What Is a DBA? A Guide to How DBAs Work

DBA means “doing business as.” A company can use a DBA as a public-facing, assumed business name in place of their registered name. Owners of sole proprietorships and general partnerships usually use their names to register their businesses, so unless they file a DBA, the business name may default to the business owner’s full legal name. A DBA allows business owners to operate under a recognizable business name without registering an entirely new business.

Filing a DBA with the local government establishes a public record of a particular business operating under a new name without requiring the business to incorporate, as they would with a Limited Liability Company, limited partnership, or corporation (like an S-corporation or C-corporation).

• Branding: A DBA is an easy way to change your business’s name for branding purposes. Whether you’re a sole proprietor who wants to use a brand name or your existing company name is clunky, a DBA allows you to rebrand without actually changing your business’s official name.
• Cost: A DBA is an accessible and affordable way to meet legal requirements. A DBA also gives you access to an EIN (or employer identification number). This tax ID allows you to set up a business bank account and separate your personal finances from your business account.
• Flexibility: DBAs can allow you to brand different branches of your existing business without creating multiple businesses.
• Privacy: Using a DBA can protect your identity if you are a sole proprietor.

There are some situations in which you may have to file a DBA, including:

1. 1. Franchises: Most franchisees operate as independent LLCs or corporations, so they need to file for a DBA to assume the franchise name as their own.
2. 2. Single branch of a large business: If a large company opens a new branch and it wants to conduct business under a different name, it can file for a DBA for that specific location rather than having to start a new business.
3. 3. Sole proprietorships and general partnerships: Sole proprietorships and general partnerships must do business under the business owner’s name unless they apply for a DBA.

A limited liability company (LLC) is a business status that allows the owner to separate their business’ liabilities and finances from their personal ones. A DBA is a different name for a sole proprietorship or general partnership, in which the business owner is still legally liable for the business. Here are some of the key differences between a DBA and an LLC.

• Business structure: A DBA is not set up as a separate legal entity from the business owner and remains the same legal entity as the business itself. Forming an LLC creates a separate legal entity, independent of the business owners, partners, or members.
• Liability: As the name suggests, LLCs offer liability protection to business owners or partners. They cannot be held responsible for the business’s debts and cannot be sued individually for the errors of their business. With a DBA, the business owners or partners are liable for the business's debts and legal operations, and their personal assets may be seized if the business defaults.
• Registration Costs: A DBA is less costly to set up than an LCC or any other entities that require incorporation (like C-corporations or S-corporations). A business owner that wants to avoid higher filing fees may choose to establish a DBA to operate under an assumed business name that is different from their own name, without having to establish a new separate business.

You do not need to file a DBA for your LLC. When you file an LLC, you will choose a name for your business. If you want to use another name later, you can file a DBA.

Many sole proprietors choose to file DBAs, but the practice is common among corporations, too. Here are three examples of large companies that use DBAs or trade names:

1. 1. Advance: Advance Publications, Inc., the parent company of Condé Nast, does business as Advance. Shortening the company’s official name is a popular reason to file a DBA.
2. 2. Disney: The Walt Disney Company goes by the much shorter trade name Disney.
3. 3. Virgin Atlantic: Richard Branson’s Virgin Atlantic Airways Limited and Virgin Atlantic International Limited do business as Virgin Atlantic.

DBA pricing depends on the state, city, or county. In most states, a DBA is $20–30, but it can be as little as $5 or as much as $150. Your state may call DBA a “fictitious name,” “also known as,” “assumed name,” or “trade name.”

There is no limit to the number of times you can file a DBA. However, filing many DBAs can be time-consuming and confusing for your customers or clients.

Filing a DBA is one of the simplest ways that a business owner can differentiate their identity from their business’s brand. However, before you start using your fictitious business name, your business needs to file a DBA with the state. Here are some tips to follow when performing a DBA name filing:

1. 1. Look up your state’s requirements. DBA filing occurs at your county clerk’s or state government office, and DBA registration fees can vary state to state, costing as much as $100. Certain states require a public announcement of the new DBA name in a local newspaper. Familiarize yourself with these requirements before going any further.
2. 2. Choose a unique name. There are very few restrictions on DBAs. However you cannot include “LLC,” “Inc.” or “Corp.” in your new business name. Do a quick search to make sure that your DBA name is not already in use.
3. 3. File your DBA. Once you know the specific requirements of your state and have chosen a business name, you can file your DBA name registration in the place where you do business.

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