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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.
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.
Easy Registration
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
DBA Taxes
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.
F.A.Qs
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.
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.
The first step in adding a DBA to an LLC is to choose a name that is not already in use by another business. This can be done by conducting a thorough search of existing business names in the state where your LLC is registered. It’s important to choose a name that is distinct and does not infringe on any existing trademarks or copyrights.
Once you have chosen a name for your DBA, you will need to check with your state’s business filing office to see if there are any specific requirements or forms that need to be completed in order to add a DBA to your LLC. In some states, you may be required to file a formal registration form and pay a fee in order to officially register your DBA name.
In addition to filing any necessary paperwork with the state, you may also need to update your business licenses, permits, and tax filings to reflect your new DBA name. It’s important to ensure that all of your business documentation is updated with your DBA name in order to avoid any confusion or legal issues down the road.
Another important consideration when adding a DBA to an LLC is to update your business bank accounts and contracts to reflect your new business name. This may require working with your bank and other business partners to update all relevant documentation with your DBA name.
One potential benefit of adding a DBA to an LLC is that it can help you create a stronger brand identity for your business. By operating under a unique and memorable DBA name, you can differentiate your business from competitors and attract more customers who are drawn to your brand.
Overall, adding a DBA to an LLC is a relatively straightforward process that can help you expand your business operations and reach a wider audience. By following the necessary steps to register your DBA name and update your business documentation, you can ensure that your business is legally compliant and positioned for growth and success.
In Conclusion
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.