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When and Why You Need to File a DBA

Published on Dec 3, 2013

Summary

There are some circumstances under which it might be more beneficial to do business under a fictitious, or “Doing Business As” (DBA) name.
File DBA Every business owner, or prospective business owner, should know a few key facts regarding the name of their business. There are some circumstances under which it might be more beneficial to do business under a fictitious, or “Doing Business As” (DBA) name, and business owners should be cognizant of these different scenarios. Possibly the most common occurrence for filing for a DBA is when starting a business, as a sole proprietor or general partnership. Unless you file a DBA, your business name and your personal name will automatically be one in the same. For example, if Jane Smith wants to open her own clothing boutique but doesn’t want it to be named “Jane Smith’s,” she would need to file a DBA. So, if your business name includes a combination of your first and last name (Jane Smith’s Boutique) you may not need to file a DBA, but if it is only your first name (Jane’s Boutique), a DBA is required. In such a situation, it’s usually based on personal preference. However, there are some instances which require a business to file a DBA, like when opening a business bank account. Most banks typically require sole proprietors or the partners in a general partnership to file a DBA before allowing them to open a bank account for their business, and will require a certified copy of the DBA. Sometimes it’s not a bank that requires you to file a DBA, but a client. For example, if you freelance, a corporation might require you to have a DBA. However, in this situation it is more likely that the company will require you to incorporate your business or form an LLC. All this really means is that you will need to turn your sole proprietorship or general partnership into a legal business recognized by your state of incorporation. In most states it is fairly simple to incorporate your business. If you are already a corporation or LLC, you might find yourself wanting to expand your company into a new area of business that is not currently represented by your business name. In this case, operating under a new DBA might be beneficial to your expansion into a new industry. Lastly, you might find yourself wishing you could add on another business or website separate from your current business. For example, say your current company makes and sells women’s clothing but you want to venture into the world of children’s clothing, keeping the stores as two separate entities. You could file a DBA and build a second website isolated from the first to target a different audience. Key Notes When Filing a DBA:
  • If you need to file a DBA, there are a few more rules you should be aware of. You cannot make your DBA a corporate name such as Jane Smith, Inc. or Corp., if your existing business is not a corporation.
  • In most states, filing a DBA may be required within 30-90 days of opening your business so make sure you check your state’s regulations. It is illegal to conduct any business using a fictitious name if a DBA has yet to be filed.
  • DBAs are typically filed at the state level and occasionally at the country level as well, so it is important to file your DBA in the state or country in which you conduct your business. Also, some states require the publication of your DBA.
  • You can expect your DBA filing to take approximately one to four weeks, so plan ahead!
  • Legally, you are required to identify your business with either your Social Security Number or an EIN (Employer Identification Number or Federal Tax ID Number), but small business advisors tend to recommend applying for an EIN and using that instead of your SSN.