Name recognition and branding are crucial to a company’s success, and a unique business name can have a lasting impact. Many business owners choose to use not their personal name but one that establishes a distinct company identity and communicates what they do or sell.
Keep in mind, however, that if you use a name other than your own legal name you must register it with the appropriate authorities. This process is known as registering your “Doing Business As” (DBA) name. Other terms for DBAs include Fictitious Business Name, Trade Name, and Assumed Business Name. Importantly, there are some circumstances that require securing a DBA.
If you’re operating as a sole proprietor and using a name other than your own legal name you’ll need to file for a DBA. It’s required to open a bank account and receive payments in the name of your business.
If you’re operating as a corporation or LLC, you’ve already registered your business name and don’t need a DBA. However, if you plan on conducting business using a name that is different than your registered business name, a DBA is necessary. For example, using “PICA” instead of Professional Independent Consultants of America. Also note that without a DBA, your legal protections as a corporation or LLC may be invalidated.
If you don't file for a DBA and just start doing business under a different name, you could face penalties and fines, not to mention risk lawsuits. In the case of sole proprietorships or partnerships, a DBA statement informs the public of the owner's personal name or the name under which they are conducting business. In the case of corporations or LLCs, the statement can be used to inform the public of the previous legal company name that existed.
A DBA does not give protection or exclusivity to the chosen name. When registering your DBA, you may also find another sole proprietorship, LLC, corporation, or other business entity using the same or similar business name. (If you want to use a name exclusively, you’ll need to get it trademarked.) Finally, a DBA for a sole proprietorship or partnership may not contain any word or corporate ending implying that it is anything other than a DBA (for example, “Inc.”).
With or without a DBA, you should always remember that operating as a sole proprietorship or partnership, as opposed to an LLC or corporation, still makes you personally liable for the debts of your business. (See related article on business structures here.)
If you’re doing business in the U.S., you must file a DBA Statement or register your DBA. In addition, several states require that you publish your DBA statement in a local newspaper, and then file proof of publication with the proper government office. The publication requirement ensures that the public is informed of new businesses in the area, their legal name, and ownership.
The rules, requirements, forms, and fees associated with filing a DBA vary geographically. To help you comply with all the steps, the U.S. Small Business Administration provides a in your county and state. It sounds complicated but it's actually fairly straightforward.
You can also use a legal service, such as LegalZoom, to register your DBA and have confidence that you’re meeting all requirements and won’t accidentally violate the law. This service costs about $100 plus any state filing fees.