When Do You Need to Register a DBA for an S-Corp?

By Terry Masters

Under ordinary circumstances, registering a "doing business as" name, or DBA, for your S corporation is optional. State laws require a corporation to transact business under its legal name, but allow it to use a registered business alias for any legitimate business purpose. Your S corporation may be required to use a DBA, also known as a trade name or fictitious business name, if its name duplicates another business name that is already in use in a state.

Under ordinary circumstances, registering a "doing business as" name, or DBA, for your S corporation is optional. State laws require a corporation to transact business under its legal name, but allow it to use a registered business alias for any legitimate business purpose. Your S corporation may be required to use a DBA, also known as a trade name or fictitious business name, if its name duplicates another business name that is already in use in a state.

State-Based Business Names

When you formed your S corporation, the state in which you incorporated likely checked the name you wanted to use for the new venture to ensure it wasn't already in use by another company operating within the state's territory. Every state has its own business code with rules for the formation and operation of corporations, but they all require corporations to transact business under the legal name listed in their articles of incorporation. This ensures that the public can identify the entity behind commercial transactions and businesses can protect the reputation established in the marketplace under a specific name.

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Ordinary Uses for DBAs

S corporations can use an alias for business purposes within most states. As long as the name is properly registered within the state, the option to use one or more DBAs within the jurisdiction is usually available. Some of the optional reasons why an S corporation might choose to use a DBA in a particular market is to build a brand name that is not the legal name of the corporation, distinguish a division, develop a new product category that the corporation doesn't want customers to easily associate with the corporation's legal name, and to make it easier to spin off or sell a division or product line without losing the rights to the corporation's legal name.

Expanding Into Other States

The only time your S corporation may be required to use a DBA is if you want to expand into a state where another company is already using the company's legal name. Since incorporation is state-based, it's possible that another corporation was formed in a different state with the same or a confusingly similar name. To obtain permission from the new state to transact business within it's boundaries, the S corporation may be required to register a DBA. In this instance, the company may only be allowed to refer to itself within that particular state by its DBA.

Protecting a Trademarked Name

If your S corporation's legal name is federally trademarked, you have the exclusive right to use the mark within the entire United States. Finding out that another corporation is using the mark within the state your S corporation wants to expand into would be grounds for you to demand the infringing company stop using the name. In that instance, you could expand into the new state without resorting to the use of a DBA.

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Advantages & Disadvantages of Filing for a Fictitious Business Name

References

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Can an LLC Have More Than One DBA?

Running a successful business requires a keen understanding of the marketplace. In the initial stages of operations, this foresight is important for determining how to structure a company and the names it will use in conducting transactions with the public. A limited liability company allows owners to enjoy the "pass-through" tax advantages of partnerships as well as avoiding personal liability for the business's debts. While state law requires that LLCs operate under the legal name contained in their Articles of Organization, sometimes this name is not desirable from a branding perspective, particularly if the company will market very different products or services. In that case, the LLC can register one or more "doing business as" names with the state.

Cancelling a DBA

A "doing business as" name, also known as a trade name and a fictitious business name, is the name under which a business operates that may be different from its original, official name. A company may use DBAs to conduct business under a different name for various reasons. For example, a foreign company may use a DBA in a specific location because its creation name is being used by another business in the same area. When a business no longer needs its DBA name, it can cancel the name registration with the local government agency that handles DBA registrations.

Can a DBA Company Own an LLC?

You can own an LLC if you are a sole proprietor or partnership using a DBA, or "doing business as." A DBA is not an official company structure, but an identity -- usually called a "fictitious name" or "trade name" -- for business and/or recognition purposes. Your state will recognize your DBA identity, but the legal structure will typically be a single owner business or a partnership. Since states make the rules for DBA recognition, check with your jurisdiction to learn the legal way to own the LLC.

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