A Comprehensive Guide to DBA (Doing Business As)
- 1 What is a DBA?
- 2 Advantages of Filing a DBA
- 3 How to File a DBA
- 4 Some Frequently Asked Questions About DBA
- 5 Conclusion
What is a DBA?
DBA stands for doing business as. Some states use different names or terms for DBAs. Colorado, for example, calls it a trade name. Some states call it a fictitious name or an assumed name, but overall a DBA, trade name, fictitious name, whatever you wanna call it, it’s all pretty much the same.
If you own a business, consider filing for a DBA (Doing Business As). It will allow you to operate a business under a name other than your name or your registered business name and help you to avoid certain legal problems.
A DBA is a way for you to give your business or a specific part of your business a different name than the one you registered it under. But despite its name, a DBA isn’t an actual legal entity (like an LLC) and doesn’t offer the same protections as an LLC would.
For instance, if you own an auto dealership business and now you decide to start an auto-rental business that is owned and operated under a different name say ABC Rentals, you can register your rental business under a DBA statement. This indicates your ownership of the rental business and its relationship with your dealership business.
Advantages of Filing a DBA
There are some of the advantages of filing a DBA are:
Branding & Marketing
It is more straightforward to brand a business when it has a Doing Business As the name. It allows you more freedom in creating a name that will clearly identify your company and the product or service you offer.
If you want to start multiple businesses under a single business entity for example LLC and you want to separate your every business from each other, DBA is a great choice for you.
Registering a DBA is an effective way to add credibility to your fledgling business. And it’s a lot cheaper than starting a whole new company!
How to File a DBA
Every state has different rules regarding the registration of a DBA name. In many states, you can file DBA forms with the secretary of state for a small fee between $10 to $100.
Learn more about how to file a DBA by reading this easy-to-follow guide.
Some Frequently Asked Questions About DBA
Here are the answers to some of the most frequently asked questions about DBA:
Is a DBA a legal entity?
A DBA (doing business as) is not a legal business entity like a corporation or LLC. In some states, you can register your DBA with the state without first forming a legal business entity like a corporation or LLC. But in most states, if you register your business name as a DBA without another legal structure, you’ll be considered a sole proprietorship.
How much does a DBA cost?
The cost of a DBA varies depending on the state but typically falls between $10-$100.
Does a DBA have to file taxes?
A DBA is not a separate legal entity, so it does not have to file separate taxes. Business conducted under a DBA is part of the business’s legal entity like a corporation or LLC for tax purposes.
What is a DBA vs LLC?
An LLC stands for limited liability company is a legal business structure that provides protection for its owners while DBA (doing business as) is a way for you to give your business or a specific part of your business a different name than the one you registered it with under.
What is a DBA example?
For example, James has a men’s clothing business and now he is starting a female clothing brand owned and operated under a different name, J Clothing. He can register the business with a DBA statement indicating his relationship to the female clothing business and his other business.
Do I need a separate bank account for a DBA?
As long as your DBA operates under your LLC, you will not need a separate bank account for your DBA. However, if you run a sole proprietorship, you should have a separate bank account.
Can’t decide which bank is best for your small business? Check out our Best Banks for Non-residents blog.
How long does a DBA last?
When you register a DBA for your business, you must keep track of its expiration date. If you fail to renew your DBA before it expires, you will need to re-file for the same name at a later time.
The length of time you need to keep a DBA in your state may vary. For example, in New York State, you do not have to renew your DBA, whereas in California you need to renew it every 5 years, and in Texas every 10 years.
The following guide will provide you with all the information you need to know about DBA. I hope this guide is helpful, and I wish you the best of luck in your business endeavors.