If you’re starting your own business or already in the world of entrepreneurship, you’ve likely stumbled upon a few confusing things—like acronyms.
Don’t get us started. Actually, do.
You’ll probably encounter acronyms, like DBA, quite a bit, so it’s best to get acquainted with them early on—which is exactly what we’re here to help you with.
In this article, we’ll focus on Doing Business As (DBA), why businesses might need it, and what the benefits of this business acronym might be.
Ready for the DL?
What’s Doing Business As (DBA)?
Doing Business As (DBA) is when a business operates under a different name than its legal registered name, or one that’s different from its owner’s name.
A DBA is sometimes called your business’s assumed, trade, or its fictitious name.
So, why the need for an alter ego or, in business speak, a DBA? Well, lots of reasons.
Small businesses can use DBAs for brand recognition and marketing. For example, if Carly runs a catering business that’s known for its perfectly-packed charcuterie and speedy bike delivery, she’d probably want her branding to reflect something other than her business’s legal name.
By filing a DBA, Carly can use her creativity to come up with a catchy, fictitious name–like Keep Calm and Saucisson On–to better represent her offering and prompt delivery promise.
No matter the name you choose, DBAs let you really define who you are and what you do, which for small business owners, it’s a big part of success and future growth.
What types of businesses need a DBA?
Whether or not a business needs a DBA depends on a few things: the business’s legal entity, state requirements, and whether or not the business owner wants one.
Here are some more reasons why a business may or may not need to file a DBA.
Sole proprietorships and partnerships
If you want your company to operate under a name that’s not yours or your partner’s full, legal name, it’s time for a DBA.
Most sole proprietorships and partnerships are unincorporated, which means it’s not mandatory for them to file entity formation papers or a business entity name with their state.
Simply put, as the business owner, you and your business are one and the same—name included. So, if you’d rather not be named John Smith Co. for branding purposes and, well, general recognition purposes, filing a DBA can help you with that.
If you’re a franchise owner, you don't need a DBA, but it is common to file one so you can establish yourself as a local business.
This is because franchisees usually form as LLCs or corporations. So, let’s say you’re one of the 30 Quesadilla Queens* franchises in the state—you can form your franchise under 123 Quesadilla Queens LLC, for example, and then file your DBA as simply Quesadilla Queen. By filing a DBA, you’re letting your state know what you’re “doing business as” the franchise you’ve just joined.
*To our knowledge, Quesadilla Queens is not an actual franchise…but can it be?
Other legal entities
If you’re a corporation (either S or C), technically, you don’t have to file a DBA—unless your state, city, or county mandates you to do so. This is because you’ve already registered your business entity and name.
That said, if you want to file, you can! This would let you conduct business with a different name than the one on your incorporation documents. Registering a DBA is common if you want to expand or create a new name for one of your lines or branches of business. It’s helpful because it means you don’t have to form a brand new business in order to operate under a different name. This saves you time and money from launching an additional LLC or corporation.
Registering without a legal entity? Keep in mind that if you’ve never legally registered your business, but register a DBA, the state will assume your business to be a sole proprietorship.
Benefits of using a DBA
There are lots of benefits of using a DBA.
First off, it’s a much more simpler and cost effective way to start using your business name *officially* without having to incorporate or form an LLC. Filing a DBA also makes opening a business bank account a whole lot easier.
Next, filing a DBA can be better for marketing. Remember that Keep Calm and Saucisson On example we used earlier? Catchy names catch on, and lead to brand recognition and an understanding of what you do or sell, and why it’s unique. (Plus, who doesn’t love a good sausage and cycling pun?)
Then you’ve got the added flexibility. A DBA lets you add new brand names, lines, products, and even locations without having to form a subsidiary corporation. Speaking of expansion, if your business grows outside of your local state and finds that another business exists with the same name, you have the option of filing a DBA under a different brand name, so you don’t infringe on theirs. In other words, you can avoid a cease and desist.
How to file a DBA
The rules and requirements for filing a DBA change depending on state, county, city, and business structure. The cost can vary too, but generally, it’s around $10 to $100.
To get started, you’ll pay a visit to your county clerk’s office and file the paperwork, or you may do this step with your state government.
When it comes to rules, certain states have requirements. One is called “public notice” and requires you to provide the local community with an announcement of your business name. Now, don’t worry: you don’t need to hire a town crier—an ad in the local newspaper will do.
Another rule? Even if adding an Inc., LLC, or Corp. sounds really legit, it’s actually not. It can make people think that your business is a corporation or similar. So, if that’s not the case, leave out the extras. However, if your business is legally an LLC or corporation, it’s time to prove it. Before you file, you’ll need to show a certificate of good standing.
