In some jurisdictions, you can use either your full name or part of your name, plus a description of your product or service, without filing an assumed name. Washington Investigations. The exact rules vary from state to state so check with your local business regulatory authority. You may have some prospective clients that require you to have a DBA before they award you a contract for work. When you file for your DBA, it may take one to four weeks to hear back regarding your name approval.
This varies by jurisdiction, but it's wise to file at least 30 to 60 days before you intend to open the doors of your new business. An assumed name lets you use a name for your business without creating a formal legal entity such as a corporation, partnership or LLC.
You may need the DBA to open a business checking account , and you'll be able to get a business phone listing for your chosen business name. It's the least expensive way to legally do business under a business name for sole proprietors. An assumed name also allows a single legal entity such as a corporation or LLC to operate multiple businesses without creating a new legal entity for each business. There's often significant expense involved in filing and maintaining a corporation, so this helps control costs while still allowing you to expand your business.
You can also use DBAs to segregate your business. If your company wants to get into a new business line that has nothing to do with your existing business and company name, you can create a different, appropriate assumed name for the new business line.
If your company sells the same products, but to different audiences, you can also use different assumed names to keep everything straight.
For example, if you sell women's clothing and teenager's clothing, you can set up two different assumed names to help you target each specific group. Check to see if you can register your assumed name with the Secretary of State or another state agency, but you may find registration handled at the county level in most states. Registering your DBA alone doesn't legally protect your business, but it might be legally required, depending on the state, city or county in which you operate, as well as your business entity.
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.
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, or your business's legal, registered name. 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.
Also keep in mind that, depending on where you live, you'll need to comply with your state DBA requirements. Not all businesses need DBAs. It depends on a combination of the business's legal entity, the locale's requirements and the business owner's preference. If you're a sole proprietorship 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.
Though they do still need to acquire the necessary business licenses and permits. So, the owners and their businesses are one and the same entity, which means they have the same name, too — unless they file a DBA.
While franchise owners don't need a DBA, it is common they file one in order to establish their identity as a local business. Say, for example, you bought a local Burger King franchise. Franchisees tend to form as LLCs or corporations, so you form a franchise under Business LLC, but you make your DBA "Burger King" in order to let your state know that you are "doing business as" the franchise you joined.
Unlike sole proprietorships and general partnerships, these business types have already registered their entities and business names with the state. However, any business formed under one of these entities still has the option to register a DBA name. That would allow them to do business under a name other than the name on their incorporation documents.
The most common case of a corporation or LLC registering a DBA name is when the business wants an alternate name for a specific line of their business. 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.
In some states, you might also have to place a fictitious name ad in a local newspaper for a certain amount of time. Some states allow you to pay online, while others may require a money order or cashier's check.
In addition, some states will allow you to file your paperwork online, and others want notarized documents. If you operate under an assumed name that has not been registered, you can get hit with big fines from your state regulatory agency. In many states, you must renew after a set amount of time.
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. 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.
Note that in some states, you can simply file an amendment under these circumstances. In most cases, it is not necessary to hire a business attorney to help you file.
The process is simple enough that most business owners can handle it on their own. 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. 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. In some states, sole proprietors and general partnerships file DBA forms in one office ie.
The DBA forms may differ as well. The time it takes to process a DBA also varies. You can request a Certificate of Good Standing from the secretary of state. There are several businesses that will prepare and file the necessary forms for you. The same goes for an LLC. You may be asked by your state or county to announce your DBA by putting an ad in a local newspaper so the public can be made aware of your filing. Filing can be carried out online in some states while others want you to mail notarized documents to their offices.
To avoid using your social security number to identify your business, consider applying for an employer identification number. This helps keep your personal and business matters separate. In many states, a DBA registration must be renewed every five years or so. Make a note to file for renewal before it expires so you can continue to legally operate your DBA. If the information in your DBA filing changes e.
Some states require businesses to file an amendment. Others require a whole new registration. Be sure to keep your DBA up to date. If this all seems like a hassle, and you want to go ahead and use a fictitious name without registering, think again. It is illegal to operate a business under a non-registered, assumed name.
Some states impose harsh penalties for failure to register a DBA name, including civil and criminal. Your business name is more than just a name. A DBA can be a powerful part of your business strategy and impact the way you transact business.
Consider the ways that a fictitious name vs a legal name can help you build, branch out, or even simplify the way you operate. You may choose to consult a lawyer or business consultant to help brainstorm the advantages of a DBA. As a small business owner, she understands the triumphs and challenges of life as an entrepreneur.
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