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Everything about Doing Business As (DBA)

The term "doing business as" refers to conducting business under a different name. Any registered name that an organization uses that isn't its formal business name is a DBA. A DBA is also known as a fictitious name, assumed name, or trade name.


Unlike an LLC or corporation, A DBA is not a commercial formation and does not provide individual financial protection.

Why Would You Require a DBA?


A DBA must be registered if a business works under a name other than its legal name. Due to the security and consumer benefits offered to individuals who obtain a DBA, specific organizations often need to function at a federal level.


When a firm's operating name differs from its official, registered name by even a specific character, it's considered "doing business as." 


In the corporate world, business owners who are launching a sole proprietorship or partnerships choose to pick a business name or DBA. 


These DBAs, also known as fictitious names, are required in any circumstance in which a business intends to function under a name different from its official one. 


Any organization or entity that engages in this conduct must register with their local, state, or federal authorities.


No DBAs or fictitious business names may contain the terms "corporation," "incorporation (or incorporated, or corp)," or "Inc." to eliminate ambiguities and misunderstanding. Businesses that are authorized with the Secretary of State are the only exceptions; however, they are rare.

How to Register a DBA?


The process for registering a DBA or false name differs across provinces. However, in most cases, all that is required is a visit to the county clerk's office and payment of a nominal processing fee.


However, in certain areas, corporations must additionally publicize their DBA or fictitious name in one or more state or local publications. In addition, some jurisdictions mandate that these commercials run for a specific period, usually a month or two.


Based on the circumstances, submitting a DBA or fictitious name notification might cost as little as $10 or as much as $100. Newspapers and state legislators aren't the only entities that would have to work with a freshly established business. 


For example, these fictitious name certifications may be required to create a business account with a bank. If this is the case, the bank will be upfront about it, and with enough investigation, any DBA must be able to locate a bank that suits their demands.


Corporations are seldom required to submit fictitious company certificates with the state unless they conduct business under names different from their authorized ones. 


As a result, the incorporation paperwork has the same effect on corporations and citizens as fictitious name filings have on sole proprietorships and partnerships.


DBAs also pertain to a corporation's assigned trade name and may be used in various scenarios, including when a corporation does business internationally. 


DBAs are the only legitimate method for an organization to do business under a name other than its own, and corporations and people generally file them for this purpose.


Unlike a single proprietorship, a DBA is separate and distinct from the name of the business owners and any associates or stakeholders.


Businesses must be aware of scenarios in which a DBA is acceptable or legally necessary for certain transactions. Therefore, if a circumstance occurs where a DBA would be most beneficial for the business, they must apply for one.


When a corporation is established, the legal name is immediately changed to the names of the people or organization that founded, operates, or owns the business. 


Apart from circumstances when the company is rebranded, registered, or filed as a DBA, this is true.


In most states, both residents and businesses may easily file a DBA. Some states have more criteria that must be met than others, while some submissions just demand county-level approval. Once the procedure is completed and a DBA has been issued, a company can legally function under its fictitious name.

Benefits of DBA


A DBA is beneficial for various reasons, including brand recognition and liability protection. Name recognition is vital for today's firms to focus on flourishing; therefore, business naming (and renaming) must be treated extremely seriously, and corporate name decisions should only be decided at the topmost executive levels.


The various benefits of a DBA are mentioned below:


    • Low Cost

      A DBA may set up your corporation's identity for you at a low cost. It is the official title of the business once the fictitious name has been registered with the county clerk or other appropriate approving agency.


    • Versatility 


If you already have a corporation set up, such as an LLC, you may employ fictitious names to avoid setting up new ones by simply filing the fictitious name for every business venture. 


The initial organization then acts as the foundation for the growth of your regional operations.


    • Confidentiality 


A DBA registration is especially beneficial for individual owners and partnerships that do not want their independent identity on community papers, as it helps to preserve private information.


    • Adaptability


Because state law mandates that corporations operate under a different name inside state borders to avoid confusion, your corporation may not be accessible in places where you want to grow. 


This difficulty is solved by registering a fictitious name, which allows growth into regions where the company's legal name is already being used.


    • Value


Using a fictitious name allows your company to increase brand recognition by providing a means to advertise underneath a distinctive DBA and to deal with retail outlets without sacrificing your corporation's name rights.


    • Adherence


Registering a DBA allows you to legally employ a business name without forming a company or LLC.


    • Banking


A DBA makes opening a new bank account in your company's name much more effortless.


    • Affordability and Ease


DBAs are economical and straightforward to file, giving your setup or developing business more freedom. 

Drawbacks of DBA


DBA also has numerous disadvantages that businesses must consider. The various drawbacks of DBA are:


  • Geographical Restrictions


Each new state, nation, or location where you intend to do business will need you to file a fresh DBA.


  • Protecting Your Name


While a DBA enables your company to employ a well-known name, it does not provide the same level of protection for your assets as copyright or trademark. 

In contrast to an LLC or corporation, a DBA does not distinguish between personal and business support. Multiple DBAs on the same account might create suspicions of fraud.


  • Maintenance Hassles

Filing a DBA presents complications in maintaining the registrations that must be revised every few years.


If you need help with a DBA, you can visit IncDecentral.com for assistance and guidance based on the requirement of your business. 


Notice: The details provided within it do not constitute legal advice. The knowledge of this article is for general reference purposes only. Your access to or reliance upon this piece of information does not create any relationship involving an attorney or client. You should always head out and consult an attorney for specific legal advice regarding your situation.