If you’ve decided to Do Business As (DBA) a name other than the one that your sole proprietorship, limited liability company (LLC), or corporation is officially registered under, you need to file DBA paperwork to the appropriate state. Filing for a DBA is extremely useful if you want to reserve a business name but don’t want to create an entirely new LLC or corporation. It is also extremely affordable when compared to those options. In the case of a sole proprietorship, some banks require that you submit a DBA to open a bank account. Sure, that’s no problem, assuming you know how to go about setting up your DBA. If you need to know how to set up a DBA, this article will break down what you need to know, and which actions you will need to take!
Considerations When Filing a DBA
Before you actually go ahead and file a DBA for your sole proprietorship, LLC, or corporation, you’ll need to ensure that you consider these rules, which can vary from state to state. Depending on the state, a corporation or LLC may need to provide proof that the business is in good standing. In this instance, the owner will need to file a Certificate of Good Standing along with the DBA application. If you need to prove your standing, you can request the certificate from the Secretary of State in your registered state or hire a business to do this on your behalf. You’ll also want to be mindful of the name that you choose when filing for a DBA as you cannot use a name that includes Inc. or Corp. if the business is not actually incorporated. To that end, you’ll also need to ensure that the name is not offensive in nature or being used by another company as a DBA or registered business name. In some states, once your name is approved, you’ll have to announce that name. Although, the state (or country) in which you file the DBA will let you know if this is required or not. You can do this by simply placing an ad in your local paper.
Filing For a DBA Varies By State
Of course, each state in the United States will have its own requirements and fees associated with filing a DBA. Not only that, but they might each have their own accepted payment methods. While some may allow you to pay by debit or credit, you may have to pay by money order or cashier’s check. Similarly, some states may allow you to file online whereas others require that you mail-in notarized documents. In general, you’ll need to do the following to file a DBA:
- Verify that the name is not already in use in that state (here is an example of a business name search tool for the state of California)
- File a DBA Form, Fictitious Business Name Statement, or similar form at the county clerk’s office; your local county clerk’s office will have the required forms, so contact them about accessing these documents
- Note that each state will have its own unique requirements about timing, how to pay, and fees, so be sure to contact your county clerk’s office immediately upon starting a new business; some states require that you file a DBA no matter what and within 40 days of starting a new business
- Publish your new name within 30 days of filing the paperwork; the published statement must run once a week for four consecutive weeks in a local publication where you do business
- Pay the required fees
- Follow up in five years before the DBA expires
Depending on the state in which you file, this process usually takes 1 - 4 weeks from start to finish. Once the paperwork is submitted, the state needs to verify that the name is available in their database and that the name isn’t too close to another business' name. Verifying this first will make the process move a lot faster.
Considerations Once Your DBA is Approved
Once you have completed the necessary requirements for filing a DBA and your DBA is approved, you can then consider applying for an employer identification number (EIN) for tax purposes. This allows you to file taxes using a number that is unique to your business so you don’t have to file using your social security number (SSN). This step helps to keep your personal and business financials and taxes separate. Additionally, know that you’ll have to renew your DBA ever five years or so, depending on the state. So don’t forget to renew your DBA otherwise another business could claim your business name after it has expired; additionally, it is illegal to operate your business under an expired DBA. Any changes that you make to your business, such as if the business is no longer incorporated or if the business is relocated, will require that you revise your DBA. So be mindful of any big changes that your company might take on or plan to take on. If these changes do go through, it will be your responsibility to contact the necessary state bodies to modify the DBA or file a new one.
File Your DBA
Not filing a DBA or letting your DBA expire and then continuing to operate under that name has major ramifications. In general, businesses will be fined if this occurs as the state will assume that you are doing it under false pretenses. If you are not sure whether or not you need to file a DBA, you can visit your state’s website, your county clerk’s office, or a website like the United States’ Small Business Administration. NewLLC also has step-by-step guides that walk you through the necessary requirements in order to start a business as a new LLC.