Connect with us

Resources

What is a “Doing Business As” Name? – A Guide to DBA

Published

on

doing business

Business owners often use a different name for their business, other than the one that is registered. This is called “doing business as“, or DBA.

It allows you to conduct business under a name that’s more fitting for your business and provides flexibility for a wide range of businesses. A DBA also helps you maintain privacy if you don’t want to operate under your own name.

Read the rest of this guide to discover exactly what a DBA is, why it’s important for businesses, and the many benefits that come with using one.

DBA Defined

DBA (doing business as) lets you conduct business under a name of your choosing. It’s a fictitious or assumed business name that you register so the public knows who the real owner of the business is.

For example, if you have a general partnership or a sole proprietorship, you are required by US law to operate under your personal name.

So, if your name is John Smith, and you own a body shop, you’d have to operate under your real name, and not something like “John Smith Body Shop”, which would be more appropriate.

However, by filing a DBA, you can then operate under the new name while avoiding the legal ramifications of conducting business under an unregistered name.

Why Do Companies Need a DBA?

There are a lot of reasons why a company might want to use a DBA. For example, by allowing you to do business under a name that’s different from your legal one, a DBA helps sole proprietors who would rather not use their real names in order to maintain their privacy.

A “doing business as” name also assists in your branding efforts by allowing you to choose a name that is more suited to your brand.

Also, DBAs help you diversify your business’s offerings across different brand names. You can create subsidiary companies with distinct brand names and operate them all easily under one business roof.

Which Businesses Need a DBA?

Not every business needs a DBA. It all depends on factors such as the legal entity of the business, its locale’s requirements, and, of course, the preference of the business owner.

  • Sole Proprietorships and General Partnerships: If you own this type of business, you have to file a DBA in order for the company to conduct business under a different name than yours or that of your partner.
  • Franchises: Franchise owners don’t need a DBA, but it’s common for them to file one so they can establish their identity as a local business. For example, if you bought a McDonald’s franchise, you may have formed an LLC or corporation, but you can make your DBA “McDonald’s”.
  • Other legal entities: Unlike general partnerships and sole proprietorships, most other legal entities (including S corporations, C corporations, LLCs or limited liability companies, limited partnerships, etc.) technically don’t have to file a DBA name because these types of business have already registered their business names and entities with the state. That is, of course, unless the county, city, or state requires it.

Benefits of Using DBA

Although simple in purpose, a “doing business as” name has multiple benefits. Here are some of the main ones.

1. An Easy Way to Register Your Name

For sole proprietors, filing a DBA provides you with the easiest way to register your name. It’s simple and inexpensive, and you can have a professional business identity in no time – and without having to go through the hassle of forming a corporation or LLC.

2. Operate Multiple Businesses

If you own an LLC or corporation, having a “doing business as” name will allow you to operate multiple businesses without the need to form separate LLCs or corporations for each one.

Say you owned a handyman service, and you also wanted to provide a range of other services such as landscaping, tree removal, etc. You’d create a corporation with a generic name, such as “The Chore Guy” and then use DBAs for each individual business.

So, you might have The Chore Guy Handyman Service, The Chore Guy Landscape Design, The Chore Guy Tree Removal Services, etc.

It’s a best practice to use your DBA name in every contract you create.  If you use a contract tool like Indy, you can make a template to do this quickly and easily.

Ultimately, this will help you cut down on your paperwork and reduce variable expenses that come with starting and operating multiple projects.

3. Keeping Your Business Compliant

LLCs and corporations enjoy certain legal protections. But, these might be invalidated if you are operating under a different name without filing for a DBA.

So, if the business owner in the example above signed a client contract under simply “The Chore Guy” (or some other variation of the business name), that contract probably won’t hold up in court.

4. Maintaining Privacy

A sole proprietorship is the simplest kind of business structure whereby an unincorporated legal entity is owned by one person.

Some business owners are happy to start businesses under their own name, but others prefer to maintain privacy and separate themselves from their business.

So, when they file a DBA under a different name, they don’t have to put their personal name on public record whenever that business is mentioned.

5. Simplifying Banking

Some banks require sole proprietors and partnerships to provide a DBA before opening a bank account for their business. Or if you want to finance your business, you can only proceed once you’ve provided proof of registration for your name.

6. Branding Your Business

A DBA allows you to brand your business with a new and improved name without having to change anything else.

