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 Doing Business As (DBA) to an LLC is a process many entrepreneurs face, especially those running multiple businesses under one company umbrella. A DBA allows a business to use a different name than the LLC’s registered name, providing the opportunity to market and advertise new brands without the need to create separate LLCs for each business. Adding a DBA to an LLC is a relatively straightforward process that can be accomplished in a few steps.
The first step towards adding a DBA to an LLC is to conduct research on the name you want to use. This is important because each state’s laws are different, and the name must not be already in use. Conduct a thorough internet search and consult with state database records to ensure that the name is not already taken. Once it has been established that the chosen name is available, it is time to start the registration process.
The second step is to file a DBA or a fictitious business name with the state that your LLC is registered in. This form is often found on the Secretary of State’s website and varies depending on the state. Some states require a separate filing fee, so be sure to familiarize yourself with your state’s requirements before filing. In addition to filing the required documents, an appropriate published notice must be made in the local newspaper to provide the public with notice of the DBA filing. The notice is usually required to be published for several weeks before it becomes effective.
The third step is to notify your financial institution of the newly-formed DBA. Notify your bank, credit union, or any other financial institution where you hold an account about your new DBA so that all future transactions and account information reflect the new business name.
The fourth step is to ask for various permits and licenses required for the newly-formed business depending on its nature. For example, if your business is involved with food services, you may need to get specific licenses and permits for food handling and preparation. It is important to do your research as to which entities are involved and to obtain the necessary permits or licenses.
One thing to consider when adding a DBA to an LLC is that adding a new brand or venture may affect taxes and insurance requirements. While not always the case, it is important to double-check and make changes to your LLC insurance or taxes as necessary.
Finally, it is important to stay up-to-date with any necessary reporting requirements and retain proper documentation. The name-change filing must be done annually in some states, and failing to comply with state regulations can lead to fines, penalties, and seizure of licenses. Retaining documentation can also protect your business and provide important information for potential litigation later.
Adding a DBA to an LLC can have multiple benefits when done correctly, including: increasing visibility, segmenting business ventures, and promoting branding and marketing concepts. To succeed, research, diligence, and proper documentation is required throughout the process. It is important to remain conscious of the additional requirements and seek assistance from achieving these tasks or consider hiring a professional service to help complete them successfully.
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.
1 thought on “File a DBA – What Is ‘Doing Business As’ While Forming an LLC”
Si tenías un DBA y lo pasas a corporation. Por ejemplo tenías empleados y varios camiones y decidisteis quedarte tú solo sin empleados y un solo camión y quieres volver a ser DBA para reducir gastos en pagos de negocio, Payrroll, bookkeeping y corporate taxes . Puedes llevar a cabo ese proceso . Cuáles son los pasos y si es posible cuáles serían los pro y los contra