How to Transfer a DBA to a New Entity in Texas

By Terry Masters

Texas law allows businesses to operate under an assumed name, also known as a "doing business as" or DBA, for any legitimate business reason, as long as the name is unique and properly registered with an official state entity. DBAs are registered at the state or county level in Texas, depending on the type of entity that will be using the name and where in the state the entity will be doing business. By law, transferring the DBA to a new entity requires an authorized party to file a new assumed name certificate with the appropriate state and local offices within 60 days of the transfer, updating the business ownership information.

Texas law allows businesses to operate under an assumed name, also known as a "doing business as" or DBA, for any legitimate business reason, as long as the name is unique and properly registered with an official state entity. DBAs are registered at the state or county level in Texas, depending on the type of entity that will be using the name and where in the state the entity will be doing business. By law, transferring the DBA to a new entity requires an authorized party to file a new assumed name certificate with the appropriate state and local offices within 60 days of the transfer, updating the business ownership information.

Governing Law

Chapter 71 of the Texas Business & Commercial Code allows businesses operating within the state to use a business name that is different from the registered legal name, provided the assumed name is also registered with the state. The law requires sole proprietorships and general partnerships to file an assumed name certificate with the county clerk's office in each county where the business operates. Corporations, limited liability companies, limited partnerships, limited liability partnerships, professional associations and entities that are organized under the laws of a different state must file assumed name certificates with the Texas secretary of state's office and each county clerk's office where they operates.

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Transferring DBAs

A DBA filing is good for ten years. If a business owner sells the business or wants to relinquish the use of the DBA to another entity during that time, Texas law requires an authorized party to file a new assumed name certificate with the appropriate state and local offices within 60 days of the change. There is no procedure to amend a certificate. The law treats changes in business ownership as a material change in information that requires the filing of a new certificate. A person from either side of the transfer can submit the new certificate. The person submitting it must sign the official statement at the bottom of the certificate form that attests to his right and authority to make the change.

County Registration

If the new entity that will be using the DBA is a sole proprietorship or a general partnership, it must file a new assumed name certificate with the county clerk's office in each county where the business plans to operate. If the county already has a certificate on file from the prior entity, the new certificate will replace it. If the new entity will be operating in counties where the original entity never filed a DBA, the new entity will simply be the first entity to submit the certificate. All of the counties in Texas maintain a website where you can access the page for the county clerk's office. The county clerk's page will provide a downloadable, fill-in-the-blanks assumed name certificate and instructions for filing it. There is a fee for filing the certificate, which differs by county. For example, as of 2012, Bell County charges $7, while Montgomery County charges $8.50 plus $.50 for each additional owner listed on the certificate.

State Registration

If the new entity is an independent entity that had to submit formation papers with the state, such as a corporation or limited liability company, it must file a new assumed name certificate with each affected county clerk's office and also submit a new assumed name certificate with the secretary of state's office. There are two ways to submit a certificate to the Texas secretary of state. You can download Form 503 from the forms and fees section of the secretary's website and file the certificate by mail, or you can file the certificate online using SOSDirect, the state's electronic filing system. As of 2012, the state charges $25 for this filing.

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Can I Operate a Sole Proprietorship Without a DBA in Texas?

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How to Set Up a DBA in Galveston County, Texas

Businesses operating with a name which contains any words except the true legal name of the owner are usually required to file a DBA -- “doing business as” -- statement in Texas. These statements are also referred to as “fictitious business name statements” or, as is the case in Texas, “assumed business name statements.” The Texas Business and Commerce Code section 71.002 (2) contains the exclusion criteria for an assumed name.

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.

How to Transfer a DBA to Another Person

A DBA -- short for "doing business as" -- is a trade name that differs from your personal name. When you first create a business, its legal name defaults to the person or entity that owns it. In order to choose a different name, you must register a new alternative name by filling out a DBA form. A DBA is a valuable business asset that can be transferred to another party.

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