Often there is a misunderstanding, especially amongst first-time entrepreneurs, when it comes to registering a DBA. There is a misconception that DBA’s are some sort of a business structure, which is not the case. Registering your business with a DBA, does not mean that a formation business structure is formed, nor does it allow for the business to have personal liability. Choosing to register a business as a DBA name, actually means that an owner is in actual fact just creating a Sole Proprietorship with a DBA name.
The process for registering a DBA varies from state to state. Usually, businesses need to file the DBA forms with the secretary of state or the county clerk, these costs usually range from between $10 to $100. It is also required from the owner to publish a notice of the DBA in the local newspaper.
The process of filing for a DBA can be achieved by following a three-step process:
The process varies from state to state. There are instances where businesses need to register their DBA with either the state government, the country or the city government. Some states require that the DBA be registered with more than one level of government. Unfortunately, Kansas, New Mexico and South Carolina currently do not allow businesses to file for a DBA.
The next step is for a name search to be conducted. Owners need to be mindful of the fact that the name is not already taken by another business within the state in which the DBA is filed. The name also needs to meet the DBA naming guidelines for the respective state in question.
If the business should require assistance with the naming convention for the business in question, there are three steps to keep in mind. The business should come up with the best brand name for the business in question, follow the naming rules for the business structure for the business in question and finally, check and see if the business name is available.
There are platforms available that assist with the generating of a business name, it is also advisable that the business owner secures domain name as soon as possible. This will ensure that the name is secured and cannot be claimed by another business owner.
It is also advisable, after registering the domain, to consider setting up a professional email account. Various platforms offer free services in this regard.
The final step is to file the DBA with the state or with the country or state clerks, this depends on the location as well as the business structure of the business in question. Several states require that the DBA be registered with more than one level of government. Take for example sole proprietorship, they are required to file at the state and country-level in specific states. While other states might require that the business only files at the country level.
By registering the business as a DBA, Sole Proprietorships are allowed to operate under a different name from the owner’s legal name, this allows for the business to appear as more credible and professional. Owner’s need to realize that DBA’s are rather beneficial in the event where a business would like to introduce a new product or line of business under a different name, but would prefer not to create a legal entity.
Often, there is a misconception that a DBA is a legal entity, however, that is not the reality. DBA’s are classified as a separate legal entity, and therefore are not expected to file separate taxes. For tax purposes, a DBA is regarded as part of a legal entity.
DBA’s allows for formal business structures to create multiple brands, in other words businesses, or lines of business under one LLC or Corporation. It also allows for businesses the flexibility of rebranding an existing LLC or Corporation, instead of having to change the main legal business name entirely. If this is something worth exploring, or an option that would suit your current business situation, then get the process starting for registering a DBA.