What is the DBA?

DBA or 'Doing business as' also known as a trade name, is the fictitious name you choose for your company, different from your own, to use while conducting business. This name differs from the registered legal name of the business, since when you first create a venture, its legal name defaults to that of the individual or organization founding the business. This is in case you do not register your business as a legal entity, or if you decide to use a DBA.

Let's use an example for you to see it in a practical way. An entrepreneur named John Smith, decides to start a business coaching venture as a sole proprietor. In this case, his company will get his same name. But John decided to register his company under a DBA.

John's Business Coach Academy. By doing this, his legal name, John Smith, is not legally attached to the business name of his company, even though he keeps carrying all the liability and tax actions of it.

Characteristics of the DBA

Not all businesses require a DBA to operate most effectively. This will depend on the type of legal organization, the local bylaws and the owner's preferences.

In general, sole proprietorships and partnerships are the most likely to use DBAs to avoid using the full name of any of their partners. This is because sole proprietorships and partnerships are not incorporated, so they are not required to file documentation about the founding of the company or register a trade name for it.

You must register the DBA with the local organizations in your country that deal with this. Although the owner and the company are legally the same entity, which means that they carry the same name. But in the case of registering a DBA, they remain the same entity, but with two different names.

In most countries, corporations, limited partnerships and LLCs do not require the registration of a DBA. This type of legal business organization requires the use of a trade name when registering with the local government.

However, if the owner so desires, a DBA can be used for these types of businesses. This is done to allow the partners in the venture to conduct business under a different name than the one registered on the paperwork.

Most of the time when an LLC or partnership registers a DBA, it is when it wants to start an alternative venture within the company itself. For example, let's say you have a coaching company that offers many services and you want to register some DBAs for different sections of it.

This strategy saves the company the time and money needed to start a completely new venture subordinated to another LLC or corporation.

You should know that if you register a DBA without first legally forming your company, your local government will automatically see your company as a sole proprietorship.

How to register a DBA?

The manner in which you register your DBA and the requirements for it vary depending on where you live and the legal structure of your business. Generally, registering your DBA involves some documentation and a registration fee that can range from $10 to $100, depending on where you are located.

You will need to find out the local entity that is dedicated to DBA registration, so that you can register the documentation. In some locations you may be required to publish an advertisement in the local news for a period of time to comply with the public notice stipulations of local laws.

You should keep in mind that when you choose your DBA, it should not end in Inc, LLC or Corp, as this conveys that your company has a corporate status, when in most cases it does not. Given the above, there really aren't many limitations when choosing your DBA.

What I advise you to do when you want to register your DBA, is to first do a search of other companies in your same location, to be sure that the name you chose is not being used by any other company.

Tips on DBAs

Here are some tips and recommendations on the process of choosing and registering your DBA:

• When you want to get a DBA and your business is structured as an LLC or corporation, you are usually going to require filing a certificate of good standing.

• In some places it may be possible to do this completely online, while you will need to mail it in at other times.

• In some places you will be able to submit all documentation online, while in others you will require notarized documentation.

• If you do business under an unregistered false name, you can be heavily fined by your local or national regulatory agency. Try not to do this.

• All DBAs have a set expiration time, which can be 3 years in most cases. That's why you should stay on top of keeping your DBA up to date or it can have negative consequences from a marketing perspective.

• In some countries it is also required to file a new DBA in the event that the data initially submitted has changed, such as in the case of changes in the company's address or partners. In some places you will only need to amend the previous registration, while in others you will need to file again.

• In general, the registration process is relatively straightforward and you will not need to hire a lawyer. You, as the owner, can go through this entire process, either online or in person. However, in the event that you do not understand how to do it all, it is advisable to hire professional help.

• In cases where your business is set up as a sole proprietorship or partnership you may encounter a difficulty. If you have not registered your business with the registrar you will not get an employee number, and without it, your company cannot open a bank account for business purposes.

• You should know that when you register your DBA, you will also require the employee identification number.

• In case for example the name under which you are incorporated is Alex's Life Coaching and you sign a contract with a client with the name Alex's Ketogenic Diets, it will not be valid.

• Choosing the perfect name for your business in the beginning is a complicated task. You can't know where you will be in the future and how your business will evolve. If you are having a hard time choosing a good name for your company, you can use a company name generator to support you in this process.

• In order to, for example, expand your startup to more websites, more physical stores, more services, etc. you will need to register a DBA for each one.

• Also if your business expands to other provinces or states, you will need to register a specific DBA for them to avoid penalties. The DBA you initially chose will only have use in the state or province of your registration, and every time you want to use another name you will have to register it in the corresponding locality.

• It is advisable to go through this whole process before opening the doors of the company. At least, start the procedure between 3