DBA or “doing business as” is a term used to set up a fictitious name for a business so that it can use this new name instead of the legal one for any kind of formal process, bank transactions, submitting of taxes, and so on. It is vital to know how to file a DBA in case you may need one.
For getting the DBA, one will need to go through the process of fictitious name registration. Several businesses have already signed up for this named entity, and hence, it’s time for your business to do the same.
On this page, you’ll learn about the following:
What Is DBA?
Before moving forward with our discussion of how you can complete the fictitious name registration for your business, we will talk about the details of DBA first.
Let’s say your business name is “XYZ.” However, for some reason, you cannot use this type of name in the industry. This is where you will opt for DBA registration. Here, you will choose a new name for your business from the search directory, and once you are sure about it, you will start with the filing process.
DBAs are used for multiple businesses, like a sole proprietorship, Limited Liability Company, or any other such type of registered company.
Importance of Setting Up a DBA
No matter you are involved in non-profit organizations or a Limited Liability Company (LLC), DBA has proven to very essential for several businesses. Here, we will discuss the importance of the relevant business names that you can register for.
Every LLC (Limited Liability Company) is asked to process the name’s online registration. However, this particular method is very difficult since one has to consider a great set of rules for ensuring your business doesn’t get involved in any legal conflict. This is why many businesses come up with the DBA since, with this, you wouldn’t have to worry about the registration process.
Operation of Multiple Businesses
If you want to establish multiple business types, it is the DBA that will help you to do so. This fictitious name will make sure different forms of your business are known by unique names, be it a sole proprietorship, multiple LLCs, or anything related to that.
Perfect for a Sole Proprietorship
For sole proprietorship business owners, DBA serves as a great tool for keeping themselves separated from the business and avoid paying personal income tax through the profits earned by the business.
Helps in Keeping the Business Compliant.
If you want to keep your main business and the additional businesses compliant, registering yourself for DBA will be a great idea. Make sure to choose a unique name so that no problem arises with the compliance factor.
Helps in Introducing a Creative Name
In most cases, a professional business advisor will always suggest you look for a DBA name since that will provide you better flexibility in handling business license, business taxes, business filings, and so on.
How to Set up a DBA?
For setting up the DBA name, you will need a proper business strategy. That is why here we have come up with the three most important steps you need to follow as potential business owners to get the fictitious DBA name.
- Select your state
What you must first do is choose is the state where you are going to open the business office. It doesn’t matter whether it’s a foreign LLC or a domestic LLC; you can file for DBA in both cases. State selection is very important because the taxes and other types of details will vary from one to the other.
- Choose a proper DBA name.
What you must do next before filing up the DBA forms is to choose a proper name for representing your business. You need to check whether the name you have chosen is available with the domain list or not. Also, the name you have chosen shouldn’t match with any government entity and must not be similar to another business.
- Register your DBA with the state authority
Once you choose the proper name after complying with all the rules, you will have to look for the registration process with your county or city’s clerk office. Depending on the state, you might have to register your company with multiple government tiers.
For What Businesses Can DBA Be Used?
The DBA name can be used for many businesses. Here, we have explained a list of all those structures where DBA is applicable.
- Sole proprietorships
- General partnerships
- Limited Liability Companies
- Non-profit corporations
- Limited partnerships
- Limited Liability Partnerships
IRS explains the taxation structure for the business and how they operate. However, as DBA is a name and not a business structure, you won’t have to file any tax report for the same.
How to Add a DBA to an LLC
To add an DBA to your LLC you need to select the name of your choice and search for its availability. You will be required to fill the DBA form and submit it to Secretary of State office along with your registration.
Adding a DBA to an LLC is a relatively simple process. The process is typically as simple as filing a form with the appropriate state or local government agency. However, there are a number of things to consider before making the leap.
First, you need to consider what you’re naming your LLC. For example, you might want to register a DBA for your food truck. A food truck is an illuminating entity in its own right, but you don’t want to confuse your customers with a DBA that is for a main street dry cleaner.
On the other hand, you might want to consider a DBA name that can also be used to advertise your other businesses. For example, an art academy may want to consider a DBA name that includes the word “academy”. This type of name could be a winner in the competitive art world, but might not hold up in the food truck space.
One of the more interesting things about a DBA is that it is a fictitious name. For example, you might be opening a food truck that caters to people on the go. You could use your DBA as the title for your food truck, and accept payment as the Living Well LLC. This is a great way to distinguish yourself from your competition.
Using a DBA is also a good way to avoid having to use the same name as other businesses. Aside from the fact that you’ll be doing business under a different name, you will also be able to avoid infringement on your intellectual property. This is especially important if you plan to do business in several states. In addition, you may be able to take advantage of flexible tax status options, which may make your business more competitive.
It’s not surprising that some business owners take the time to register a DBA. However, the process isn’t always as simple as it sounds. For example, you may be required to file in more than one county. This can be confusing if you’re only focusing on one state. You should also consider if you’re able to do the filing yourself or if you’ll need a professional. Depending on your state, you may be required to file your DBA online or in person. You’ll also have to pay for the DBA’s annual renewal.
Adding a DBA to an LLC also takes time. Most states require you to renew your DBA every year. However, there are some states that will allow you to keep your DBA for as long as you want. The cost for this type of registration will vary depending on your state and county, so it may be worth your while to look into a DBA service. If you’re still unsure about what to do, consider using a company like Swyft Filings to handle your DBA registration. You’ll save on your tax bills and get a more professional image.
The process of registering a DBA to an LLC may seem like a daunting task, but it’s not. Often, you can simply follow the instructions you receive from your local government agency or DBA provider.
No, DBA and LLC are not the same. DBA is nothing but a fictitious secondary name which any business can adapt for several reasons, including the LLC, like:
1. Finding the proper domain name
2. Maintaining privacy
3. Separating the business entity from yourself
4. Easy name registration
5. Increasing the credibility
On the other hand, LLC is a company opened by a single or multiple members for protecting their personals assets and yet continuing with a business without having to worry about debts, lawsuits, and others.
No, it isn’t mandatory for the DBA to have Inc. as a part of the name. DBA can be any name as long as it does not represent a government entity or an already formed business.
DBA should be filed when you want to open multiple businesses under a single parent company, or you are not finding a suitable domain name for your business.
Doing Business As is required if you are running a business as a separate entity. The process is pretty easy and explained in this article. To file a DBA one has to name it first. It is strongly recommended for any structure of the business to name your DBA. Also, as this is not a business structure itself, it does not involve tax filing.