What is a DBA? Guide for small business owners

What is a DBA?

A DBA allows your business to operate under a name other than your legal registered name. If you are “doing business as” under a different name than the one on file with your respective state, you need to have a DBA.

If you plan to run a new business under a name different than the one you declared on legal forms, you’ll need to submit a DBA filing with your respective secretary of state’s office. Doing so makes your assumed business’s name a matter of public record.

DBA vs. LLC

A DBA may look similar to an LLC when looking at a broad overview. However, once you break through the surface, you will uncover that there are some major differences to be aware of.

A DBA:

• Allows you to do business under a different name
• Helps you to build a recognizable brand under a different name, apart from your name or the main business name you may already have
• Does not allow for separation between the business and business owner—you, as the owner, are responsible for all business expenses as if they were your personal finances

An LLC:

• Allows you to do business under a different name
• Offers special tax advantages like write-offs and avoiding double taxation
• Gives the business owner protection from liability, meaning your personal property is not at risk if the business were to perform poorly

DBA name examples

Choosing a DBA name may prove to be a bit more tricky than you might expect, considering you have to choose a business name that’s unique and can’t copy an existing name. A DBA name should:

• Be recognizable
• Be easy to understand and remember
• Instill trust in customers

Some examples include:

Benefits of a DBA

Ever wonder how to earn credibility and build an empire of multiple businesses? A DBA may be your answer. Here are some of the benefits of having one.

Allows you to operate under a different name 

Having a recognizable brand is an advantage because it provides an image of high value and instills trust with your customer base. Many times, achieving this recognizable brand comes with a name or logo that is separate from your personal given name. Again, this has many benefits of its own, including:

• Enables you to build a brand apart from your name
• Gives your business a name that’s memorable and has trusted backing
• Allows you to run multiple entities under the same umbrella

Lets you run multiple businesses or websites

There is much to be said about having multiple businesses and websites. If you’re planning to expand your brand in another direction or are seeking an additional business to add to your portfolio, a DBA would be advantageous. You may also want to consider filing a DBA if you:

• Intend to expand your product or service
• Want to sell items under a different name 
• Conduct business or sell goods on multiple websites

May boost your credibility

Securing a different name could give you more credibility than your own name. For instance, imagine your business is a sole proprietorship, which operates under your personal name. A DBA would make the operable name of your business more appropriate. A more formal name may also:

• Make you appear more credible to both consumers and investors
• Make it easier for people to find you on Google and other search engines
• Provide your business with brand recognition you can use for marketing purposes

Maintains the corporate veil

A DBA alone does not necessarily provide legal protections, but it does help maintain the corporate veil. This means it helps create the illusion of multiple entities, even if there’s only one and it operates under multiple names.

Drawbacks of a DBA

Although DBAs can be useful for small business owners, they’re not without their risks. Business owners should also consider the drawbacks of a DBA before proceeding.

No legal right to a name

A DBA allows you to use a name. In some ways, fictitious name filings do nothing more than enable you to tell your respective state you’re doing business under that specific name. However, a DBA does not provide you with the permanent right to the name.

Finances are not separate

Certain business entities, like limited liability companies and corporations, provide liability protection to owners. If someone were to sue the business, they could not go after the owner’s personal assets. To summarize:

• A DBA does not protect your personal assets.
• A DBA does not separate your personal finances from your business.
• A DBA alone still leaves you liable for expenses the business incurs.

Lack of legal protection

DBAs help maintain legal protections, but they don’t provide them explicitly. For example:

• A DBA alone does not offer the same corporate shield you’d obtain if you registered your business entity with the state. 
• DBAs leave you open to the many risks and liabilities associated with running a company.

If you’re looking for these protections, do not depend on a DBA alone.

Administrative hassle

Registering a DBA can cause administrative hassle. Not only must you register at the state level, but you may also have to submit forms at the county level. You must do this in every area in which you operate.

There’s also a chance someone has already filed the same DBA in that respective area. If that’s the case, you have to use a different name or cease to exist in that area.

Do I need a DBA?

Needing a DBA depends on your business structure. If you want to operate under one name and still remain protected and experience the tax benefits, it’s likely safer to go with a structured entity like a sole proprietorship or LLC. Let’s explore how different business structures relate to a DBA so you can make an informed decision before deciding on one or the other. 

Sole proprietorships and general partnerships 

If you are the owner of one of these entities, then your business name is your personal name, unless you file a DBA. These organizations do not file entity formation papers, so they don’t have a registered business name on file with the state until they file a DBA.

Registering a DBA could be helpful so that you’d be able to open a business bank account and market yourself more favorably.

LLCs and corporations

LLCs and corporations have already filed with their respective states. You should already have an EIN (Employer Identification Number) and a business bank account, so you don’t need to file a DBA unless you plan to conduct business under a different name for separate lines of business.

How to get a DBA

Getting a DBA is a lot like filing for an LLC or a sole proprietorship. The process looks like this:

1. The first step in registering your DBA is choosing a business name: While there aren’t many specific restrictions on trade names, most states prohibit businesses from choosing a name that too closely resembles that of an existing company.

Pro Tip: You should avoid names that may confuse customers about your product and service offerings. Your local county or state may provide a service to help you see if a name is available or already in use.

2. Visit your county clerk’s office for a DBA form or print one online: The Small Business Administration offers specific instructions for business owners in different U.S. states and counties.

3. File the paperwork: Fill out the proper form for your fictitious business name request and submit it to your municipal or state government along with your filing fee per the instructions. Additionally, some states require filers to publish a notice in their local newspapers alerting customers to the change of business name.

If you already operate in multiple areas, you may not have time to file forms everywhere.