In many states, the fictitious name registration lasts for a limited time and must be renewed, or it will expire. Registering for a DBA allows you to transact business under the fictitious name instead of your personal name. Q2 2022 Digital Transformation Index Reveals Trends Disrupting Automotive Finance. This may influence which products we write about and where and how the product appears on a page. Legally, you are required to identify your business with either your Social Security Number or an EIN (Employer Identification Number or Federal Tax ID Number), but advisors to small business owners tend to recommend applying for an EIN and using that instead of your SSN. This fulfills the public notice requirement for some states giving the local area an official announcement of your business name. If you register a DBA without first forming as an LLC, corporation, or some other legal entity type, the state youre doing business in recognizes your business as a sole proprietorship. This is usually in the form of a good standing certificate that you can request from the secretary of state. Also keep in mind that if you register a DBA without first forming some type of legal entity, your state will automatically recognize your business as a sole proprietorship. Some states allow you to pay online, while others may require a money order or cashier's check. Banks often will require you to show them the DBA filing or assumed name certificate as proof you registered the name. We believe everyone should be able to make financial decisions with confidence. DBAs provide flexibility for both sole proprietors and larger corporations. Editorial Note: The content of this article is based on the authors opinions and recommendations alone. LLCs and similar corporate structures provide your business with a suite of legal protections and help remove personal assets from business liabilities. Here is a list of our partners and here's how we make money. Specialized in clinical effectiveness, learning, research and safety. Almost every state requires that a business file a DBA if it wants to conduct business under a name that is different from their currently registered one. Filing for a DBA allows you to conduct business under a name other than your own; your DBA is different from your name as the business owner, oryour business's legal, registered name. Also keep in mind that,depending on where you live, you'll need to comply with your stateDBA requirements. After that, make sure youre staying compliant by operating under your business name and check with your state government offices to see if you need an annual renewal. There are no limits to the number of DBAs or assumed names you can use. The forms may be different too. Themost common caseof a corporation or LLC registering a DBA name is when the business wants an alternate name for a specific line of their business. In the case of a corporation,limited liability company (LLC ) or other statutory entity, the legal name is the one on its formation document (e.g., itsarticles of incorporationor articles of organization). Don't know if your business is incorporated? The shareholders, members or partners are not. For more information please see our Advertiser Disclosure. If you have a sole proprietorship or a general partnership, you are legally required to operate under your personal name. Our partners cannot pay us to guarantee favorable reviews of their products or services. So, if youre incorporated as Johns Cosmetics Inc. and sign a contract with a client as Johns Skincare Solutions, without registering the latter as your DBA, then that contract wont hold up. /Feature/WoltersKluwer/OneWeb/SearchHeader/Search, The worlds most trusted medical research platform, Evidence-based drug referential solutions, Award-winning infection control and monitoring, Cloud-based tax preparation and compliance, workflow management and audit solution, Integrated tax, accounting and audit, and workflow software tools, Tax Preparation Software for Tax Preparers, Integrated regulatory compliance and reporting solution suite, Market leader in UCC filing, searches, and management, eOriginal securely digitizes the lending process from the close to the secondary market, Software solutions for risk & compliance, engineering & operations, and EHSQ & sustainability, Registered agent & business license solutions, Market-leading legal spend and matter management, contract lifecycle management, and analytics solutions, The most comprehensive and detailed resource for IP professionals, Wholesale drug distributor licensing requirements. With workflows optimized by technology and guided by deep domain expertise, we help organizations grow, manage, and protect their businesses and their clients businesses. However, any business formed under one of these entities still has the option to register a DBA name. Here is a list of our partners. What motivates a sole proprietorship to opt for an assumed name, for example, is different from what motivates a corporation or LLC. That's becauseseparating your business and personal finances will protect your personal assets in case of a lawsuit, preserve your personal credit score if your business fails, make your bookkeeping and taxes that much easier and generally make you look more professional in the eyes of your clients (and small-business lenders). But maybe you want to do business as Johns Flowers and Gardens. Some banks require separate bank accounts for businesses with different names, but this isn't always the case. But remember, in some states a DBA filing does not provide any protection against someone else registering the same name.

