While a rose by any other name may smell as sweet, the name of your business could play an important role in courting customers. Registering a DBA, or “doing business as,” name gives you flexibility as a business owner to brand your business in a way that is both explanatory and engaging.
A DBA — also known as a fictitious business name, assumed name or trade name — officially registers your business’s consumer-facing name with the local government. It lets a small business work under a name that differs from the owner’s personal one or the one used to incorporate.
For example, if William Shakespeare filed a DBA, he could work as a playwright under the business name “The Bard’s Poetry and Prose.”
You should file a DBA if the name you choose to do business under is different from your personal name or the legal one you used to incorporate.
Filing a DBA doesn’t create a separate business entity. If you’re a sole proprietor like William Shakespeare, your DBA doesn’t protect your personal assets from being seized in the case of a lawsuit. Forming a business entity means your personal assets aren’t at risk, and filing a DBA won’t alter that protection.
“Generally speaking, you are not allowed to conduct business under a name other than your own” without registering it first, says Regina Gordon, owner of Regina Gordon Law Office PLLC in New York. Registering a DBA means you’ll avoid potential fines and penalties, she says.
If you don’t have a registered DBA, Gordon says, you’re more likely to run into problems opening a bank account or applying for a loan than to face legal action. When you open an account or apply for a loan, you’ll have to provide documents to prove you and your company are legit.
Filing requirements vary from state to state, so your first step is to check in with your county clerk or state government’s office to determine how to proceed. However, here are some tips to help make the process as painless as possible:
“I have lots of clients that start out basically with just a DBA while the business is small and they’re testing to see if it’s going to work or not,” Gordon says. “At some point, when it begins to grow, that’s when they decide they need to form an entity.
“It’s a good first step to test the waters and see if the business is going to take off.”