BASIC INFORMATION

ADVANTAGES AND DISADVANTAGES OF DBAs

STARTING YOUR DBA

TAXES AND OTHER LEGAL CONSIDERATIONS

BASIC INFORMATION

 

What is a DBA?

A DBA, “Doing Business As”, or Fictitious Business Name name is a business name that is different from your personal name, the names of your partners or the officially registered name of your LLC or Corporation.

It’s important to note that when you form a business, the legal name of the business defaults to the name of the person or entity that owns the business, unless you choose to rename it and register it as a DBA name.

For example, Bob Jones sets up an auto care business. Rather than operate under his own name, Bob instead chooses to name his business: “Jones Automotive”. This name is considered an assumed name and Bob will need to register it with the appropriate local government agency.

ADVANTAGES AND DISADVANTAGES OF DBAs

 

What are the Advantages of a DBA?

A DBA allows the holder of the same to:

• Begin Operations as for as Low of Cost as Possible without the Formalities or Corporations or LLCs;
• Open bank accounts, write checks, and enter other contracts all under the DBA;
• Allows Sole Proprietorships to use a more formal and real business name.

Of note, once profitable it is generally advisable to convert the DBA to an LLC or Corporation which offer protection against personal liability.

What are the Disadvantages of a DBA?

A DBA is nothing more than an assumed name for your business. Thus, unlike an LLC or a Corporation it does not shield you from personal liability should the business fail. You will be liable for all of the debt of the business.

STARTING YOUR DBA

 

How Do I Start or File for a DBA?

To file for a DBA, most states simply require that you file a register the DBA or Fictitious Business Name by filing the appropriate form.

If you would like to register a DBA for your Sole Proprietorship with your state choose from one of TTC Business Solutions’ Sole Proprietorship (DBA) Filing Services to register your business’s fictitious name.

What Requirements Are there to File for a DBA?

In most states, you must file a DBA statement before using your DBA in the operation of your business. Some states require that the DBA must be filed for within 30-40 days of your first business transaction. Some states also require that you publish your DBA statement in a local newspaper, and then file proof of publication with the proper government office.

Should I Run a Name Availability and Trademark Search before Naming the Business?

Yes. Prior to adopting and using a Fictitious Business Name or DBA you should always check to make sure that the name is available with your state’s Secretary of State. You should also run a state and federal trademark search to clear use of the same as well as well as any advertising slogans, product or service names you intend to use.

TTC Business Solutions offers a Free Business Name Availability Check as well as trademark Research Report Services to determine if your Sole Proprietorship’s DBA is available.

TAXES AND OTHER LEGAL CONSIDERATIONS

For tax advice on the taxes to your DBA you may wish to consult with a licensed tax attorney or other tax professional.

Who Can File for a DBA?

All types of businesses can use a DBA, not just sole proprietorships. LLCs, corporations, and partnerships can all file to get a DBA.

When am I Required to File for a DBA?

A business that operates under any name other than its owner’s personal name or the entity name that was filed for with the state is legally required to file a DBA.

What Cannot be Included in the Name of My DBA?

In general, the name of a DBA may not include other entity designations that would suggest it is an entity form which it is not (e.g., Jones Automotive, LLC or Jones Automotive LLP).