A “doing business as” (DBA) name – also known as an assumed or fictitious business name - allows you or your company to do business under a different name. The law in most states is that unless a DBA filing is made, a person can only do business under his or her own name and corporations and limited liability companies (LLCs) can only do business under the name on their formation document.
There are many reasons why business owners file a DBA, and they vary by business type. What motivates a sole proprietor to opt for a DBA, for example, is different from what motivates a corporation or LLC. Here are some of the most popular reasons for filing a DBA.
When to file a DBA
- You want to use a business name and not your personal name. As a sole proprietor, your name and your business name are legally the same. For example, if you are John Smith and you have a consulting business, the name of your business is John Smith. The same is true for general partnerships. The business name is the same as the partners’ names. Filing a DBA allows you to transact business under the DBA name instead of your personal name.
- Your bank requires a DBA to open a business bank account. For a sole proprietor or the partners in a general partnership to open a business bank account, banks typically require a DBA.
- A prospective client requires a DBA to award you a job. Some clients may require you to have a DBA in order to contract with you. If you’re a freelance graphic designer, for example, you bid to do work for a local corporation. You may be required to have a DBA—but it’s more common that you’d be required to incorporate your business or form an LLC.
- Your company is entering a new business area not reflected by your current name. As a corporation or LLC, you may eventually expand to a new area not represented by your current business name. Having a more descriptive name could be beneficial. For example, suppose you have a sprinkler system installation and repair business, Summer Sprinkler Systems Inc., and plan to offer snowplow service in the winter. You could file a DBA for Plowing Specialists for that portion of your business.
- Your company operates another business or website. You may have another business or website that you’d like to operate in addition to your existing one. Imagine that your LLC makes and sells women's handbags. You also produce handbags for tweens and teens. Knowing they would never purchase from the same company or website as their moms, you file a DBA and create a separate website specifically targeting this audience.
How to file a DBA
To do business under a DBA, you must complete and file the appropriate paperwork and pay a filing fee. This is typically done with a local or county agency; however, some states require a filing with a state agency instead of or in addition to the county. If the filing is being made for a corporation or LLC it may have to file proof that it is in good standing. Upon completion of the filing, you may begin using your DBA name.
Additionally, some states/counties may require you to publish with a local newspaper, providing public notice of the DBA filing. In many states, the name registration lasts for a limited period of time (5 years is a common term) and must be renewed or it will expire. Some states also require filings if there is a change in the information set forth in the original filing.