A DBA, or “doing business as”, comes into play if, for example, your LLC’s legal name is “The John Doe LLC” but you want customers to know you as “Superlative Salon” or, well, anything besides “The John Doe LLC.”
It also comes into play if you haven’t formed an LLC or corporation and are operating as a sole proprietor, but want to use something besides your own name for your business. For example: Your name is Pat Sanders, but you want to do business as “Perfect Pavers".
CT observation: Consider incorporating or forming an LLC instead of remaining a sole proprietorship or partnership and filing a DBA and doing business under an assumed name. There can be advantages, like limited personal liability, and maybe lower taxes. You can discuss this with your legal and tax advisers.
In essence, a DBA is the business version of “a/k/a” (also known as). For example, International Business Machines Corporation is known as IBM.
Are DBAs the same as business licenses?
A DBA lets you or your company do business under a particular name. A business license lets you or your company engage in a certain type of business activity. If you properly do your DBA filing, you may still need a business license.
For more information, refer to these articles:
Are DBA filings mandatory?
Many states require a DBA filing if you do business using a name other than the name on the formation documents of a corporation or LLC (or a name other than the owner’s for sole proprietors and partnerships).
CT observation: You may need to file a DBA even if it’s not required by state law. For example, your bank may require a DBA to open a business checking account. Or, a prospective client may require a DBA in order to award your business a contract.
Some states also require publication of the DBA name in a newspaper. A state might require that a DBA filing be renewed periodically, or it might not expire until you cancel it.
Why use a DBA name?
A business might choose to do business under an assumed name for a variety of reasons:
- Transact business under the company’s domain name
- Achieve marketing, branding, expansion, or other goals
- Use a newer name that’s easier to remember or pronounce
- Accentuate different divisions or products
- Avoid negative publicity or be known by different names in different parts of the country
- Maintain flexibility as trends and customer preferences change
Is DBA the same as an assumed name?
The various states have different names for a DBA filing. Some states call it an assumed name, while others call it DBA (doing business as), fictitious name, trade name, or another term.
Also, “doing business” is a term that each state often defines differently.
CT observation: You may want to do business under more than one assumed name. If so, states generally require a separate document be filed for each.
Be careful! DBA filings may not “protect” your name
Assumed names, or DBA names, are not “exclusive” in many states. This means that two or more businesses can voluntarily file a DBA as “Perfect Pavers.”
CT observation: If you want to legally protect your name, you may be able to take advantage of tradename and trademark laws.
DBAs are public records
States primarily require DBA filings to protect members of the public who deal with businesses using names other than the official business name. These publicly available filings may be used to check credit ratings, search for security interests, etc.
CT observation: By filing a DBA, you’re essentially telling the state and the public, “I formed my LLC as The John Smith LLC, but the public and my customers know us as Superlative Salon.”
Also, the number of DBAs you could file generally isn’t restricted—the sky’s the limit!