DO I NEED A DBA?
A DBA is by no means required in order to form or run a business. For the most part, a DBA is only necessary if you're:
- An unregistered business hoping to operate under a name other than your own legal name.
- A registered business entity looking to rebrand to reach a new market or describe a new product/service.
Most businesses simply conduct business under the name they register at the time of formation.
A DBA is any name a business operates under that isn't its legal name. Most states allow businesses to register a DBA name.
WHAT ARE THE ADVANTAGES OF A DBA?
The benefits of using a DBA can vary depending on the type of business structure you have. We will explain the benefits of using a DBA by looking at these two categories:
- Sole proprietorships and partnerships
- Limited liability companies and corporations
Sole Proprietorship and Partnership DBA Benefits
Adopting a DBA is especially useful for sole proprietorships. Without a DBA, a sole proprietor must operate under their personal legal name.
With a DBA, "John Doe" could operate and accept payment under the name "Best Cut Carpentry." Without registering a DBA, John would only be able to accept checks made out to "John Doe."
In order to accept payments under a DBA, you must first set up a business bank account using your confirmed DBA.
LLC and Corporation DBA Benefits
Although DBAs are most popular among sole proprietorships, they're also great for established LLCs and partnerships looking to get into a new line of business.
If "Babe's Hardware, LLC" wanted to expand into furniture sales and restoration, the owner(s) might file for the trade name, "Babe's Furniture." This would allow them to promote the business as a furniture store and accept payments under the name "Babe's Furniture."
Keep in mind that you'll still need to use the entity's legal name on all government documents.
HOW DO I GET A DBA?
The process for registering a DBA name varies from state to state. In most states, you will file with the secretary of state or the county clerk for a cost of $10 to $100. You may also need to publish notice of the DBA in a local newspaper.
What does a DBA allow you to do?
A DBA (doing business as) allows a business to operate under a name different from its legal name.
What is the benefit of a DBA?
A DBA allows sole proprietorships to operate under a name different from the owner’s legal name, which can make the company appear more professional. DBAs can also be useful when a company wants to introduce a new product or line of business under a different name but doesn’t want to create a new legal entity.
How do I get a DBA?
The DBA filing process differs state to state. In some states, companies file for DBAs at the state level, while in other states, companies must file for DBAs with the cities or counties they operate in. To learn how to form a DBA in your state, check out these state-specific guides.
Does a DBA have to file taxes?
A DBA is not a separate legal entity, so it does not have to file separate taxes. All business conducted under a DBA is part of the legal entity for tax purposes.
Do you need a separate bank account for a DBA?
No, it is not necessary to have a separate bank account for a DBA. However, if your DBA is for a sole proprietorship, it is a good idea to have a separate business bank account.
How much does it cost to start a DBA?
The price varies state by state, but the cost of a DBA is typically between $10-$100.
What is better, a DBA or LLC?
The right choice between getting a DBA for your sole proprietorship/partnership or forming an LLC depends on your business’s unique situation and needs. Operating a sole proprietorship under a DBA name is a simpler, more economical option, but an LLC offers important advantages such as personal liability protection.
What is an example of a DBA?
An example of a DBA would be a sole proprietorship carpentry business owned by John Doe doing business under the name Best Cut Carpentry.
How do you write a DBA name?
You should write your DBA name exactly how it is registered.