What is a DBA and How to File One For Your Business

Registering a DBA does not excuse you from forming a legal business entity. In fact, if you don't form a legal business entity and simply register a DBA with your state, the law assumes you're operating your business as a sole proprietorship.

While many business operate this way, there are significant disadvantages to operating as a sole proprietorship. For example, you will not have any limited liability protection from lawsuits when you operate your business as a sole proprietorship. And you'll be directly responsible for your business's debts and obligations.

An LLC, limited partnership (LP), limited liability partnership (LLP), or corporation grants the owner or owners important limited liability protections and insulates owners from the debts and liabilities of the business.

You don't want to use your personal name for the business.

If you form your company as a sole proprietorship or partnership, your personal name is the legal business name. So, for privacy or strategic reasons, you may want to operate the business under a different name.

Your bank requires a DBA.

Banks often require sole proprietors and partnerships to have a DBA to open a business bank account.

You're taking your business in a new direction.

Your business is changing direction or offering new services and the old name does not match the new reality of your business.

You want to improve credibility.

Sole proprietorships and partnerships can look more authoritative operating under a name other than the owner's personal name.

It's better for marketing.

The legal name of a business might be complicated or hard to pronounce. A DBA will allow you to market a memorable, accessible brand name that's more search engine friendly.

To do business under a DBA, you must complete and file required DBA forms and pay a filing fee in the state(s) where you want to operate your business.

Each state has its own forms and requirements, so be sure to check the forms and requirements carefully for your state. Here are important things you should consider when filing a DBA:

• Your legal business entity must be in good standing (you can get a certificate from your state or registration showing this).


• You may need to get a money order or cashier's check to register a DBA. Not all states accept credit cards.


• Your DBA cannot claim you have a corporation or LLC unless you actual business entity is a corporation or LLC.


• Many states require that you notify people that you've registered a DBA by posting a notice with a local newspaper or publication.


• Although you can identify your business in your registration documents under your Social Security Number, you should get an EIN (Employer Identification Number, also known as a Federal Tax ID Number) instead and use the EIN instead of your Social Security Number.


• You may not operate under an assumed name unless you've registered that name as a DBA name in the state in which you're operating.


• DBA registrations don't last forever. In many states, they are for five years and must be renewed before they expire. Check the specific state requirements carefully.


• Most states require that you amend your DBA filing if your legal business information changes. This includes your business address, legal name, change in officers, etc.