Close the Skill Gap -> Enroll to be a Certified Financial Modeling & Valuation Analyst (FMVA)® Today!

Doing Business As (DBA)

Operating a business using a name that is different from the name of the business owner

What is Doing Business As (DBA)?

Doing Business As, or DBA, is simply operating a business using a name that is different from the name of the business owner. For some states, Doing Business As is also referred to as “Fictitious Name Filing” because it uses a fictitious name that is not the same as the legal name of the company if it is a corporation.

 

Doing Business As

 

Who Needs to File Doing Business As

In most DBA cases, it can be seen that companies using the DBA method are sole proprietorships. Some business owners don’t want to use their own name on their business name and so they adopt DBA. However, if a businessman wishes to use his own name, then he doesn’t need to file for DBA.

A Doing Business As is to be filed because the ownership of the business must be made clear to both the customers and the state. Should there be any issues that arise concerning the business, the customers have the right to know who they are transacting with.

 

When to File a Doing Business As

There are many instances wherein a business needs to file a DBA. In addition to when a business owner doesn’t want his or her name on the business name, there are other times when filing a DBA is necessary:

  • In some cases, a DBA is required by the bank, especially when a sole business owner wants to open a bank account.
  • There are also instances when a client requires a contractor to file a DBA when bidding in order to get a project.
  • In case a company is expanding its business to areas that are not covered by the current business name, a DBA is required. For example, if the current name it carries is “Jane’s Wedding Couture” and it wants to expand its reach to include many other party clothes, then it will need to file a DBA. in such a way, customers will know that it isn’t just all about wedding gowns.

 

How to File a Doing Business As

It is important for business owners to understand that various states in the US follow different procedures regarding filing for a DBA. The process may be simple or complex, with some states simply requiring business owners to head to the nearest country clerk, register their fictitious name in the registry, and pay a license fee of $10 to $100.

 

1. Secure an Identification Number

An identification number is required when filing a DBA which is used for filing business tax. Using one’s Social Security Number is not advised because it exposes the owner to identity theft.

 

2. Register the fictitious name

Some states do not require registration of fictitious names but it can pose a problem, especially if there is a duplication of names. Therefore, it is for the safety of everybody to get their fictitious name registered. With technology advancement, online registration is already possible wherein the form filed gets scanned for errors before being submitted to the right agency.

Furthermore, some states require that the fictitious name is advertised in the local paper and that the owner submits an affidavit, confirming the completion of requirements for Doing Business As.

 

3. Get your trademark

When a fictitious name is registered or filed for DBA, the name needs to be registered with the U.S. Patent and Trademark Office, as well as with the Secretary of State. By doing so, the trademark rights of the name are given to the owner.

 

Advantages of Filing a Doing Business As

There are many advantages to filing for Doing Business As, including:

  • A great amount of privacy. Of course, when a business owner’s name is not used in its company’s name, then there is a lot of privacy to be enjoyed.
  • Expand the business. With DBA, it is much easier for business owners to expand their business’ coverage or try to enter a new market.
  • More value and attractiveness. If one names his ice cream business with his own name such as in “Peter Gallen’s Ice Cream House,” it would not sound as delicious and attractive as calling it “Cold and Creamy Ice Cream,” right?

 

Related Readings

CFI offers the Financial Modeling & Valuation Analyst (FMVA)™ certification program for those looking to take their careers to the next level. To keep learning and advancing your career, the following resources will be helpful:

  • Full Disclosure Principle
  • Prospectus
  • Types of SEC Filings
  • US – EDGAR

CFI's Corporate & Business Strategy Course

Learn to perform Strategic Analysis in CFI’s online Business Strategy Course! The comprehensive course covers all the most important topics in corporate strategy!