DO I NEED A DBA?
A DBA isn’t required to form or run a business. A DBA is an assumed or fictitious business name that is sometimes used by sole proprietors, partnerships, LLCs, and corporations for branding purposes.
There are mainly only two reasons why you would need a DBA:
- You have a registered formal business entity looking to branch out into new products, services or brands, or to rebrand in general.
- You have an unregistered business such as a sole proprietorship or partnership and would like to operate under a name other than your personal name. This option should only be used by businesses with very low profit and risk.
A DBA, also known as a trade name, fictitious name, or assumed name, allows you to conduct business under a name other than your legal business name.
Common DBA Misunderstanding
First-time entrepreneurs often confuse DBAs with a type of business structure. They assume that when they register a DBA, they are creating a formal business structure with liability protection but this is not the case.
When an entrepreneur starts a business and only registers a DBA name, they are actually just creating a sole proprietorship with a DBA name.
The DBA name helps with banking and branding the business, but the business owner’s personal assets are still completely exposed to lawsuits and creditors.
A sole proprietorship with a DBA name is still just a sole proprietorship—your personal assets are not protected by registering a DBA name.
If you have a sole proprietorship, it is easy to convert to an LLC.
Visit our DBA vs LLC guide if you need more information about choosing between a sole proprietorship with a DBA and an LLC.
WHAT ARE THE ADVANTAGES OF A DBA?
The benefits of using a DBA can vary depending on the type of business structure you have.
DBA Benefits for Sole Proprietorships and Partnerships
Registering a DBA name for a sole proprietorship or partnership offers the same benefits as forming an LLC except for the most important benefit—personal liability protection.
Forming an LLC or corporation is the best choice for a business owner that expects to earn a profit or carry any risk. LLCs and corporations protect your personal assets in the event that your business is sued or suffers a major loss.
There are three main benefits to using a DBA name for a sole proprietorship:
Access to Business Banking
Without a DBA, a sole proprietor or partnership must operate under their personal name(s). A sole proprietor's personal name is their business name by default.
With a DBA, "John Smith" can market himself under an assumed name like "Advanced Photography".
When you file a DBA name, the general public doesn't see your surname, only your fictitious business name.
You can accept payments in the business's name rather than your surname. This can increase trust and credibility.
DBA Benefits for LLCs and Corporations
Formal business structures like LLCs and corporations don't need to file a DBA name to use a brand name, bank in the LLC name, or to create privacy. Those things are a standard part of those business structures.
The most important benefit is that DBAs allow formal business structures to create multiple brands (business names) or lines of business under one LLC or corporation. They can also be used to rebrand an LLC or corporation rather than change the main legal business name.
LLC DBA Example:
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".
HOW DO I GET A DBA?
The process for registering a DBA name varies from state to state. In many states, you will file DBA forms 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.
Remember, a DBA does not offer personal asset protection for your small business. To get personal asset protection most entrepreneurs choose to structure their new business as an LLC.
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 in the short term, but an LLC offers VERY important advantages such as personal liability protection. You can learn more about this topic in our DBA vs LLC guide.
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.