For example, Elon Musk’s business is named after the famous engineer Nikola Tesla although that wasn’t its original name.

So, regardless of the name you started with, you can always choose a creative and distinct company name to move your business forward.

7. Capturing a Different Market

Being able to use a new domain name is a powerful tool in helping you capture new markets.

These days, online sales are a huge part of most businesses, and rather than struggle to make a single website be all things to all people, you can simply file a DBA for the different product/service subsets and then segment your online market accordingly.

For example, if you have a website and you’re using an online course platform to create educational or promotional content for your brand, hosting a podcast to interview subject matter experts in your niche, and producing a YouTube web series you may want to use DBAs for each of these different channels to better target specific audience types that use these sites.

This way, your different websites will target specific customers with relevant content, helping to increase your conversions. Another way to increase conversions is to include relevant content like product demo videos from one of your DBAs in your product/landing pages on your main business site.  If you go this route, consider using an online video editor like Invideo to do so.  This is my preferred platform when creating videos.

8. Expanding Brand Reach with DBA Microsites

You can even create microsites for each of your DBAs that focus and integrate them into your main site with a variety of website builders.

This means you can host DBA online courses on a third-party platform, create a microsite with a blog that offers a brief description of each course and link to it, and embed these links into content on your larger, primary business website.

By diversifying channels with DBAs across a large array of microsites strategically integrated with other DBA microsites, your primary site, and other digital marketing channels, you can expand your brand reach, create effective omnichannel marketing campaigns, better target strategic audiences within a particular niche, and much more.

9. Staking a Claim

By filing a DBA, you are announcing your business name to the world and putting it on public record. Different states have different rules about whether or not another business can still use a name after it’s been registered so it’s worth checking out what the situation is in your state to save yourself problems later on.

10. Scale Your Business

As previously mentioned, A “doing business as” name makes it easy for you to manage multiple businesses from under one roof.

And the best part is, you can have as many assumed names as you want (within reason) under one umbrella entity. This makes it extremely easy if you want to scale your business.

So, for example, if you own an ice cream parlor, and want to open a restaurant, the two likely wouldn’t function effectively under the same name. In such a case, you’d simply file a DBA so you can have two separate businesses each with its own name.

Difference Between a DBA and an LLC

A DBA means that an LLC, general partnership, or sole proprietorship is operating under an assumed or fictitious name.

However, this filing does not register the business as a separate entity, which is what an LLC does. LLCs provide additional legal protections that a DBA doesn’t, such as removing personal assets from your business liabilities.

However, forming an LLC is significantly more costly than registering a “doing business as” name. It also takes a lot longer to form an LLC compared to filing a DBA which can be done in just minutes.

How Do You File a DBA?

To file a DBA name, make sure you work within your country or state requirements to ensure that you go about it the right way.

You’ll need to fill out the paperwork and pay a filing fee. The entire process takes between one and four weeks to get approval, after which you’ll be able to open your business’s doors under a new name.

Don’t forget to check with your state government office whether or not you need an annual renewal for your DBA.

What a DBA Won’t Do

Although a DBA comes with a great many benefits, there are certain things that this type of filing won’t do for your business, such as:

  • Provide Legal Protections: As previously noted, DBAs are quite different from LLCs and they don’t provide additional protections.
  •  Grant Naming Rights: Depending on your state, your business name may or may not be protected by a DBA.
  • Serve As a Legal Entity: Your DBA simply means that your business is operating under a different name of your choosing, it’s not a legal entity.

Conclusion

I hope this article has provided you with all the information you need to know about DBA (doing business as), a public-facing fictitious business name that you can use in place of your legal, registered business name.

You now know what a DBA is, why it’s important, and the different types of businesses that need a DBA, as well as what a DBA won’t do for your business.

If you have any further questions, don’t hesitate to leave a comment below and we’ll provide the answers you need.

BYLINE:

ron stefanski

Ron Stefanski is an online business expert and college professor who has a passion for helping people create and market their online businesses.  You can learn more from him by visiting OneHourProfessor.com

You can also connect with him on YouTube or Linkedin.

 

We are a team of writers passionate about innovation and entrepreneur lifestyle. We are devoted to providing you the best insight into innovation trends and startups.

Advertisement
Click to comment

Leave a Reply

Your email address will not be published.

Newsletter

Top of the month