Do I Need to File a DBA?

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Do I Need to File a DBA?

A person or a company may want to conduct business under a name which is different from their legal name.

In such cases, this is known as “Doing Business As“, or DBA for short.

The term DBA is used by the majority of states, however, each state has a different technical name. Here are the most common:

  • Assumed Name
  • DBA
  • Doing Business As
  • Fictitious Name
  • Trade Name
  • Trading As

DBA Confusion

Most people are extremely confused when it comes to DBAs.

And most people make a lot of mistakes regarding DBAs, such as filing them incorrectly, and most often, filing them when they are not even needed.

Why is there so much confusion around DBAs?

We feel it’s because of 3 main reasons:

1. Most websites that sell DBA filing services fail to educate their readers or they just don’t care to.

2. There’s a lot of crap on the internet and there’s a handful of websites that just have no idea what they are talking about.

3. And frankly, it takes a lot of work breaking down and explaining DBAs. We’ve taken our best shot in this article, and we hope you find it helpful.

The 1st “Big Mistake” with DBAs

When most people register a DBA they think they “formed” a business and have protected their personal assets from liability, when in fact, they have not.

If someone files a DBA (which is owned by them), by default, they’ve chosen to operate as a Sole Proprietorship and have simply filed a “nickname” for themselves.

A Sole Proprietorship has no separate existence from its owner, so any person choosing to operate a business under their own name (or a DBA owned by them) is automatically a Sole Proprietorship.

Using the “nickname” analogy, let’s say John Smith registers a DBA called “John’s Painting Company”. John thinks he has an actual “company”, but he doesn’t. He has simply created a “nickname” for himself (his Sole Proprietorship).

So if someone sues “John’s Painting Company”, it is actually John Smith himself who is being sued personally. There is no actual “company”. John Smith and his “company” are legally one and the same.

Most people who think the above are usually at the beginning stages of researching how to start a business and they haven’t fully thought about, or understood, the differences in liability protection between a Sole Proprietorship and an LLC. For this reason, we also recommend reading LLC vs Sole Proprietorship.

A DBA “Sits on Top of”

The easiest way to think of a DBA is that it’s a “nickname”.

It’s a nickname that “sits on top of” either a person (like a Sole Proprietorship) or a legal entity (like an LLC or Corporation).

To better help understand this point, a DBA is often referred to as a Fictitious Name, meaning, it’s not a separate legal person or company. It rather “points to”, or represents, an actual person, or an actual company.

Let’s look at two examples of how a DBA “sits on top of” either a person or a company.

1. DBA for a Sole Proprietorship:

Let’s say we have John Smith and he wants to do business as a Sole Proprietorship, but doesn’t want to do business under his name John Smith. Instead, he needs to register a DBA. So he registers the DBA name “John’s Painting Company“.

The DBA “John’s Painting Company” is a nickname that “sits on top of” John Smith.

Said another way, “John Painting Company” and “John Smith” are one and the same.

2. DBA for an LLC:

Let’s say Megan Patterson is concerned about asset protection, so instead of operating under how own name as a Sole Proprietorship, she decides to form an LLC. She forms an LLC called “MP Enterprises LLC“, but she would like do business under the name “Meg’s Flower Shop“. So her LLC registers the DBA name “Meg’s Flower Shop“.

The DBA “Meg’s Flower Shop” is a nickname that “sits on top of “MP Enterprises LLC“.

Said another way, “Meg’s Flower Shop” and “MP Enterprises LLC” are one and the same.

The 2nd Mistake with DBAs

True or false: an LLC has to file a DBA?

Answer: false.

Again, because there is so much confusion (and misinformation) in this industry about DBAs, many people think they have to file a DBA, even after they form an LLC.

While your LLC can file a DBA, it doesn’t have to.

Here’s the deciding factor:

Will your LLC operate and do business under its true and legal name? Or will your LLC operate and do business under a name that is different from what was registered with the Secretary of State?

