Learn 100% online from anywhere in the world. Enroll 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. In some states, it 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

In most cases, companies using the DBA method are sole proprietorships. Some business owners don’t want to use their own name as their business name, so they adopt DBA.

A Doing Business As is to be filed because the ownership of the business must be made clear to both customers/clients 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 for the Status

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 owner’s or the company’s bank, especially when a sole business owner wants to open a business 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 or operations, a DBA may be 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 types of party clothes, then it will need to file a DBA in such a way that 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 relatively simple or relatively 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. It is used for filing business tax returns. Using one’s Social Security Number is not advised because, for one thing, it exposes the owner to identity theft.

 

2. Register the fictitious name

Some states do not require registration of fictitious names, but that 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 possible, wherein the form filed gets scanned for errors before being submitted to the proper agency.

Furthermore, some states require that the fictitious name be advertised in the local paper and that the owner submits an affidavit confirming the completion of all requirements for DBA status.

 

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

There are many advantages to filing for DBA status, including the following:

  • 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 probably not sound as delicious and appealing 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 CFI 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!