How can I benefit from a DBA?
Registering a doing business as name is very common for entrepreneurs and small business owners. A DBA for your business can offer numerous benefits, including:
- Cost-effectiveness: Changing a business name can be expensive, especially if you have to make Articles of Amendment which can cost several hundred dollars and take time.
- Versatility: You can have multiple DBAs for one business or use a DBA for some business activities while retaining your formal name for others. This can be useful if you operate in multiple markets or geographic areas.
- Exclusive use of a brand or name: A registered DBA limits others from claiming a name for their business.
- Avoid legal headaches: If you plan to expand your operation to a new city, county, or state, but another business in that area already uses your business’s name, a DBA can help. A DBA can allow you to expand into that new location under a new name.
- Privacy: If you are a sole proprietor, many states may require you to use your own name for business activities, but a DBA can shield your identity, though not your liability.
The process for filing a DBA application varies depending on your location. There may be requirements from your city, county, or state government. Typically, the DBA filing process requires business owners to:
- Research your name: The first step is to see if anyone else is using the name you want. You can check local and state records for DBAs and business entities that might have the same or a similar name. You may also want to check trademark records for similar names.
- Research your location: Depending on how widely you want your DBA to apply, the requirements vary. A DBA filed with your city or county will only be effective in that local jurisdiction, while one with the state will be valid statewide. Registering a trademark for your name can provide even greater protection.
- Prepare to renew: A DBA name remains valid for a period of time that varies from state to state. You may be required to renew your DBA registration every few years.
- Complete the application: Complete your DBA application from your city, county, or state when you are ready. This requires paying a filing fee, so it is best to do your research and understand your requirements before applying.
Does a DBA provide liability protection?
A DBA does not provide any liability protection on its own. If you are running a business as a sole proprietor or general partnership, meaning that you have not created a formal legal business entity, you are personally liable for business debts. While you can still register a DBA, it does not provide any personal liability protection.
You can still use a DBA when you form a corporation, LLC, or other business entity. In that situation, the entity protects you from liability. The DBA allows you to engage in business activities using a name that is different from the entity’s official name.
Can I have multiple DBA names under the same LLC or corporation?
You can file multiple DBAs for the same business. You can have as many DBAs as you want as long as you filed the proper paperwork.
More than one DBA can help your business engage in different markets or industries. For example, if you have a corporation named Smith and Sons, Inc., you might want more than one DBA in the following situations:
- Your business operates two different kinds of restaurants, so you register the DBAs “Smith Family Fine Dining” and “Smith’s Burger Barn.”
- You have retail locations in several cities and towns, but you want to keep your branding local: “Smith’s Hardware of Springfield,” “Smith’s Hardware of Centerville,” and “Smith’s Hardware of Franklin.”
- You have a diverse array of business activities operating under one entity, so you register the DBAs “Smith’s Citrus Farm,” “Smith’s Jet Ski Rentals,” and “Smith and Sons Moving Company” to differentiate each of them.
What are the next steps after filing my DBA?
Once you have an official DBA, you might consider the following steps:
- Review your contracts: If your business has active contracts, such as a Lease Agreement, you might want to notify your landlord or other vendors or clients about your new business name.
- Notify the IRS: You might need to get a new Employer Identification Number (EIN) for business activities conducted under the new EIN.
- Seek trademark protection: Registering a DBA only keeps others from using your name for their businesses where it is registered. Trademark registration provides much more comprehensive protection.
A DBA can be a great way for a business to establish or expand a brand. To learn more about whether a DBA might be right for you and your business, reach out to a Rocket Lawyer network attorney for affordable legal advice.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.