• If your LLC will operate and do business under its true and legal name, then you don’t need to file a DBA.

For example: You form an LLC called “JDE Real Estate Management LLC” and you plan to operate the business under the name “JDE Real Estate Management LLC“.

By “operate“, we mean, this is the name on your marketing materials, your contracts and agreements, your business cards, your website, etc. Basically, anytime you are dealing with another person/company or advertising/displaying your company to the public, you are using your LLC’s true and legal name.

In this case, you don’t need to file a DBA for your LLC.

• If your LLC will not operate and do business under its true and legal name, but instead, wants to operate and do business under a different name, you will need to file a DBA for your LLC.

For example: You form an LLC called “JDE Real Estate Management LLC“, and you want to operate the business under the name “JDE Management“.

In this case, you will need to file a DBA and register the name “JDE Management” (which will be owned by JDE Real Estate Management LLC).

As another example: You form an LLC called “Christine’s Restaurant LLC“, but you want to operate under the name “Christine’s Restaurant” (without the “LLC”), then you’ll need to file a DBA and register the name “Christine’s Restaurant” (which will be owned by Christine’s Restaurant LLC).

Important: The above example of “Christine’s Restaurant” is not possible in all states. Some states will accept a DBA filed under the same name as an LLC; others will not. Because some DBAs are filed at the county-level (not at the state-level), there are over 900 jurisdictions in which DBAs can be filed in the US and the rules vary widely. For this reason, we cannot tell you if your state or county will allow this. If after reading this entire article, you decide that you want to form an LLC and registered an “identical” DBA name (minus the “LLC”), you’ll need to call your state or county where you’re doing business to make sure your DBA filing will be approved. Thank you for your understanding.

Which should you choose… to DBA or not to DBA?

Unless your LLC really needs to do business under a different legal name than what you registered with the state, then we recommend against registering a DBA and just doing business under the LLC’s full and legal name.

The reason for this recommendation is that DBAs can lead to a lot of hassle, confusion, and extra costs.

For example:

  • The DBA is an extra filing, meaning extra paperwork and extra state fees (although they’re usually not very expensive).
  • Most states require you to renew your DBA, by filing paperwork and paying a state or county fee every year (or every few years).
  • Many states require you to publish a “public notice” of your DBA registration in the newspaper. This can be expensive, depending on what state and county your DBA will be registered.
  • If your state does not handle DBA filings, but instead they are handled at the county-level, you need to register your DBA in each county where you will do business. This could mean multiple filing fees, multiple newspaper publication fees, and multiple annual/renewal fees.
  • Having a DBA can often confuse the business owner when it comes to obtaining an EIN, opening an LLC bank account, and filing taxes, thus leading to a lot of mistakes in how things are setup, registered, and organized.

Having said all that, there are still a few reasons why someone with an LLC would still want to register a DBA. The examples below are not “all-inclusive” (these aren’t all the reasons why), but these are the most common reasons that we run across.

Dropping the “LLC” – When a business owner forms an LLC, but wants to operate and do business under the identical name (minus the “LLC”), then filing a DBA without the “LLC” in the name will be needed.

Remember: There are 900 jurisdictions in which DBAs can be filed. Some states/counties allow LLCs and DBAs to exist with the “identical” name; others do not. You’ll need to call your state or county where you’re doing business to make sure your DBA filing with an “identical name” will be approved.

Multiple Businesses – It can sometimes occur that a business owner forms 1 LLC, but then runs multiple businesses (sometimes called “micro businesses”) all under that 1 “LLC umbrella”. In this example, you can register a DBA for each of the businesses. However, if your businesses begin to grow (or your businesses are exposed to liability), it may be a better idea to form a separate LLC for each business for better asset protection.