Many wonder why filing a DBA is even necessary, but keep in mind that conducting business under an unregistered name is illegal. The following states do not require DBAs to operate under a fictitious name. You cannot make your DBA a corporate name such as Jane Smith, Inc. or Corp., if your existing business is not a corporation. Our quarterly Automotive Finance Digital Transformation Index provides timely insight into rapidly shifting consumer preferences and technology trends. We strongly advise speaking with your accountant or attorney to determine whether a DBA registration is the right choice for your business. To use a domain name as a DBA, enabling operations as another business or website. Scale your business: If you currently or ever plan to operate multiple businesses under a single umbrella entity, a DBA can make things easy for you. Conduct business under a chosen name: Sole proprietors and general partnerships are required to conduct business under their personal names. Sole proprietorship file taxes annually. But the law in most states is that unless the DBA name is registered, which is done by making a filing in the state, a person can only do business under his or her own name, and corporations and LLCs can only do business under the name on their formation document. In others a whole new registration is required. DBA registration requirements will differ from county to county. But if you plan on operating under a different name than your personal name, either an LLC or DBA is required. DBA filings for a corporation orLLC often require proof that the corporation or LLC is in good standing. The scoring formula takes into account the type of card being reviewed (such as cash back, travel or balance transfer) and the card's rates, fees, rewards and other features. Filing a DBA name isnt hard you just need to work within your state or countys requirements to go about it the right way. Note that these reasons often vary depending on business type. DBAs primarily allow for businesses to operate under a fictitious name. NerdWallet's ratings are determined by our editorial team. Our solutions for regulated financial departments and institutions help customers meet their obligations to external regulators. To do business under a DBA, you must complete and file the appropriate DBA forms and pay a filing fee, after which point you receive a DBA certificate. You should file a DBA if you don't want to operate under your own name or the name under which your business is legally registered. This article originally appeared on JustBusiness, a subsidiary of NerdWallet. DBAs are usually filed through your county clerk's office. DBAs allow for businesses to operate under a chosen name. However, business owners under a DBA do not have that flexibility and will continue to be taxed under whatever their current tax status is. This is a particularly important decision for sole proprietors and general partnerships. And while our site doesnt feature every company or financial product available on the market, were proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward and free. Filing a DBA is incredibly easy, especially compared to other complicated legal forms and registrations, so the good news is that you likely won't need a lawyer. So for privacy reasons may want to give your business a different name. DBAs do not provide additional protections.

Forming an LLC will be more costly, both in terms of money and time, than filing a DBA, which can be filed within minutes and will usually cost less than $200.

A DBA name enables you to use multiple names for one business. Sole proprietors are the most common applicants. Often a Doing Business As name is used when a corporation or LLC wishes to enter a new line of business or to market new products or services that your current business name does not represent. TeamMate Audit Benchmark: Responding to change for Financial Services, TeamMate Audit Benchmark: Responding to change, Advice for tax professionals struggling with long IRS phone wait times, Illinois credit package seeks to attract microchip manufacturers, OneSumX for Finance, Risk and Regulatory Reporting, CFO Conversations: the next evolution of planning (xP&A), The 5 biggest hurdles to effective ESG reporting, Finance transformation: Unleashing the potential of data, From four weeks to six days: How Evapco accelerated the financial close with CCH Tagetik, What is good standing and why your business needs it, A new generation of quality and customer experience (CX): Best practices in customer service and support, All-states smart chart: Entity naming requirements for corporations and LLCs, The Graz discussions on private enforcement of competition law, Infographic: Goals and challenges of the matter lifecycle stages, How corporate legal departments can adapt to high levels of law firm turnover, The importance of creating strong billing guidelines and compliance, Executive summary: How to create billing guidelines that drive value. Ideally, your business's name should reflect your product or service, and give people a reason to become paying customers. File a DBA to operate your business under new or additional name. Assumed name (DBA) laws are consumer protection laws. No, a DBA is not a legal entity. If theres any hope that your original venture will want to expand into multiple websites, stores, services, restaurants and so on, youll want to register each under a separate DBA name. 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. DBAs are filings that, when registered, mean a sole proprietorship, general partnership or LLC is operating under a fictitious name. If your business is incorporated, you won't have to worry about this as you'll be able to choose your own name when you incorporate. In most cases, separate bank accounts are only required for separate tax ID numbers. DBA (Doing Business As): What Is It and How Do I Register? If youre starting a business for the first time, you have important legal decisions to make. To notify the public of your DBA name and brand. Only limited material is available in the selected language. Business banking: Most banks require an Employer Identification Number (EIN) if you are looking to open a business checking account. Having a more descriptive name could be beneficial. No, a DBA is not a business license and it simply allows for businesses to operate under a different name. Enabling organizations to ensure adherence with ever-changing regulatory obligations, manage risk, increase efficiency, and produce better business outcomes. You could file a DBA for Plowing Specialists for that portion of your business. Yes. Priyanka Prakash is a writer specializing in small-business finance, credit, law and insurance, helping business owners navigate complicated concepts and decisions. When evaluating offers, please review the financial institutions Terms and Conditions. Below, we'll dig deeper into the DBA meaning, when your business needs one and a few more reasons why filing a DBA is a good idea for any business. Other than that, there arent any restrictions on what you can file for a DBA name.