The 411 on filing
Filing a DBA is pretty simple, but here at Wave, we like to sprinkle in a touch of extra easiness whenever we can. With that in mind, here are a few extra tidbits of information that can make filing a DBA a breeze:
- Paying and filing: You might be able to do both of these online, but depending on your state, you might have to have a money order or cashier's check and/or provide notarized documents.
- Fines: If your business operates under an assumed name that hasn’t yet been registered, make sure to do so. If you don’t, you might be faced with some rather large fines from your state regulatory agency.
- Renewals: Most states have a renewal period for your DBA. Make sure you stay on top of those so there’s no impact to your business.
- Changes: If the information you originally filed changes (like you have a business partner or have incorporated), you might have to file a new DBA or make an amendment to the original filing. Check with your state for their local rules.
How to choose the perfect Doing Business As (DBA) name
The fun part: choosing the right name. Aside from making sure that no other business locally or in the state has the same name, you’ll want a unique name that reflects what you do or offer.
Remember, your name is a critical part of your marketing and branding strategy. More importantly, it’s part of the first impression you give to your future customers, who (hopefully) will be spreading the word about your business–including your name–with others. So, while you do want it catchy, you also want it to make sense.
Once you’ve decided on a name that no one else in the state has, you’ll register it so you’re the only one who has the authority to it locally. Pro tip? Trademark it, too. When you do that, you’re putting the brakes on anyone else in the state from using your company name and your logo, too.
Doing Business As (DBA) examples
Having writer’s block? We’re here to help with some inspiration and (not) real-life examples.
Filing a DBA when you don’t want to use your legal name
Meet Jane Doe. She’s a copywriter with a name that gets searched quite a lot. So, when it comes to marketing her business, she knows that if people search Jane Doe, they won’t find her words, but about 6 million other results. To fix this marketing mishap, she files a DBA under a fictitious name: Doe’nt Write Without Me. (Jane also specializes in puns, in case you missed that.)
Filing a DBA when you want to expand your business
Meet Lee. Lee owns a delicious cheese shop called “Real Gouda Cheese,” and he’s expanding his business to add a second location. Instead of forming a whole other business entity, filing a DBA can help him keep everything under his original business umbrella. We can’t wait to try “Even Better Cheddar.”
Doing Business As (DBA) FAQs
How much does a DBA cost?
Good news for your wallet–a DBA isn’t a formal business structure, so you don’t have to worry about incorporation fees and the like. The fee to file is relatively affordable, ranging from $10 to $100 depending on what state your business is located.
Is a DBA taxed?
No, a DBA is not taxed separately from your business. Because it’s not a legal entity, it doesn’t require any additional taxes. What you pay depends on how your business is structured. For example, if you’re a sole proprietor, you’re filing annually, unless your business doesn’t make money throughout the year.
Is a different DBA required for each state a business operates in?
Yes, you should file a DBA in each state that you do business–especially if you want your business’s DBA name protected in each state.
Does a DBA expire?
Yes, a DBA can expire. Each state has its own time frame for expiry, so you’ll want to make sure you’re organized and ready to renew before that happens.
In California, that would be a renewal after five years, but in New York State, they never expire so renewals aren’t necessary. That said, you need to file a Certificate of Discontinuance if you decide to shut down your business.
If you want to cancel your DBA, you have to contact your local or state office where you originally registered your DBA, submit the necessary paperwork and pay the fees, and then do the same for every state you’ve registered in.
To renew a DBA, the process is similar to the original filing. You’ll likely have to file paperwork through your state or local regulatory agency, sign it, then pay a fee. Some states might also require your renewal to be notarized, so be sure to check before you visit the office.
Take the next steps with Doing Business As (DBA)
Shakespeare asked, “What's in a name?” and, well, we have the answer: possibility.
Once you have your DBA, you’re able to operate under a name other than your business’s official designation, which opens the door to a whole myriad of marketing opportunities.
Imagine crafting a name and brand that reflects what you do and who you are; that your customers will remember and share with the community; that presents funny, unique, and memorable domain names for your beautiful website, promos and campaigns; and last but not least, that opens up the possibility for expansion under one business umbrella.
DBA’s sound pretty dreamy right about now, don’t they? We think so, which is why we’re here to make them even dreamier.
If you’re starting your business and need some advice from in-house experts, Wave can help. We’re here to help you manage your money like a boss so you can feel confident in being one.
So, ready to wow the world, [your name here]?
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The information and tips shared on this blog are meant to be used as learning and personal development tools as you launch, run and grow your business. While a good place to start, these articles should not take the place of personalized advice from professionals. As our lawyers would say: “All content on Wave’s blog is intended for informational purposes only. It should not be considered legal or financial advice.” Additionally, Wave is the legal copyright holder of all materials on the blog, and others cannot re-use or publish it without our written consent.