If you’re just starting out in your business, you may have heard that you need a DBA registration. DBA stands for “doing business as.” It’s a way to give your business a name other than your own. In this guide, we’ll break down what a DBA means, why you may want to register a DBA for your business, and some easy steps to help you get started.
[Read more: Starting a Business? A Guide to Business Licenses and Permits]
What is DBA, and when do you need one?
“Doing business as” is your business’s assumed, trade, or fictitious name. It’s like an alias for your business. “Essentially, getting a DBA is like Clark Kent conducting his hero work under the name Superman,” wrote LegalZoom.
There are many reasons why you might choose to register a DBA for your company. The most common scenario is in a sole proprietorship. Sole proprietorships are unincorporated; therefore, if you want your company to operate under a name that isn’t yours, you would need to file a DBA registration. A DBA can afford sole proprietors a degree of personal privacy as well as the benefits of using a more official-sounding business name.
In another scenario, a DBA can be useful if you decide to rebrand your registered LLC or corporation and branch out to a new market. A DBA would allow you to pursue a new direction than what your official name suggests. For instance, if you registered the LLC “John’s Lawn Care” and later decided to offer pool services, you could file a DBA for the name “Local Lawn Care and Pool Services.”
Franchisees also benefit from DBA registration. “Say, for example, you bought a local Burger King franchise,” wrote NerdWallet. “Franchisees tend to form as LLCs or corporations, so you form a franchise under 123 Business LLC, but you make your DBA ‘Burger King’ in order to let your state know that you are ‘doing business as’ the franchise you joined.”
Essentially, getting a DBA is like Clark Kent conducting his hero work under the name Superman.
Legal Zoom
How to file a DBA
The requirements for filing a DBA vary from state to state, city to city, and even depending on the type of business structure you use. The general process requires filing paperwork with your county clerk and state government. Expect filing fees to range from $10 to $100.
Some states require you to announce a “public notice,” informing your local area that you intend to register a new name. This notification process might mean that you take an ad in a local newspaper to officially announce your new business name for a certain period of time.
As you prepare to register your DBA, keep in mind that there are some restrictions as to what you can call your business. You aren’t permitted to register a DBA name that has a corporate ending (e.g., Inc., LLC, or Corp). This is to prevent a business from misleading consumers as to its corporate status. Likewise, it’s generally forbidden to register a DBA that uses banking-related words or words that could be associated with a governmental entity.
Before you get attached to your preferred DBA, search within your jurisdiction to ensure no one else has already filed for the same name.
[Read more: How to Trademark Your Startup Business Name]
Are there downsides to filing a DBA?
Filing a DBA is not the same as changing your business identity. A sole proprietor can’t file a DBA and establish personal asset protection. If something goes wrong in the course of running your business, you as the sole proprietor could still be liable in a lawsuit. DBAs are related to the naming of your business only.
The other potential drawback to registering as a DBA is that it doesn’t preclude another business from using your new assumed name as their own. “In fact, if you have a DBA filed with the state and someone decides to form a formal business entity under that name, you’ll actually have to choose another name, because the business formation process would reserve the name for that other company,” wrote ZenBusiness.
These considerations shouldn’t necessarily prevent you from filing a DBA, but you should be aware of the limitations of this type of registration as you build your business.
Can you change your DBA?
If there’s an error or typo in your DBA registration, don’t worry, there’s an easy fix. You can simply file a certificate of correction to the same authorities to make sure that everything is properly registered.
If you want to change your DBA name altogether, you can either wait to renew your DBA or follow these steps:
- If applicable, get formal approval from your shareholders, partners, or LLC members.
- File an amendment with the secretary of state and any other agencies that you originally filed your DBA with, plus the filing fee.
- Notify state regulatory agencies, tax authorities, licensing agencies, the post office, and other stakeholders of your name change.
- Update all of your marketing materials and business accounts, and notify your clients, suppliers, and vendors.
It can take some effort to redo your DBA registration, so do your research before filing the first time.
How long does a DBA last?
Most states require you to renew your DBA after a certain number of years. This time frame varies from state to state. The average is five years before you will need to renew your DBA registration — although, in New York, no renewal is necessary, as your DBA has no expiration date. Confirm the time frame in your area.
“Certain states also require you to file a new DBA if the information provided in the original filing changes, such as a change in officers (for a corporation), partners (for a general partnership), or members (for an LLC),” wrote NerdWallet. “Note that in some states, you can simply file an amendment under these circumstances.”
When you file your DBA for the first time, ask the clerk for the complete details. They can provide the timeline and steps for ensuring your DBA — and your brand — is protected in the long run.
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