You'll have to transact under John Doe. Once youve been approved for your DBA name, youre all set to start operating your business meaning you can open your doors, take on new clients and set up your business bank account. Filing a DBA takes care of that issue. Similarly, you cant use a name that indicates your business is owned by an LLC if it is not. The process is simple enough that most business owners can handle it on their own. That would allow them to do business under a name other than the name on their incorporation documents. Registering and doing business under a DBA name is not the same as forming a business or a business entity. Doing business as (DBA) refers to businesses that operate under a fictitious name, while limited liability company (LLC) refers to legal entities that are entirely separate from business owners. Note that in some states, you can simply file an amendment under these circumstances. OK92033): Licenses, NerdWallet Compare, Inc. NMLS ID# 1617539, NMLS Consumer AccessLicenses and Disclosures, California: California Finance Lender loans arranged pursuant to Department of Financial Protection and Innovation Finance Lenders License #60DBO-74812. In some states, filings are made in different offices for sole proprietors and general partnerships than they are for corporations, LLCs and other statutory entities. Most states also require new filings if there is a change in the information set forth in the original fictitious name filing, such as the business address, or the legal name, or a change in officers (for corporations), partners (for general partnerships) or members (for LLCs). The answer is dependent on the bank that you use. Learn more about third-party logistics provider licensing requirements and the drug supply chain security act. And if so, making the appropriate filing to register the DBA name, and making sure the registration does not expire are crucial steps. It does not register a business as a separate legal entity. In some states, you might also have toplace a fictitious name adin a local newspaper for a certain amount of time. Advertiser Disclosure: Some of the offers that appear on this website are from companies which ValuePenguin receives compensation. DBA costs vary by state, county, city and business structure, but in general, registering a DBA comes with paperwork and filing fees anywhere from $10 to $100. Its usually best to get this all done before you operate under your intended doing business as name; somewhere between 30 and 60 days before you open your doors. In this article, well define what a DBA name (or fictitious name) is, what its not, cover the major reasons you might want to consider using one, and provide key tips for registering your DBA name which you will be required to do in the states where you are using it. 2022 Wolters Kluwer N.V. and/or its subsidiaries. Property, casualty, life and health insurance services offered through NerdWallet Insurance Services, Inc. (CA resident license no. You won't be able to file with a name that includes "LLC" or "Inc." unless your company is set up as an LLC or corporation, respectively. Unregistered fictitious names can be used on some documents. $139 plus state and or county fees, publication fees and a $25 name check fee in certain states. DBA means "doing business as," and filing a DBA allows for a business to officially operate under a name of the owner's choosing. DBAs are also referred to as an assumed name, fictitious business name or trade name. They can choose to be taxed as a sole proprietorship, corporation or partnership. Businesses must also submit tax returns to their state, and some states may require quarterly or annual tax returns. You want a more distinctive name. If sole proprietor Laura Smith kept her businesss name as just Laura Smith, who would know what she offered until they walked into her shop? In this article, we'll focus on the acronym DBA. There may be applicable renewal fees every several years as well. Forming an LLC,limited partnership (LP),limited liability partnership (LLP), or corporation (whether it is aC corporationorS corporationfor income tax purposes) grants the owner or owners of that business entity limited liability protection. Registering your DBA alone doesn't legally protect your business, but it might be legallyrequired, depending on the state, city or county in which you operate, as well as your business entity. The purpose of registering a DBA name is to notify the public that a particular person or business entity is conducting business under a name other than its legal name.

