There are instances when you own a business that it can be beneficial to create a new name to conduct your business under. This is known as a “Doing Business As” or DBA name.
Business owners are most likely to file a DBA when they start a business, or more specifically when they start a sole proprietorship or a partnership. Those who do not specifically file for a DBA will have a business name and personal name that match. Let’s clarify this. If you’re opening a pet store and don’t want it to be called “Sarah Smith’s Pet Store,” you would need to file a DBA. For any store name where you wish only part of your name to be attached, it is a good idea to research your specific state laws to see if a DBA is required or suggested.
DBA required
DBAs can be required to perform certain business activities, such as starting a bank account. Banks often require businesses operating as a sole proprietorship and those engaging in a general partnership to have a DBA before their account can be opened. If you’ve filed for a DBA and are going to open a business bank account, be ready to provide a copy of your DBA as proof.
A business’ client(s) can also require a DBA. This is especially true of freelancers. Although, in the case of a freelancer, the company you’re working with is more likely to require you to incorporate into an LLC—i.e. making your business legally recognized by your state. Luckily, this is a simple process in most states.
Another situation that a DBA could be required is if you want to expand your business into an area that is not well represented by your current name. Having a DBA may make it easier to help your business expand. For example, if you own a company that has long produced books and want to expand to include selling e-books, you may find that selling your e-books under a separate name (with a separate website) can help to serve your target audience better.
Helpful reminders
- Before making your DBA [your name here], Inc. or Corp. you actually need to be a corporation.
- Check your state’s laws. Some states require you to file for a DBA within 30-90 days of opening your business. Some also require this information to be made public.
- It’s illegal to conduct business under a name that hasn’t been filed.
- Plan ahead! It can take between a week and a month for a DBA to be filed.
Continue reading here for tips on how to pick the perfect name for your business.
For more information and tips on how to incorporate your business, visit MaxFilings or contact us and we can help you. There is also additional information on our Knowledge Center.