DBA stands for “Doing Business As” and a DBA can be really beneficial for your company, and even needed in some cases. It’s important to know what this term means in the business world and is always good to keep in mind how to get one.
Today, you will learn all you need about DBAs, and how having one can help your business grow. A DBA is also known as a fictitious name, trade name, or even fictitious name.
Basically, a DBA is a nickname, for your company something shorter and better for business. Also, if you don’t currently like your business name too much, you can get a DBA, or change the one you have if already have one.
This way you can continue your business activity using the name that you have chosen. Of course, businesses don’t get DBAs simply because they don’t like their names now, there is a lot more than that.
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Do you need a DBA?
For starters, a DBA is not necessary by any means to run or have a business. But it may come in handy in some situations, and it is something that you can use to make your company grow.
For example, if you want to promote a brand or a new product but not in the name of your company, you can use a DBA. This way, it has its own name, and that’s how you promote a new brand in a new sector.
It may be beneficial whenever you want to expand, and some other uses too. Just to be clear, the problem is that DBAs don’t count with liability protection, which you have to be aware of.
It will also allow you to receive payments in the name of your company’s surname and not your own name. This will increase the credibility and the credit of your company. It can also be used for privacy, this way not everyone knows the exact person who is behind the company, in case you may be interested in that.
As you can see a DBA has many advantages, now you can answer the question “what is a DBA?” with a precise answer.
What does having a DBA mean?
Having a DBA means that you as the owner of your company, decide to take actions in the name of said company. For example, if you are purchasing a product from my company, you will not be purchasing it from me personally, you will be buying it from “DBA”.
This gives you a level of privacy and makes your company look more professional.
How can a DBA be useful for your business growth?
DBA is essential for those who are not interested in getting a traditional LLC business. Also, for small companies that would like to branch out to other markets or types of business.
The DBA will allow you to request certain important documents, like an employer tax identification number. It also allows you to receive payments in the name of your company and open company bank accounts.
Also, in case you want to get other kinds of companies, you can get another DBA instead of another LLC. This could be advantageous because will reduce the cost of taxes.
You can get as many DBAs as you want, but more is not necessarily better, investigate the way it works.
What is DBA? (example)
Say that you, John Brown, want to make business with your company under the name of “John’s Shack” the store he owns. Then, you will have to get the DBA “John’s Shack” and now the payments will have the DBA instead of his personal name.
And all of the things we have discussed so far will apply.
What is DBA and LCC?
They are both completely different things; the LLC is a whole different company structure. While DBA is another name your company can operate under. To make it easy, an LLC is a different company, but no matter how many DBAs you own, you have one single company.
Therefore, one of the greatest differences is that LCC counts with liability protection, while a DBA doesn’t. You can turn a DBA into a different LCC, you will have to register the new LCC in the state.
The process to turn a DBA into an LCC is different for every state, so you will have to go and investigate the process for the state you live in.
How to choose and get a DBA?
Here applies the same, the process to register the DBA is different in every state, so there is no one single process. What is for sure is that you will have to pay from 10$ to 100$ to register a DBA, depending on the state you live in.
Another requirement is that after you have completed the process you will have to publish your DBA in the newspaper.
Even if the process is different, generally is pretty simple, and it doesn’t take too long. For example, in California, you will simply have to register your DBA with a state clerk.
Another important thing that applies for every state is that you must check that the DBA you are choosing isn’t already taken. If the name you want was already used, you will not be able to use it anymore.
As a recommendation, if you choose your DBA you should also buy the domain name of your company’s fictitious name. Just to ensure that nobody else takes it.
Can you do DBA online?
As we have said the process is different for every state, it may be possible that you can register it online in some states. However, in general, terms, is not possible, in most states you will have to register it personally in the county clerk.
Anyway, you can go to the county clerk of your state to figure out the process. Or look up online instructions to register DBA in the exact state you are located.
How to get a DBA license?
When someone talks about undertaking a business, he/she has to think about a DBA License. In this business world simply offering a product or service has to follow established regulations. But, what is DBA? And how it should be useful for your entrepreneurship?
