What is DBA? A guide for business owners

What's in a name? For a small business owner, a company name helps to define its products or services. A catchy name can also make a lasting impression on potential customers. When a business operates under a name that's different from their legal name, the letters DBA before its name mean "Doing Business As." If your small business uses an alternate name, registering a DBA can save you time and effort when opening a business bank account, creating official company branding and working with your customers or vendors.

What does DBA mean?

A DBA isn't a separate business entity, but rather a naming tool that helps to define or enhance a company's brand. Sometimes a DBA may also be referred to as a "fictitious name" because it does not match a company's legal name. For example, a local business owner may form an LLC under the name of Sandra's Party Goods, LLC. But they might want to sell their products on the internet using a DBA name of Sandy's Spectacular Party Supplies to set a more casual, fun tone for their business and draw in customers.

Who needs a DBA?

The use of a DBA is one of many strategies employed by small business owners looking to gain traction in the local marketplace. But what is DBA truly going to affect when running a business? Some companies find more of an advantage to using an alternate or fictitious name than others. Aside from marketing and branding, a DBA offers privacy protection.

Sole proprietors with a business registered under their personal name may want to operate under a DBA. For example, freelance consultant Amira Watkins could refer to her business as Revolutionary Business Consulting. LLCs or corporations may also choose to do use a DBA name. Greenleaf Enterprise Partners, LLC, could adopt a name like Greenleaf Consulting to better define its services and brand identity.

Why use a DBA?

Adding or changing a business name can accomplish a variety of objectives. Here are some of the most common reasons to use a DBA:

• Branding: A more enticing name helps businesses stand out and create a more recognizable brand. A DBA can also separate a specific brand from a company's legal name.
• Expansion: DBAs allow businesses to operate under multiple names without the need to form new legal entities. Separate DBAs also help track individual product performance and multiple revenue streams.
• Privacy: Sole proprietorships or general partnerships may decide on a DBA to avoid using the owners' personal names in public-facing documents and branding.
• Professional appearance: The use of a DBA can help a business appear more established or specialized (e.g., "Lookout Joe's Cafe" instead of "Joe Garcia Restaurant Partners, LLC").

How to register a DBA

If you choose to use a DBA, completing a formal registration process will link the alternate name to your legal business entity. The business registration process varies by state, but adding a DBA typically involves submitting a form online or filing with a local county clerk or state business office.

DBA registration steps

1. Choose a name to use for your business.
2. Confirm availability by checking your state's business name registration database to determine if any other registered companies are using the name you chose. If your state has business naming requirements, make sure your DBA is compliant.
3. Run an internet search using the DBA. This will identify other companies with your DBA, or a similar name, and where they're located. It's also good idea to run a domain name search to give you an idea of what's available for a company website.
4. Fill out and file DBA registration forms with your local or state government. You may be required to pay filing fees that generally run from $10 to $100. Some states also require a public notice of your DBA name. There may be an additional fee for publishing this information.
5. Once approved, you'll receive a DBA certificate from the state or local authority. Keep this registration information on file.

Typically, the registration process takes a few days to a few weeks, depending on your location. You'll want to take note of any re-registration or updates required as you continue to operate under your new DBA.

When is a DBA required?

DBA registration is essential to carry out some of the most important functions of your business. Banks often require proof of a DBA registration to open a bank account under your business name. When entering into a legal agreement, you may also need a registered DBA. Vendors and clients may require contracts or invoices to reflect the operating name of the business.

You'll also want to ensure that your business complies with the applicable consumer protection regulations. Some states require DBAs to ensure transparency of ownership and protect consumers. Fines or legal issues can arise if you operate under an unregistered name in locations where a DBA is required.

DBA vs. LLC vs. trademark

Before you begin to use a DBA, you should understand its benefits and limitations. A DBA formally recognizes an alternative name for your business, but it does not give you the same protections as a Limited Liability Company (LLC) structure or a trademark.

Registering a DBA is not the same as registering a new legal business structure, like an LLC. A DBA is not a separate organization, but a registered name that differs from the legal name of the business. An LLC gives the owners liability protection, but a registered DBA does not provide this same protection. However, a business can choose to structure itself as an LLC to gain liability protection, while also filing a DBA to operate under a different name.

Another important point to remember is that a DBA is not the same as a trademark. Filing a DBA informs the public that a company operates under an alternative name, but this doesn't give a business exclusive rights to the registered name. Only a trademark can provide legal protection for a brand name or logo.

How a DBA affects business banking

Opening a business bank account is one of the primary steps you'll take when starting a new business. To avoid confusion, you may prefer to open a business bank account using your DBA name. This allows you to deposit checks and other payments addressed to the name your customers and vendors recognize. When opening an account, most banks will require a copy of your DBA registration for verification purposes.

Once you've secured your DBA and received your approved registration, you can learn more about the different business account options at the Citizens Small Business Banking Center online.

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