WHAT IS A DBA AND DOES MY BUSINESS NEED ONE?
A “doing business as” (DBA) also called a Fictitious or Assumed Business Name, is a name that a business uses in practice that differs from its official registered name. For example, if you registered your business with the Secretary of State as “Katie’s Lawyer Services, LLC”, but you operate your business as “Awesome Lawyers”. “Awesome Lawyers” would be the DBA of “Katie’s Lawyer Services”.
Sole Proprietorship or Partnership
Those starting either a sole Proprietorship or a partnership have the option of either choosing a business name or a DBA. If you operate a sole proprietorship or partnership under a name other than your own or your partner’s full legal name (such as, Katie Smith operating a business under “Awesome Lawyers”), depending on your state, county, or city you may be required to register your DBA (also known as a fictitious or assumed name).
Corporations and LLCs
Registered Corporations and LLCs are generally only required to file a DBA if they are operating their business under a name that is different from its official registered name, such as “Katie’s Lawyer Services, LLC”, operating as “Awesome Lawyers”.
DBAs are particularly useful to corporations or LLCs when the business wants to drop the “LLC” or “Inc.” or use a different name for a separate line of their business. For instance, if a restaurant wanted to expand into selling food products, it wouldn’t have to form a whole new business entity, it could just file a DBA to sell its food products under the new name. This is a great cost-saving and efficient way to have various brands/products under one business.
The consequences of a business operating under a name other than the legally registered name, without filing a DBA, is that the limited liability protection granted to the business will not apply to those agreements entered into under the non-legal name and it may also invalidate those particular agreements.
Limitations on DBAs
There are very few limitations on DBAs, the most significant one being that a business cannot use a DBA that includes the words “corporation”, “Inc.”, “Corp., “LLC”” etc. unless it is registered as an LLC or a corporation with the Secretary of State. This is in an effort to prevent the public from being mislead into believing a business is a corporate entity when it is not.
How to file a DBA
The procedure to file a DBA differs from state to state. In some states, including California, a DBA is not filed at the state level, instead you must register your DBA with the County Clerk in the county in which the principal place of business is located. The registration fee is usually nominal from $10 to $100. Depending on where your business is located, there may also be a publication requirement. Many local newspapers offer a flat fee to meet the publication requirement.
While this article strives to provide information on DBAs, we highly recommend that you speak with your business attorney for further guidance.
For more information on whether your business needs a DBA and how to file a DBA, please contact O’Neill Tran Law at firstname.lastname@example.org.