DBA or “doing business as” is a term used to set up a fictitious name for a business so that it can use this new name instead of the legal one for any kind of formal process, bank transactions, submitting of taxes, and so on. It is vital to know how to file a DBA in case you may need one.
For getting the DBA, one will need to go through the process of fictitious name registration. Several businesses have already signed up for this named entity, and hence, it’s time for your business to do the same.
What Is DBA?
Before moving forward with our discussion of how you can complete the fictitious name registration for your business, we will talk about the details of DBA first.
Let’s say your business name is “XYZ.” However, for some reason, you cannot use this type of name in the industry. This is where you will opt for DBA registration. Here, you will choose a new name for your business from the search directory, and once you are sure about it, you will start with the filing process.
DBAs are used for multiple businesses, like a sole proprietorship, Limited Liability Company , or any other such type of registered company.
Importance of Setting Up a DBA
No matter you are involved in non-profit organizations or a Limited Liability Company (LLC), DBA has proven to very essential for several businesses. Here, we will discuss the importance of the relevant business names that you can register for.
Easy Registration
Every LLC (Limited Liability Company) is asked to process the name’s online registration. However, this particular method is very difficult since one has to consider a great set of rules for ensuring your business doesn’t get involved in any legal conflict. This is why many businesses come up with the DBA since, with this, you wouldn’t have to worry about the registration process.
Operation of Multiple Businesses
If you want to establish multiple business types, it is the DBA that will help you to do so. This fictitious name will make sure different forms of your business are known by unique names, be it a sole proprietorship, multiple LLCs, or anything related to that.
Perfect for a Sole Proprietorship
For sole proprietorship business owners, DBA serves as a great tool for keeping themselves separated from the business and avoid paying personal income tax through the profits earned by the business.
Helps in Keeping the Business Compliant.
If you want to keep your main business and the additional businesses compliant, registering yourself for DBA will be a great idea. Make sure to choose a unique name so that no problem arises with the compliance factor.
Helps in Introducing a Creative Name
In most cases, a professional business advisor will always suggest you look for a DBA name since that will provide you better flexibility in handling business license , business taxes , business filings, and so on.
How to Set up a DBA?
For setting up the DBA name, you will need a proper business strategy. That is why here we have come up with the three most important steps you need to follow as potential business owners to get the fictitious DBA name.
- Select your state
What you must first do is choose is the state where you are going to open the business office. It doesn’t matter whether it’s a foreign LLC or a domestic LLC; you can file for DBA in both cases. State selection is very important because the taxes and other types of details will vary from one to the other.
- Choose a proper DBA name.
What you must do next before filing up the DBA forms is to choose a proper name for representing your business. You need to check whether the name you have chosen is available with the domain list or not. Also, the name you have chosen shouldn’t match with any government entity and must not be similar to another business.
- Register your DBA with the state authority
Once you choose the proper name after complying with all the rules, you will have to look for the registration process with your county or city’s clerk office. Depending on the state, you might have to register your company with multiple government tiers.
For What Businesses Can DBA Be Used?
The DBA name can be used for many businesses. Here, we have explained a list of all those structures where DBA is applicable.
- Sole proprietorships
- General partnerships
- Limited Liability Companies
- Non-profit corporations
- Limited partnerships
- Limited Liability Partnerships
DBA Taxes
IRS explains the taxation structure for the business and how they operate. However, as DBA is a name and not a business structure, you won’t have to file any tax report for the same.
F.A.Qs
Are the DBA and LLC the same? No, DBA and LLC are not the same. DBA is nothing but a fictitious secondary name which any business can adapt for several reasons, including the LLC, like:
1. Finding the proper domain name
2. Maintaining privacy
3. Separating the business entity from yourself
4. Easy name registration
5. Increasing the credibility
On the other hand, LLC is a company opened by a single or multiple members for protecting their personals assets and yet continuing with a business without having to worry about debts, lawsuits, and others.
Does Can DBA have Inc. in the name? No, it isn’t mandatory for the DBA to have Inc. as a part of the name. DBA can be any name as long as it does not represent a government entity or an already formed business.
When to file for a DBA? DBA should be filed when you want to open multiple businesses under a single parent company, or you are not finding a suitable domain name for your business.
How to Add a DBA to an LLC
To add an DBA to your LLC you need to select the name of your choice and search for its availability. You will be required to fill the DBA form and submit it to Secretary of State office along with your registration.
Before you determine how to add a DBA to your LLC, it’s important to understand the reasons why you might want to do so. First and foremost, a DBA name can make your business more recognizable to customers. If your legal LLC name doesn’t clearly convey what your business does or if it’s hard to remember, a DBA can provide a simpler, more marketable alternative.
Additionally, a DBA can help you differentiate between different products or services that your business offers. By using separate DBA names for each line of business, you can make it easier for customers to understand what you do and how they can engage with your company.
Once you’ve decided that adding a DBA to your LLC is the right move for your business, the process is relatively straightforward. The first step is to choose a suitable DBA name that complies with state regulations. Your DBA name should not be already in use by another business, nor should it contain any restricted words or infringe on any trademarks.
After you’ve settled on a DBA name, you will need to file a “Doing Business As” registration form with the appropriate state or local government agency. The requirements for registering a DBA name vary by location, so it’s essential to research the rules and procedures in your specific area. In some cases, you may need to publish a notice of your new DBA name in a local newspaper for a set period of time to inform the public.
In addition to registering your DBA name with the appropriate authorities, it’s a good idea to update your business records and establish a consistent brand identity across all platforms. This includes updating your LLC’s operating agreement, bank accounts, contracts, and any marketing materials to reflect your new DBA name.
It’s also essential to consider the legal and financial implications of adding a DBA to your LLC. While a DBA name does not constitute a separate legal entity like forming an LLC or corporation does, it does create a new business identity that you will need to manage. Make sure to keep accurate records of your DBA registration, and ensure that you comply with any tax or licensing requirements associated with your new DBA name.
Overall, adding a DBA to your LLC can be a valuable tool for branding and marketing your business. By following the proper procedures and staying informed about state regulations, you can seamlessly integrate a new DBA name into your existing LLC structure and unlock new growth opportunities for your company.
In Conclusion
Doing Business As is required if you are running a business as a separate entity. The process is pretty easy and explained in this article. To file a DBA one has to name it first. It is strongly recommended for any structure of the business to name your DBA. Also, as this is not a business structure itself, it does not involve tax filing.
