Doing Business as DBA in USA
Some people change their names for professional or personal reasons. A middle name, an abbreviated name, or a nickname might feel more fitting and natural. There is nothing wrong with having a name that is known to everyone and a name that belongs on the birth certificate and passport. The commercial version of this is called Doing Business As or DBA.
A company uses a “Doing Business As” or “DBA” in the USA when the name of the company under which it operates is different from the registered legal name. Filing for Doing Business as DBA can be done by a person or a company either online or offline as per the rules prescribed under various states in the USA.
What is a DBA in the USA?
Every business has a true or legal name. In the case of a Partnership or Sole Proprietorship, that legal name is the name of the owner or owners of the business. In the case of Limited Liability Company (LLC) or Corporation, or other statutory entities, the legal name is the one that is present in the incorporation document of these entities (e.g., the Articles of Incorporation or Articles of Organization).
In case any person or company does business under some other name that is known as the DBA name of that person or company. DBAs are also referred to as the assumed name, trade name, or fictitious business name of a Corporation or LLC. There are no limits prescribed for the total number of DBAs or assumed names a person can use for doing business.
In most states, the rules are that unless a Doing Business as DBA in the USA is registered, a person can only do business under his/her own name. On the other hand, the corporations and LLCs can only do business under the name as prescribed on the incorporation document unless the registration of Doing Business as DBA in USA is done. The registration of Doing Business as DBA in the USA is done by making the requisite filing in the state with the requisite documents.
The purpose of Doing Business as DBA in USA is to notify the public that a particular person or business entity is conducting its business under a name other than its known legal name. The Assumed name or DBA laws are consumer protection laws. The registration for Doing Business as DBA in USA is required so that the common public knows about the actual owner of the businesses they are buying from or dealing with.
What essential information is to be provided for Doing Business as DBA in USA?
The essential information to be provided for Doing Business as DBA in USA is as follows:
- Name of the Corporation or LLC;
- Address of the Corporation or LLC;
- Date of formation of the Corporation or LLC;
- The DBA or fictitious name for the Corporation or LLC;
- Nature of the business;
- Names of Members or Directors or Officers;
- Addresses of Members or Directors or Officers;
- The contact phone number of the Corporation or LLC; and
- Name of authorized person in the Corporation or LLC signing the title and notarization.
What is the procedure of registration of Doing Business as DBA in USA?
The procedure for filing registration for Doing Business as DBA in USA varies from state to state.
The procedural requirements of some states are as follows:
- In many states, the applicant for the Registration as DBS has to go to the county clerk offices and then pay the required registration fee to the county clerk.
- In some other states, the applicant for the Registration as DBS also has to place an advertisement of a fictitious name in a local newspaper for a certain amount of time period.
There is no specific procedure for the registration of Doing Business as DBA in USA due to difference in the state laws. So, the person applying for registration has to do proper research of a particular state before applying for the same. The cost of filing for Registration as DBA in USA ranges from $10 to $100. After the payment of the prescribed fees, the applicant will be provided with a DBA certificate.
The local bank of the applicant can also require a fictitious name certificate to open a business account for him/her. In most states, Corporations are not required to file any fictitious business names unless the corporations do any kind of business under names other than their own.
In some states, filings for Registration as DBA are made in different offices for sole proprietors and general partnerships than they are for LLCs, corporations, and other statutory entities. The forms for registration of Doing Business as DBA in USA may be different for different states.
Upon the successful completion of filing and receiving a fictitious name certificate, you may begin using your DBA name. You can contact Enterslice for any further information, and our professionals will guide you with procedural formalities.
What are the key points of consideration for Doing Business as DBA in USA?
The key point of consideration for Doing Business as DBA in USA is as follows:
- DBA filings for an LLC or Corporation require proof that the LLC or corporation is in good standing. This is generally in the form of a good standing certificate that the applicant can request from the secretary of state.
- The applicant cannot make the DBA a corporate name such as Smith JonesCorp., or Inc. if the existing business of the applicant is not a corporation. Similarly, the applicant cannot use a name that indicates the applicant’s business is owned by an LLC if it is not.
- In some county or state, the filing requirements mandate that the applicant should announce it with any local newspaper or a publication to provide public notice of the filing registration for Doing Business as DBA in USA.
- The applicant is required to find all the accepted forms of payment and filing methods of Registration as DBA. Some states or counties in the USA let the applicant pay the filing fee through a debit or credit card. On the other hand, some other states require a cashier check or money order.
- Some agencies in the USA allow online filing of the Registration as DBA, some required notarized documents mailed in with the form.
- The applicant is required to identify the business with either the Social Security Number or an EIN (Employer Identification Number).
- It is against the law of the state to conduct any business using a fictitious or assumed name that is not registered with the authorities. The different states in the USA impose penalties that can be harsh for the people not following the rules. These can include both the criminal and civil penalties.
- In many states in the USA, the fictitious or assumed name registration lasts only for a limited time and is required to be renewed from time to time, or it will expire. The common term of Registration as DBA is five years.
- Most states in the USA require new filings if there is a change in the information provided in the original fictitious name filing, such as the business address, or the legal name, or a change in officers (for corporations), or members (for LLCs) or partners (for general partnerships). In some states, an amendment is required to be filed. In other states, a whole new registration for the same is required.
What are the benefits of Doing Business as DBA in USA?
The benefits of Doing Business as DBA in USA are as follows:
Easiest Way to Register Name
If the applicant is a sole proprietor, filing for Registration for Doing business as DBA in USA is the simplest and least expensive way to use the name of the business. The applicant is required to create a separate professional business identity without having to form a Corporation or an LLC.
Operate Multiple Businesses
A DBA in the USA will let the applicant operate more than one business without having to form any separate Corporation or LLC for each one.
Keep Business Compliant
If the business is a Corporation or an LLC, the applicant can enjoy certain legal protections. However, these protections may be invalidated if the applicant is operating under a different name and does not file for registration for Doing business as DBA in USA.
Operate a Business under Different Name
Many Sole Proprietors mostly prefer the simplicity of starting a new business under their personal name. But some others want some sort of privacy and separation between themselves and their business. Filing for Doing business as DBA in USA under a different name means that the applicant is not required to have to get his/her personal name on the public record whenever his/her business is mentioned.
Distinctive Company Name
A sole proprietor or a partner of a business can also want the name of his/her business to be more distinctive, or to identify the kind of business specifically. If in case the applicant is Smith Johns and he has a business of gardening, and the name of the business is Smith Johns. However, the applicant wants to do his/her business as Smith’s Flowers and Gardens which is a distinctive name for the company.
Open Business Account
Many banks in the USA require sole proprietors and partnerships to have a registered DBA before opening a business bank account in the state. Many banks ask to provide the DBA filing or assumed name certificate as a proof of registration for the name of the company with the authorities in the USA.
Claim on Business Name
When any person files for Doing business as DBA in USA, he/she also announces the fictitious name to the world by putting the name on the public record. In some states in the USA, filing of DBA does not prevent other businesses from registering the same name. However, it is always worth checking if such is a case in the state in which the applicant is registering a DBA.