Everything You Need to Know About DBAs
If your organization uses a “doing business as” (DBA), it’s important to properly maintain the assumed name across jurisdictions. Here’s what you need to know about DBAs – including how to keep them organized and up to date.
Your organization’s name is central to its identity – and critical to its business strategy. While some businesses are known only by the legal name listed on its articles of incorporation (or similar), most are better known by an assumed name – or “doing business as” (DBA).
A DBA, also known as a fictitious, assumed, or trade name, allows your organization to operate under a name other than its official, legal name. The majority of jurisdictions – at the city, county and state levels – require you to register your DBA as a way to protect consumers and allow them access to information about who owns your business.
The process of applying for and maintaining DBAs isn’t inherently challenging, but it can become time consuming if your organization operates across multiple jurisdictions. Below are answers to the most commonly asked questions we receive about DBAs – and tips about how to ensure they are properly managed.
What Is a DBA?
In the majority of jurisdictions, your business will need to register and maintain a DBA if it wishes to operate under any name that isn’t its official, legal name. DBAs are not business registrations, trademarks or domain names and they, alone, do not offer organizations legal protections. Businesses may have an unlimited number of DBAs.
Why Might I Need a DBA?
For some legal entity types, it would be highly uncommon not to register a DBA. Sole proprietorships or partnerships, for example, are unincorporated – meaning the owner (or owners) and the business are the same entity with the same name. That means, if the owner(s) wish to operate and market the business under a name that is not their own, they must register a DBA.
Further, business entities that aren’t registered with the state don’t receive an employer identification number (EIN) – which means they are barred from opening a business bank account and have no way of separating their personal and professional finances. DBAs help to rectify this issue: when you register a DBA you receive an EIN, which allows you to open a business bank account.
Other legal entity types – like corporations and LLCs – that are incorporated and have a business name registered with the state, may still choose to apply for a DBA, for the reasons outlined below.
What Are the Advantages of Having a DBA for Corporations & LLCs?
Branding
Your organization’s legal name may not adequately convey the exact message you wish to convey to customers, clients or prospects – and a DBA can help to clarify. If, for example, your organization’s legal name is Emily Williams Real Estate, LLC, but you wish to more clearly communicate the fact that you manage rental properties in San Francisco, you may register the DBA, Bay Area Apartments.
Flexibility
DBAs give organizations the ability to easily rebrand as their business evolves or to add branches to their existing business. If Emily Williams Real Estate, LLC decided to start selling property in addition to managing rentals, a second DBA, Buy Bay Area, could be registered. Having separate DBAs under a single entity streamlines operations and makes it far easier to keep your organization compliant.
How Do I Apply for a DBA
The DBA application process varies by jurisdiction and entity type but generally requires you to submit information about your business and a filing fee to the secretary of state and/or city or county clerk. Some jurisdictions will also require you to place a public notice – in a local newspaper or similar – for a predefined period of time as a way to share your business’ name with the public.
Please note that if you operate a corporation or LLC, your business licenses must be in good standing – underscoring the importance of properly maintaining all legal entities.
How Do I Maintain My DBA(s)?
Once you register your DBA, you will need to regularly renew it, though specifics vary by jurisdiction. In addition to renewing your DBA before it expires, some jurisdictions require you to file an amendment or submit a new registration if there is a change to your legal name, business address, or officers, members or partners.
What’s the Best Way to Manage DBAs?
If your organization operates across multiple jurisdictions, registering and maintaining DBAs can become one of many requirements in the long list of tasks you must complete to operate legally. Keeping track of when DBA renewals are due – and remembering where to submit information when amendments are needed – can easily get lost amid the churn of annual report filings, business license renewals, and other, critical compliance tasks. The potential for mistakes is higher when entities are managed manually (with a spreadsheet and calendar reminders or with a traditional, national registered agent).
The most reliable way to keep your DBAs up to date is with entity management software that automates DBA renewals. In addition to filing on your behalf, the right solution will have a user-friendly interface that allows you and stakeholders to access a single source of truth – so you can be confident that your DBAs are being properly maintained.
Filejet is cloud-based entity management software that automates DBA and business license renewals, annual reports, and more for U.S. and international entities. These offerings are backed by Filejet’s digital registered agent service, which leverages software and human support to upload all official correspondence to a transparent, easy-to-navigate portal. These services remove the administrative burden of renewals and other filings from your team – while ensuring you remain in good standing.
