Naming your burgeoning business can be one of the most difficult decisions an entrepreneur or small business owner can make. While most first-time business owners opt to do business under their given name, others choose a more creative approach. Whatever you decide, know that most states will require you to file a Doing Business As (DBA) when operating under any name other than your legal given name or the incorporated business name on file with your state.
Filing a DBA lets customers know who they are doing business with. It is even a legal requirement in some states. If you are doing business under a non-registered name, filing a DBA is an absolute must.
What is a DBA?
A DBA, also known as a Fictitious Business Name or Trade Name, allows a company to operate under different business names without forming separate legal entities. Filing a DBA will place your information on file with your state, allowing the customer to track down important contact information. Each state has different filing requirements, and some require any new name to appear in a print publication before being finalized.
Choosing to do business under a name other than your own opens a world of possibilities for your company, the impacts of which will help improve your customer relations. To wit:
Helps Establish You as a Brand
There is nothing inherently wrong with doing business under your legal name. However, a DBA can help build your brand and expand your business’s reach. Establishing a brand can help your company survive for generations and start to build relationships outside of your typical sphere of influence.
Builds Customer Trust
Taking the time to formalize a business name can help can help build trust with customers. It can elevate your product or services from another home business operating out of a garage to one with a reputation for a higher level of professionalism.
Makes Your Business Contact Information Publicly Available
Filing a DBA will also ensure that all past, present, and future customers will be able to find your contact information through your local county clerk’s office. This gives all parties incentive to conduct business professionally and resolve any issues that come up along the way. A business that has not filed a DBA could disappear overnight, potentially leaving customers high and dry.
Expand to New Markets
Filing a DBA could also allow you to expand into new areas where you are not currently doing business, such as a neighboring county or state. While this may not offer the full legal protections of an LLC, it will provide the minimum legal requirements of doing business for most areas.
Can’t Decide Between LLC and DBA?
If you can’t decide between incorporating as an LLC or filing a DBA, remember, they are not mutually exclusive. In fact, many LLCs take advantage of DBA laws to conduct business under several names while keeping everything under a single business entity, making accounting and taxes a simpler task for small business owners.
For a company that offers a wide variety of products or services, you may want to file separate DBAs to expand your service lines. This can allow your separate entities to stand out on their own, create clear proposals for customers, and will allow you to run more targeted marketing campaigns.
Most of the disadvantages of a DBA are canceled out by pairing it with an LLC, but many small businesses do start with a DBA alone. There is nothing wrong with this, but an unpaired DBA has some disadvantages, including:
- No personal liability protections
- Fewer tax benefits
- No exclusive rights to your business name
Each state has its own requirements to file a DBA for your business. In most states, you will be able to check with your county clerk to verify what paperwork is needed and the associated costs. Generally, filing is a three-step process in many states:
- Research if your chosen name is already in use
- Obtain necessary forms and paperwork; Notarize any necessary forms
- Return paperwork to the appropriate state and county offices
For companies not ready to go full LLC, getting a DBA is the next best option. To get it done quickly consider an online business filing company such as Swyft Filings who can help guide you through the process.
