DBA

DBA

A DBA, or “Doing Business As” name, is a registered trade name under which a company operates that is different from its legal, registered name. Here are the key points about DBAs:

  • DBA Registration: It’s used primarily by sole proprietorships but also by corporations and LLCs that want to conduct business under a different name than their official legal name. Registering a DBA allows companies to do business under a new name without having to form a new organization.

  • State Requirements: The requirements for registering a DBA vary by state, county, and sometimes city. Some localities require registration to inform the public of the real owner of a business.

  • Banking and Branding: Registering a DBA can be beneficial for opening a bank account and marketing the business. It helps to create a separate professional business identity.

  • Expansion and Brand Differentiation: Businesses may choose to operate under a DBA to introduce new lines of business or brands without creating a separate legal entity.

  • Proof of Good Standing: When a corporation or LLC files for a DBA, they often must provide a certificate of good standing to prove that the company is compliant with state regulations.

  • Ownership of the DBA: It’s crucial that the DBA is registered under the business entity (corporation or LLC) and not an individual to ensure that it falls under the protection and authority of the entity.

  • Transferring a DBA: If a DBA is initially filed under an individual’s name, it’s usually possible to assign it to a corporate entity later on, such as a shelf corporation or LLC. This helps maintain the corporate veil and separates personal liability from business liability.

DBAs do not provide legal protection like forming an LLC or corporation would; the DBA is simply a name. For businesses that are structured as sole proprietorships or partnerships, registering a DBA does not offer any protection from personal liability. However, in the context of a corporation or an LLC, the entity’s liability protection extends to the DBA. Always check with your state’s specific requirements to ensure compliance when registering or operating under a DBA.