Advantages of Filing for a DBA

By Tom Speranza, J.D.

Advantages of Filing for a DBA

By Tom Speranza, J.D.

A DBA, which stands for "doing business as," is a name under which a business operates that is different than its official legal name. State laws call these assumed business identities "fictitious names." If your business uses a fictitious name, you may be subject to laws that impose registration requirements and place conditions on your use of the name.

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What Constitutes a DBA

For a sole proprietorship or general partnership, a fictitious name is anything other than the legal names of the individual owners. For a corporation, limited liability company (LLC), or limited partnership (LP), a fictitious name is anything other than its official entity name registered with the state in its articles of incorporation or organization. However, in most states, simply omitting the entity designator "Inc.," "LLC," or "LP" when you do business does not count as operating under a DBA.

Reasons to Register a DBA

There are several advantages to registering your fictitious name in the states where you do business.

Legal Compliance

The first advantage is legal compliance. Most states require a business using a DBA to register their fictitious name with the state and provide some basic information about the enterprise:

  • The date on which they first used the fictitious name
  • Legal names of the owners or, in the case of a corporation, LLC or LP, the actual registered name of the entity
  • General nature of the business (the products and services it sells)
  • Address and other contact information for the business
  • Name and contact information for any agent authorized to file amendments to the fictitious name registration

Business owners typically file fictitious names in the same office where new business entities form which in most states is the Department of State or the Office of the Secretary of State. The filing fees are usually much lower than those charged for forming a corporation or LLC.

States have imposed DBA registration requirements primarily for consumer protection purposes. DBA laws ensure that the customers of a business using a fictitious name can find out who owns the business so that they can research its reputation and contact the business—or even file a lawsuit against it—if they encounter problems with its products or services. The registrations also make it easier for the state and municipalities to enforce their business licensing and tax laws.

Trademark Rights

Although a fictitious name registration by itself does not give your business any exclusive rights in the name or the ability to stop other businesses from using the same or a similar name, it can help your business create so-called common law trademark rights in the name. In the United States, businesses can establish trademark rights by using a name in commerce and common law trademark rights can eventually prevent other businesses from subsequently adopting a confusingly similar name in the geographic area where you do business.

Registering your DBA informs the world that your business has adopted the name as of a specific date in connection with certain products and services and may deter other businesses from later choosing the same name if they search the state's database. The filing, combined with your business's actual use of the name in the marketplace, builds goodwill in the name and is strong evidence of your priority in the name.

Multiple Business Identities

If your business markets different products or lines of business to different categories of customers, fictitious names can be an easy way to establish a distinct business identity for each market segment without the trouble and expense of forming entirely new entities or subsidiaries. For example, if your landscaping business services both residential and commercial customers and you want to create a different brand and marketing approach for each part of the business, fictitious name registrations can keep you compliant with state law while also providing evidence of your priority in the trademarks.

If your business already uses a DBA or wants to begin using one, consider the many advantages of doing so. If you believe your business can benefit from using one, you can visit your Secretary of State's website in your state to find out additional information on how to properly obtain a DBA.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.