Again, these reasons will vary in relevance to your company depending on your legal business entity type, what kind of business youre in, and your growth strategies. Find accepted forms of payment and filing methods. Health Savings Accounts: 2023 cost-of-living adjustments. Our opinions are our own. Wolters Kluwer is a global provider of professional information, software solutions, and services for clinicians, nurses, accountants, lawyers, and tax, finance, audit, risk, compliance, and regulatory sectors. Typically, you'll need to incorporate your business in order to protect the name of your choosing. Many or all of the products featured here are from our partners who compensate us. All financial products, shopping products and services are presented without warranty. Now that you know how to file a DBA, let's explore a handful of need-to-know tips about DBAs: In order to get a DBA as an LLC or corporation, you typically need to provide a certificate of good standing. In addition, some clients, partners or lenders require that sole proprietors and general partnerships have DBAs filed before doing business with them. Partnerships, LLCs and corporations submit annual tax returns to the IRS but may also have to pay quarterly taxes if they expect to owe taxes at the end of the year. LLCs offer far more legal protections to business owners than DBAs do. Additionally, business owners can choose how they want to be taxed when forming an LLC. A DBA is not a legal entity and cannot have its own tax ID number. Note: if youre planning to grow the business into additional states, youll also need toForeign Qualifying each respective state.

No. It depends on a combination of the business's legal entity, the locale's requirements and the business owner's preference. There are several different types of business licenses, and you'd need to check with local municipality, state and federal laws to see which ones your specific business would need to apply for. Unlike sole proprietorships and general partnerships, these business types have already registered their entities and business names with the state. Every corporation, LLC or other statutory business entity is prohibited from doing business in a state without being qualified. (Though they do still need to acquire the necessary. If you want to use a different name you will have register your DBA name in that state by filing the appropriate documents. This usually applies to all companies. For example, Johns Cosmetics Inc. might want to have a separate name for its upcoming skin care line, Johns Skincare Solutions. This saves an expanding business both the money and time it takes to launch a whole new business under an additional LLC or corporation. To get an insurance quote over the phone, call: (855) 596-3655 | Agents available 24 hours a day, 7 days a week! You also produce handbags for tweens and teens. You dont want to do business under your personal name. What are APIs, and why are they important to accountants and CPA Firms? So, if Laura Smith wants to start a tech repair business, her business will operate under her own name, unless Laura chooses to register her DBA name asLauras Tech Repair Shop. After registering her DBA, Lauras full name isnt legally attached to her businesss name. Your business structure will determine how often your business has to file taxes. The site does not review or include all companies or all available products. Having a DBA name can provide additional credibility for sole proprietorships and general partnerships. Registering your DBA alone doesn't legally protect your business, but it might be legallyrequired, depending on the state, city or county in which you operate, as well as your, or general partnership, you'll need to file a DBA if you want your company to operate under a name that's not your or your business partner's full, legal name. Be proactive about this. These can include both civil and criminal penalties. A limited liability company (LLC) does exactly that, and it can provide numerous legal protections like removing personal assets from business liabilities. Its probably best to do a simple business name search within your jurisdiction to make sure no other business has your DBA name, though. Our partners compensate us. The corporation, LLC, LP or LLP owns the business and is responsible for the business debts. NerdWallet's ratings are determined by our editorial team. Depending on your state, county, city and business structure, youll either go to your county clerks office to file the paperwork to apply for a DBA or youll do so with your state government. Grant naming rights: Depending on your county or state, a DBA will not protect your business's name. Five years is a common term. Also, when you form an LLC, you'll have the opportunity to register your business under a name of your choosing. Your business name is a valuable asset that you want to protect. Some state/county filing requirements mandate that you announce it with a local newspaper or publication, to provide public notice of the DBA filing. Unless the state, city or county requires it, corporations (both S corporations and C corporations), limitedpartnershipsand limited liability companies, or LLCs, technically dont need to file a doing business as name. Despite the relatively simple purpose of a DBA, it has multiple benefits. Enabling tax and accounting professionals and businesses of all sizes drive productivity, navigate change, and deliver better outcomes. (Though they do still need to acquire the necessary business licenses and permits.). Your business's legal name in the states where you qualify will be the name on your company's certificate of authority. Pre-qualified offers are not binding. There are additional minor benefits that can be found here. Third-party logistics provider licensing requirements. DBA requirements vary by state, county, city and business structure, but in general, registering a DBA comes with paperwork and filing fees anywhere from $10 to $100. St. Dominic Hospital improves patient safety, pharmacy cost savings, and antimicrobial stewardship efforts, Enforcement of information blocking and the impacts on accessing health information, Why your EHR is not enough to improve sepsis outcomes, Prevention of Legionnaires' infections in healthcare facilities, Narrow definition of Brokerage Services for IRC 199A does not apply to IRC 1202. Not all businesses need DBAs. Depending on the state and type of business conducted, filing a DBA isn't usually necessary. This fulfills the public notice requirement for some states giving the local area an official announcement of your business name. Imagine that your LLC makes and sells women's handbags. This is useful in the event your company name is not available as a domain name, or if you want to expand your business into e-commerce. It's also relatively inexpensive. Read more. Your legal name in the states where you qualify will be the name on your companys certificate of authority. A DBA is not a legal entity, but you will have to file taxes whether you filed for a DBA or not. And without an EIN, you can't open abusiness bank account. Sole proprietorships and general partnerships don't need to file DBAs to operate under fictitious names. Businesses aren't required to file a DBA to operate under a different name. After filing, you should hear back from the approving body within six weeks. Note that if your business expands to other states, you'll need to file aforeign qualification in each new state to avoid steep penalties. If you're unsure of how to find your county clerk, check your local secretary of state's office. Registering a DBA name is a public notification to other businesses that the name is in use, as the DBA name becomes part of the public record. Say you own a restaurant but now want to open an ice-cream shop. Thats because sole proprietorships and general partnerships are unincorporated, and they don't need to file entity formation papers or a business entity name with the state. Some states or counties let you pay the filing fee by debit or credit card; others require a money order or cashiers check. Health Savings Account (HSA) contribution limits and amounts that determine whether a health plan is an HSA-eligible high-deductible health plan are set to increase in 2023. Be sure to stay on top of when you must renew your DBA, as letting it lapse can have a severe impact on your business from a marketing perspective.

