The Complete Beginners Guide To Get A DBA For Your Company

Choosing a company structure like an LLC or a corporation is the first step for a new entrepreneur when registering a new firm. Your secretary of state's office could have a "DBA" form that you need to fill out at some point. A DBA, or "Doing Business As," is the name under which you operate and promote your business. DBAs can be used by business owners if their legal name is different from the one they use to do business.

There is, unfortunately, a lot of confusion concerning DBAs and how they differ from legal names that are listed on business registration paperwork. Everything you need to know about DBAs will be covered in this post, including what is a dba, how to hire one and the advantages and disadvantages of doing so. There are several factors to consider when deciding whether or not your small business needs a DBA. So read and grab the details.

What does DBA stand for?

A DBA allows you to run your business under a different name than the one you have registered. Fill out this form if you are "doing business" under a different name from the one on file with your state.

A DBA registration is required if you want to start a new business under a different name from the one you specified on your legal documents. Consequently, As a result, the name of your fictitious company will be made public. Now that you are well versed with DBA meaning let us jump to the reasons to form a DBA.

Reasons for forming a DBA

It is possible for small business owners to submit a DBA request for a variety of reasons:

Using a different identity

In order to operate your business under a different name than your own, you will require a DBA. It is feasible to avoid a DBA filing if you incorporate your own name in the business name. It is possible that a DBA will be necessary if your business name implies that there are several owners or if only your first name appears in the name.

Multi-business or multi-website operation

A DBA may be necessary if you want to extend your product or service lines and offer those goods under a different name. A DBA is required for each new branch of your firm if you do business or sell items across many websites. 

Credibility

It is possible to get greater credibility by registering a bogus business name. A sole proprietorship is an example of a business that is owned and operated by one individual. Having a DBA would allow you to choose a more appropriate operating name for your firm.

Using a more professional name for your business might help you look more trustworthy to both customers and investors. Google and other search engines will also be able to discover you more easily. It is also possible to gain brand awareness by registering a DBA for your firm. 

Business banking

The only way to create a business bank account is to give a tax identification number. EINs aren't issued to sole proprietors and general partners until they've registered with the state. You're likely to be mixing your personal and business money if you hold a sole proprietorship or general partnership without a tax ID number, which is a significant concern.

You'll get an EIN when you register a DBA under your company name. Your firm will gain credibility, and your financial situation will improve as a result of opening a separate business bank account.

Keep legal safeguards in place

A DBA is not a guarantee of legal protections on its own. The corporate veil is maintained, though. Liability protection is available to owners of limited liability businesses and corporations. There is no way for a lawsuit against a corporation to go after the personal assets of the owner.

There will be no personal safeguards for business proprietors who use a company name other than the one shown on their registration documents. The corporate veil is pierced by managing a distinct legal company without establishing a DBA. Legal counsel and a bogus name certificate would have preserved the corporate cloak.

Problems registering a DBA

Business owners should be aware of the dangers and benefits of using DBAs. In order to proceed, business owners must have a firm grasp of how DBAs operate:

There is no legal right to a name

You can use a name with a DBA. Fictitious name filings serve no purpose other than to inform your state that you are conducting business under a fictitious name. A DBA, on the other hand, does not grant you the right to use the name indefinitely.

The absence of legal safeguards

Aside from that, they don't clearly give any legal safeguards. The corporate protection you'd get by registering your firm with the state is not available with a DBA. DBAs expose you to a wide range of business risks and obligations. You'll have to hunt elsewhere for these safeguards if you want them.

Burdensome

The process of registering a DBA can be time-consuming and cumbersome. You may also be required to fill out paperwork at the county level in addition to the state level. This is something you must accomplish in every aspect of your business. And there's a good probability that someone else has already done so. That means you'll either have to change your name or stop operating in that location if that's the case.

Business structure for registering a DBA

The sort of business you have is critical when it comes to obtaining a DBA:

Partnerships and sole proprietorships

DBA (Doing Business As) is required for anyone who owns one of these businesses and does not wish to use their own name as their business name. Because they haven't filed entity formation documents, these businesses lack a state-registered business name until they do so. Opening a business bank account and better promoting your firm are also possible benefits of forming a DBA.

Corporations and limited liability companies

In each of the states where they do business, these firms have already made the necessary paperwork. An EIN and company bank account should already be in place. As a result, unless they intend to use a distinct name for different lines of business, they do not need to establish a DBA.

Process of getting a DBA

Choosing a business name is the first step in obtaining a DBA registration. Most states ban firms from using a name that is too similar to that of an existing corporation, even if there aren't any particular limitations. Additionally, firms should avoid naming their products and services in a way that might mislead the public. Depending on where you live, your county or state may be able to assist you in checking to see if a given name is already taken.

Once you've decided on a name, you may either visit your county clerk's office or print a DBA form online. State and county-specific guidelines are provided by the Small Business Administration.

In order to get a fake company name, you must complete the correct form and submit it to your local or state government, along with the required cost. If you're changing your business name, you may also have to notify your clients in the local newspaper. This is the entire process for filing a DBA for your company. 

Final Words

Having a DBA might help you better manage your business's money. Your company's reputation might be enhanced, and the veil of corporate secrecy could be shielded. Obtaining a DBA is as simple as submitting the relevant paperwork to your local secretary of state's office. Your company's marketing and operations will be more flexible if you employ a DBA appropriately. So now that you are well versed with all the details regarding DBA and how to get one, get your company a DBA and enjoy its benefits.