The Meaning of DBA

By Lee Roberts

DBA is an abbreviation for the term “doing business as,” and it refers to the name that a business uses. For example, if Joe Gomes wants to name his plumbing business "Speedy Plumbing," that name would be his DBA. Other terms for DBA include "fictitious name," "assumed name," and "trade name." Laws vary among jurisdictions, and you must learn the laws in your area. In general, the goals of DBA laws are to reduce confusion and increase transparency about the purposes and ownership of businesses.

DBA Statements

Jurisdictions that require businesses to make a statement about their intent to use a DBA typically require the owner to fill out a form. Often this takes place at the county level. You may also need to pay a fee. You must usually identify your company's legal name and the proposed DBA name. In our earlier example, the legal name of the plumbing business would be the sole proprietor's name, Joe Gomes, and the DBA name would be Speedy Plumbing. In some areas, including counties in Illinois and California, you must provide an address and certify that you intend to do business from that location. You must also typically publish your DBA in a local newspaper for a period of time.

Sole Proprietors and Partnerships

Sole proprietors and partnerships commonly take advantage of DBAs because operating under an assumed name provides them with more options to market their business and to protect their personal privacy. By using a DBA, the owner can convey the type of business he's in: as a business name, "Speedy Plumbing" is more informative than "Joe Gomes."

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Corporations and LLCs

Corporations and LLCs choose a descriptive legal name at the time their business is created and thus are less likely to need a DBA than other businesses. However, there are still some situations in which a DBA is necessary. For example, a corporation may need to use a DBA when doing business in another state in which another company is already using the corporation's legal name. A representative of the corporation must register the company's intent to use a DBA.

Not Permanent, Not Exclusive

Generally, when you register a DBA, you don't get to use the name on a permanent or indefinite basis. Typically you must renew your registration every few years, according to your local laws. And it may surprise you to learn that if you register a DBA, it will not prevent other companies in other jurisdictions from using the same or similar names for their businesses. In fact, although most counties will not allow identical DBAs in the same jurisdiction, some will. Some business owners therefore take the extra step of applying for trademark protection of their business name.

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Do General Partnerships Require a DBA?

DBA, or doing business as, occurs when a business operates under a name other than its legal name. A general partnership can always choose to use its legal name, which is the combination of the names of the partners; a DBA is not required. If the partnership chooses to operate using a name other than its legal name, however, many states require that the business register this name.

Reasons for Establishing a DBA

Not everyone who starts a business chooses to incorporate or set up a limited liability company, or LLC. Certain business owners can be sued personally for their acts, and the limited liability of LLCs and corporations doesn't help all entrepreneurs. In businesses where the owner expects to be doing all the work, such as sole proprietorships where there are no partners, co-owners or employees, an assumed name, or DBA, for "doing business as") may be appropriate.

How Important Is a DBA?

A trade name, which is the DBA, or doing business as, name, may well be a business's most valuable asset. Through its DBA, a business helps the public form a positive association between the name and the business's services or products. A DBA can create legal and economic problems for a business if it is too similar to a trade name of another business, while registering a DBA can help protect a business trade name against misuse by other businesses.

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