What is a DBA (Doing Business As) name?
DBA stands for “Doing Business As” and is an official registration of your business name. In some states, this can be referred to as a “fictitious business name” or “assumed” name. A DBA name is different from your personal name. If your business conducts any business – such as transactions, marketing, advertising, or printing out business cards – under a name that isn’t your own name, you will need to file and register a DBA in the state or county you’re doing business in. A good example is if Jane Smith wanted to start “Jane’s Tax Services,” she would need to file for a DBA. Once you have conducted a name search and filed for a DBA, you’ll be able to claim the name for yourself. This helps to reduce any potential chances of fraud.
What are the benefits of filing as a DBA?
The benefits vary depending on who is filing. A sole proprietor can operate under a name other than their legal name which can have many benefits, including added credibility and professionalism, as well as level of separation or anonymity. Filing a DBA also means a sole proprietor can open up a separate bank account under the business name (requirements vary), allowing your customers can make payments to the business itself, instead of to you personally. For an established business, a DBA can allow you to conduct business under any number of alternate names in addition to the one filed with the original formation. That means as a business expands into other markets or takes on new business ventures, the business owner can add additional names or lines of business with ease.
Does a DBA keep others from using my business name?
A DBA is simply a name that identifies a business, and does not protect the name from being used by other businesses. In order to protect your name, you would need to consider incorporation, or filing a trademark.
What kinds of businesses should file a DBA?
Since a DBA is a business name only, there are no added maintenance requirements, tax implications, or a formal business structure to put into place. This can be an advantage for a sole proprietor, freelancer, or partnership that plans to start a business under a name that isn’t their real name.. An existing LLC or Corporation can also file a DBA when the business wants to conduct business under a different name than the one registered during the original formation.
What are the requirements of filing a DBA?
A DBA can be almost any name under which you are doing business. You cannot, however, make your DBA a corporate name such as XYZ, Inc. if you do not have a corporate name that is XYZ, Inc. In other words, when filing a DBA do not add “Inc.” or “Corp.” to your name to create the impression that your business is a corporation when, in fact, it is not.
What is an example of a DBA and how it works?
As an example to demonstrate the usefulness of a DBA, let’s imagine that Jane Brown was a pastry chef who wanted to open her own shop called “Donuts Unlimited.” She wants to eventually open a bank account and accept payments on behalf of Donuts Unlimited, so she files a DBA : “Jane Brown, doing business as Donuts Unlimited.” By filing her DBA, she is able to set up a bank account for her business, and cash checks written to Donuts Unlimited.
In another example, lets say there is a corporation named “ABC, Inc.,”. Later on in the existence of this business, they expand into the business of selling XYZ. They could form a second company, but that would mean that all of their maintenance formalities and annual requirements would double. That may be fine, but in this case they would be able to file a DBA : “ABC, Inc., doing business as ‘XYZ.’ This would allow them to conduct business under this additional business name without forming a new entity.
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