Multiple Stores – Like the example above, some business owners run a few stores. They may have 1 LLC which owns all the locations, but they want each store name (and each store sign) to be different. In this example, you’d register a DBA for each store. However, just like the above example, it may be wise to form separate LLCs instead of operating all your stores under one LLC (for better asset protection).

Franchise Owners – When a business owner buys into a franchise, the franchisor (via the franchise agreement) grants certain trademark name rights to the franchisee. And to protect their personal assets, it’s common that franchisees will set up an LLC. However, they need to do business under the name of the franchise. So for example, if you bought into the Dunkin’ Donuts franchise, you would form an LLC first (for example, “TRE Holdings LLC“), then you would register a DBA with your state (or county) called “Dunkin’ Donuts”. Keep in mind though, the only reason you can use the name “Dunkin’ Donuts” is because you have a right to do so via your franchise agreement. On the other hand, if you register a DBA that infringes upon a company’s trademark rights, they have the right to sue you (even though the state approved your DBA filing).

How to Register a DBA

As mentioned earlier, there over 900 jurisdictions in which a DBA can be registered.

For that reason (and also because we don’t focus on DBAs; we focus on LLCs) we haven’t included links to all 900 jurisdictions. That would be nuts!

If you want to file your DBA yourself, we first recommend you call the Secretary of State’s Office (in the state where your LLC will be registered) and asking them if DBAs are filed at the state-level or at the county-level.

You can find your Secretary of State’s contact information and website address here:
https://www.llcuniversity.com/50-secretary-of-state-sos-business-entity-search/

If DBAs are handled at the state-level, just ask the representative where you can find the filing forms and instructions.

If DBAs are handled at the county-level, then you’ll need to call your county clerk’s office and ask them for their filing forms and instructions.

Matt Horwitz
Founder & Educator, LLC University®
Forming an LLC shouldn't be so complicated. Our step-by-step guide will make the process a breeze – and no complex legal jargon! LLC University® teaches people how to form an LLC for free in all 50 states. We hope you find our free guides and resources helpful in your business journey.
Disclaimer: Nothing on this page shall be interpreted as legal or tax advice. Rules and regulations vary by location. They also change over time and are specific to your situation. Furthermore, this comment section is provided so people can share their thoughts and experience. Please consult a licensed professional if you have legal or tax questions.

5 Comments

  1. Andreea Brisset February 17, 2020

    I have a Sole Proprietorship which has a different name than my own name do I need a DBA?

    reply
    • Matt Horwitz February 17, 2020

      Hi Andreea, we don’t cover Sole Proprietorships in great detail, so you’ll need to check with the state’s requirements where you are transacting business. Each state has different rules as to what names a Sole Proprietor can use. Having said that, if the Sole Proprietorship name is very different than your own name, you likely need a DBA in order to operate under that name. Hope that helps.

      reply
  2. Daniel February 18, 2020

    Hi Matt, thank you for your great service! I applied for an LLC, but the name that I chose is the same name as the game that I want to publish.
    For example *@!, LLC is the name of the company and *@! is the name of the game. Do I have to apply for a DBA to publish the name of my game as *@!. I’m also wondering because later on down the road I may want to create merchandise with the logo *@! for the game. Thank you so much!

    reply
    • Matt Horwitz February 18, 2020

      You’re very welcome Daniel! A DBA is used by an LLC when the LLC wants to do business under a name that is different than its true and legal name. In this case, the game and the merchandise are products, and the name of a product (or the words listed on a product) don’t require a DBA. Hope that helps.

      reply
  3. LJ February 20, 2020

    Hi Matt,
    This is super super helpful and the most clear advise I’ve seen after frustrating days of research and confusing information from ‘specialists’.
    I am setting up an ecommerce business operating from New York with a Delaware LLC and the name of my LLC is different from my store/brand name. Can I still legally operate and sell products online without a DBA or do I have to get a DBA? If a DBA is required (rather than preferred), do I get the DBA on a county level in DE or do I get it in NY? Thank you!

    reply

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