What is a DBA license?
Some people ask, is a DBA a business license? But to know what is a DBA license, you must first understand what this acronym stands for.
tDBA corresponds to “Doing Business As” and it is mainly used to give the business or franchise a name or brand, in order to carry out negotiations without using the owner’s (owners) legal name.
In other words, it is a pseudonym for your entrepreneurship that does not give your personal assets any kind of responsibility or protection. This figure is recommended when it is a sole owner instead of a society.
DBA is not a legal instrument, although it allows businesses to enjoy privileges, avoiding any illicit activity, as this procedure is protected by the country’s laws.
Steps to get a DBA license
The steps to obtain a DBA business license are somewhat simple. Once you define what your business is about, as a sole property. It is better to consult the professionals in the matter; because there are legal, financial and fiscal implications that you should know.
Each State or entity could vary their tariff considerably, from 25 to 100 dollars. In example a DBA license Texas won’t cost the same as one of the same in California, even though the basic procedures are the same as follows:
- Choose an original name. It is important that it does not match any other names on the database.
- Contact the Secretary of State.
- Fill out the forms appropriately and notarize the firm.
- Pay the corresponding tributary tariff.
- Publish the DBA new name in the local newspaper.
What is better, a DBA or LLC?
The advantages of a DBA allow this option to be the most wanted among the emerging entrepreneurs. In most cases, when starting a business as a sole property the DBA is more feasible than an LLC.
The above has a lot to do with the fact that the individual companies do not have any corporation figures and just one person assumes the hits and losses. It is important to mention that the DBA is much simpler and it is not costly compared with the LLC.
However, when you have an LLC but you need to change the presentation or service related to the firm, then it is advisable to register a DBA but there is no need to form another company. No need to state that when the DBA has gains, the declaration is without third person’s intervention.
What is a DBA good for?
Once the need for a DBA business license is established and you understand the essential concept of a sole business owner, there are considerable advantages as the following:
- You can start to receive and cash checks with this pseudonym.
- You could open a business account with this name.
- You can request an employer identification number.
- With the DBA license, you can request a fiscal federal identification number.
- The DBA business license speeds up many legal processes and encourages a lot of business talks.
Where can I get a DBA business license?
The truth is that each county or State has the possibility of obtaining a DBA for entrepreneurs and sole emergent companies. The end is to minimize the damage caused by bad companies.
To obtain it, you only have to register on the official site USPTO (United States Patent and Trademark Office).
Advantages and disadvantages of using a DBA
Speaking about a DBA business license, there are the following benefits:
- You can get an official Assumed Name Certificate for your business, to give your platforms, websites and presentation cards a show up.
- The above action gives your business its own identity that for legal effects is totally different.
But, if you request your DBA business license, to move up your business, you must be aware of the further risk to assume, among which are:
- You would not be able to enjoy official rights for your name because you have a DBA.
- If you use a pseudonym for many years, you do not have enduring rights over the name.
- The business neither has any legal protection, nor the minimum responsibility as if you had an LLC.
- There is a figure known as a “corporate shield” that protects your liability holdings.
- Fiscal benefits are not allowed that are available in case of a business entity that has a legal character.
- If you have a DBA license, you are not protected against risks and responsibilities that making business entails. It is similar to the position of a sole proprietor without a business name.
- The use of a fictional name in one county does not mean that the name is validated in the rest of counties in the United States. You could only make business in that county.
- The use of your business name is not of your exclusive use, in other words, if a resident from another county uses your pseudonym, you cannot do anything.
Names in DBA
The names for DBA licenses must have a touch of originality and should be different to others. Even if in theory, it could be legal it is not to use a name that someone else is already using, it is not recommended.
And it may seem very simple, but the action of choosing a name should be a serious consideration to avoid future mistakes or other problems related to business brands plagiarism. These options should be avoided:
- Names that are related to government organizations.
- Avoid words associated with lottery or illicit activities.
- Avoid expressions restricted to banks, lawyers or universities that need to be certified.
- Prohibited terms, as veteran, invalids, legion, foreign or world war.