending on which state you live in. That said, some states may also require that you publish the name of your business in a local paper for a certain amount of time, which can increase the cost.
Can an LLC have a DBA?
Yes, an LLC can have a DBA. You can file a DBA if you want to operate your company using a name that’s different from the one used in the LLC registration documents.
Do I need a separate bank account for a DBA?
It’s highly recommended that you have separate business and personal bank accounts. This helps you track business income and keep business expenses separate from personal expenses. If you’re a sole proprietor, some banks may require you to file a DBA in order to open a business account.
How long does a DBA registration last?
DBA registration length varies by state. You may have to renew once every one to five years.
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