Filing for a DBA? Still uncertain of something? When it comes to DBA’s, there are a few things you need to know before you register. TRUiC helps us list the top ten FAQ’s received to make the process even easier.
- What is the difference between an assumed name and a DBA?
Nothing. A DBA (doing business as) is also referred to as a trade name or a fictitious name.
- What does a DBA do for your business?
A DBA permits your business to operate under a name other than the owner’s legal name, or the business’s registered name. A DBA allows you to create a new business name, without registering for an LLC, so that the business’s name will not become a long list of surnames as partners join.
- Read more for a further explanation (with examples).
- Is it necessary to have a DBA if I already have an LLC/Corporation name?
No. Filing for a DBA is only necessary when the business wants to operate under a name that is not their registered name. Remember, a DBA does not create an official business formation. It is only a statement of a registered name.
- What is the advantage of having a DBA?
DBA’s can be useful for a few reasons. If you are operating under a sole proprietorship/partnership, having a DBA means managing your business more simply- particularly in banking. For example, if you are “Jane Mohammed” with a DBA of “Jane’s Jams” you can now deposit and collect money from your business’s bank account. Additionally, for established LLCs and Corporations, a DBA is an excellent method to tap into new markets for a product/service line launch. Additionally, filing for a DBA is more cost-effective than issuing a legal name change or registering for a LLC.
- What is a simple example of a DBA?
A registered LLC of “Puffy Pens” is interested in breaking into a different market with their new product line of pencils. The company does not wish to register a separate LLC for it. Filing for a DBA of “Puffy Pencils” will allow the company to expand its market reach and re-brand the image.
- Tip: DBA’s can be acronyms of the current name, shortened versions of it, or a new name altogether.
- Should I choose a DBA or an LLC?
This decision depends on your business’s financial position, specific goals that you have set and of course, what your business needs to flourish. Certainly, if you are managing a sole proprietorship/partnership a DBA is less complicated and more cost-effective. That being said, registering for an LLC comes with certain valuable benefits such as asset protection (whereas a DBA does not).
- How much will a DBA cost me?
The fees differ according to state. A DBA usually costs between $10-$100.
- Does a DBA require filing taxes?
Conveniently enough, you do not need to file taxes for your DBA separately. A DBA is not considered to be a legal entity therefore there is no need. The legal entity that the DBA is under will be responsible for all tax payments and processes.
- Is a separate bank account for your DBA essential?
No, it is not. However, operating your business’s finances might get a bit messy without its own bank account. It is a good idea to have an account if your DBA is a sole proprietorship to give your business a more professional image.
- How do I file for a DBA?
The process varies depending on the state. However, as a general rule, the state will require you to file with the county clerk or secretary of state for a fee between $10-$100. It is possible that you may need to publish a notice of your DBA in the local newspaper as well. Fortunately, there are filing services to assist you with getting your DBA.