DBA - How to File for a Business
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When establishing your business, whether a sole proprietor, partnership, or LLC, you will have a legal business name. In many cases for a sole proprietor, for example, this would just be your name. Often, however, businesses are looking to operate under another name—be it they want a more brandable name or perhaps an LLC is looking to branch out and offer other products/services under a different name. In this scenario, you would register for and file a DBA (doing business as/). A DBA is not an entity in and of itself; it is merely a separate business name that you would select and operate under. In this article, we take a look at the process of filing for a DBA.
Start with Your State
The process will vary somewhat from state to state. In some parts of the country, the state will require you to register with the secretary of state's office. Other states are fine with businesses filing at the county level with the clerk's office. So you will first need to figure out where the process begins in your particular state. Also, depending on your business structure, you may have to file at two different levels—both state and local.
Search for your Intended DBA Name
If a DBA name is already in use at the local or state level (depending on where you're required to file/) you will have to choose a different name. You also need to make sure that you are abiding by all DBA name rules and regulations. Again, states will differ in terms of any guidelines required for choosing a DBA name.
Register Your DBA
Once you've chosen the name and ensured that no one else is currently using that DBA, then you can go ahead and register in your state or at the county level as required. The paperwork for filing a DBA is rather short. And most states will have an associated filing fee—this however is most often minimal. You again want to make sure that you are not required to file your DBA at more than one level of government.
To review, a DBA (doing business as/) is any name used that is not the legal name of the business. It is perfectly acceptable to operate a company under something other than its legal name as long as you do go ahead and register that DBA with the state and/or local government agency. So why exactly would you need a DBA…
- As mentioned, some companies are looking to branch out into other areas not directly associated with their current niche. A DBA to this end is a great way to start a new brand and thus a new branch of the business.
- If you are a sole proprietor and would like to conduct business under a more formal name (other than your name/) then a DBA is going to be the way that you do this.
Remember too, that a DBA is not a formal business structure. They have to be associated with an established business entity—so a sole proprietorship, LLC, or partnership for example. If you are a sole proprietor or a partnership and you file a DBA this does not mean that you will have liability protection. These business entities are such that the owner's assets are inevitably tied to the business. A DBA does not change this.
Filing a DBA and Paying Taxes
The DBA itself will have nothing to do with the business and taxation. Taxes are paid by company structure. So a corporation for instance will be taxed differently than a partnership is, regardless of whether or not it's in place. You will therefore not file taxes under a DBA but rather under the legal name of the business.
One of the ways that the IRS does oversee businesses as far as tax reporting goes is via their EIN (employer identification number/). This is very much like a social security number but specifically for businesses. The DBA will not have its own EIN as it is not a business entity. Instead, it will be attached to the EIN that has already been assigned to the business under its legal name. If a company does not have an EIN (this may be the case with a sole proprietor/) you can easily apply for one on the IRS website.
When to Use a DBA
For Branding Purposes
Among the more common reasons for registering a DBA is for branding. Especially if your company does work in different niches, having a DBA for the different branches of your company makes sense. From an overall marketing standpoint, you should choose a DBA that grabs people's attention and aligns well with the concept of your brand.
For sole proprietorships, they often have legal names that are nothing more than just their name. To this end, privacy can be an issue at times. If you are a sole proprietor and your company operates under your name, then that name is likely to come up in public records as well as online searches. A DBA can help with this.
In some instances, a bank will require sole proprietors or general partnerships to establish it before setting up a business banking account. You will want to check with the banking institution to see what exactly is entailed with setting up a business account.
Every business has an online presence and generally, every business has a website. You of course want your company name and domain name to be the same. This might be another reason to file a DBA to align with a domain name you already have.