This compensation may impact how and where offers appear on this site (including, for example, the order in which they appear). But youre (probably) not a lawyer, and you might be unfamiliar with all the legal terms and acronyms that get thrown around,from choosing between an LLC or sole proprietorshipto filing a DBA. Also, even if your local county or state protects your business's name with a DBA, it does not mean that the name is protected outside of the county or state in which you filed the DBA. About the author: Priyanka Prakash is a writer specializing in small-business finance, credit, law and insurance, helping business owners navigate complicated concepts and decisions. That is, unless you register your business as a certain legal entity (more on that below), or if you rename and register your business with a DBA.

Using a DBA name can be an important part of your business strategy. Subscribe to BizFilings' newsletter for compliance updates and tips on running your business effectively. If you operate under an assumed name that has not been registered, you can get hit with big fines from your state regulatory agency. This is especially helpful when your company name is not available as a domain name. The two likely can't function under the same name, so you'll have to file a DBA to own two separate registered businesses with different names. Visit our global site, or select a location. In this article, we'll focus on the acronym DBA. The business owner would need to follow the steps to register their business as an LLC, which is a more time-consuming and extensive process than filing a DBA. Owners of LLCs or corporations have certain legal protections such as safeguarding the owner's personal assets if the business is sued. Say, for example, you bought a local Burger King franchise. If the assumed business name is already taken, a DBA must be filed to change to an unused name. That is one of the major benefits of forming a company. All rights reserved. Registering a DBA allows businesses to operate multiple firms under one ownership,without having to form a separate business entity each time they expand. The legal name may be long, hard to spell or pronounce, difficult to remember, or not search engine friendly. There are many reasons why doing business under aDBA (Doing Business As)name may be a good decision for a company. Are DBAs and sole proprietorships the same?

We recommend thateverybusiness owner opens a business bank account separate from their personal bank account. 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). If you are a sole proprietorship, you are legally required to operate under your name unless a DBA is filed. As a sole proprietor, you can legally conduct business in that state under your fictitious business name, but you wont have any limited liability protection. However, if you're confused about the process or have a more complicated business situation, it's always a good idea to seek professional help. Pre-qualified offers are not binding. While franchise owners don't need a DBA, it is common they file one in order to establish their identity as a local business. SBA Loan Overview: Types, Pros and Cons, How to Apply, 7 Ways to Improve Your Small-Business Website. Before settling on a name, research it to be sure no one else in your area does business under that name. When your business is in its infancy, who knows where youll be in five years? Since earning her law degree from the University of Washington, Priyanka has spent half a decade writing on small-business financial and legal concerns. Besides these scenarios, there are a few crucial reasons why you should consider registering a DBA name. Every business has a legal or true name.
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