Starting a business comes with a handful of terms you might not be familiar initially. One of those terms is a DBA, an acronym for “doing business as.”
Table of Contents
DBA Meaning: Doing Business As
When you file for a DBA, you are creating a separate name for your business to conduct under. That way, when you write a check, sign a contract, or get a bank account you can use this name instead. If you don’t get a DBA and still do so, then there could be some severe legal consequences.
When Does a Business Need a DBA Name?
It might sound like a lot of fuss over just a simple name change, but there are some practical reasons to do so.
- Some business types operate under the owner’s personal name, which can get confusing.
- Certain banks might require a DBA.
- If you begin this business beneath the umbrella of another business you already own, you might get a DBA to target a different demographic or just to avoid confusion. For example, if you already own a furniture business but then also start selling professional decor services, you might obtain a DBA for the latter once it takes off.
DBA vs LLC
A DBA is just a business under a different name. It doesn’t affect the actual structure of the business or the liability of the partners.
A LLC, a limited liability company, also allows you to do business under a different name for your company, but it does affect the inherit structure. LLCs are legally separated from their owners, in order to protect them from full liability.
Additionally, while acquiring a DBA or LLC will require registration with your state government, the fees for a LLC are substantially higher.
Sole Proprietorship, General Partnership, and DBAs
If you have a sole proprietorship or will be operating under a general partnership, you should strongly consider getting a DBA. Otherwise, when you have business transactions, the name of your business will be your own name. This can get confusing, and opens up risk of financial problems as your personal and business records get blurred together. In order to complete business transactions as “Best Business Ever” rather than “[Your Name Here]”, you’ll need a DBA.
DBA Certification and Registration
If you do decide to acquire a DBA, you’ll have to go through the proper channels.
How DBA Filing Works
Every state and county will have their own forms and process to go through. It’s important to remember that you’ll need to register your DBA with every county you plan on doing business in.
- Begin by researching the DBA requirements for your state and county. Some do not require registration, but most do.
- Go to your county clerk’s website. The forms are probably available online. If not, give them a call.
- Fill out the forms and comply with any other requirements. Some counties require you post a notice in the newspaper of your DBA, so be on the lookout for strange requirements.
- File the appropriate forms and pay the required fee, usually no more than $100.
- Wait to receive your DBA Certificate.
Benefits of a DBA Name
A DBA name can give you a lot of freedom and convenience, but one of its biggest advantages is for marketing purposes. With a DBA, your two businesses don’t have to associate with each other outright. You can create a separate brand for your separate business without having them all named “Jane Smith.”
Additionally, it can help keep your accounts straight, and some banks demand that you have a DBA in order to open up on a business account.
Having a DBA is cleaner all around, and the process to get one is not very complicated nor expensive. If you plan on starting a business, especially as a sole proprietor or in a general partnership, consider a DBA.
Image Source: https://depositphotos.com/
Our Experts Recently Evaluated The Top 5 Credit Repair Companies Available.