Finally, your dream of starting a business in Illinois is about to come true! You’re now at the stage of planning and you’re probably taking note of the legal documents and processes that you need to prepare for as well. There are actually so many things that you have to do first before you can officially start your Illinois small business.
From incorporating your Illinois startup, obtaining required permits and licenses, understanding Illinois tax regulations and responsibilities and complying with supplementary state requirements – all these must be completed first before you are allowed by the state of Illinois to start operating.
If you think that’s it, there’s also another important concept that you need to understand – the “Doing Business As” or DBA. Although it’s not really a mandatory requirement, it’s a highly important business process that entrepreneurs should understand before starting their businesses.
To give you a better idea, this article will discuss what a DBA is, why you need to file one and how do you actually go about with the process. If you’re ready to learn then let’s keep the ball rolling!
An Illinois DBA or assumed business name, trade name and fictitious name is a business name which is different from your official registered name. By filing an Illinois DBA, you’ll be allowed in the state of Illinois to use a business name other than what you’re currently using.
In some instances, the legal name of a business automatically defaults to name of the owners or the entity, you can’t change this unless you decide to rename it by filing an Illinois DBA.
If you want to change your business name or use an alternative name for a new venture, you need to determine as early as now if you need a DBA because your legal name is required in all government forms and applications such as in your tax IDs and even in licenses and permits.
An Illinois DBA will also enable you to do the following things: transact using your chosen trade name and accept checks, money and other forms of payment under your DBA name. After you’ve filed an Illinois DBA, you have to initiate the publication of fictitious business name with your complete personal name in all official publications for circulation.
This process must be done within 30 days from filing. For it to be valid, your DBA name must appear once every week for 4 succeeding weeks. 30 days after the last publishing date, you can file an affidavit of publication to your local county clerk’s office or state government.
Business owners who run their business under sole proprietorship are required by law to use their personal name as their business name. There is nothing you can do about this because this is a mandatory requirement in the state of Illinois.
If you want to avoid this and use a proper business name, you can file an Illinois DBA. This will give you the freedom to use any business name according to your own choice.
For businesses running under sole proprietorship, general partnership and freelancers who offer independent service, you need to prepare for an Illinois DBA to make sure that you get signed on a working contract.
An Illinois DBA is a safety net for both client and contractor. If you encounter this in the future, don’t get upset or frustrated because this is a normal practice in the industry. To immediately close a working contract with a client or company, make sure to have a DBA.
To be able to use a business name while creating a new business or website which is connected to your mother business, you can file an Illinois DBA without having to form a new entity. This will spare you the cost of incorporating every venture while being able to use an official name.
This is not a new process in the field, this has been done for many, many years and there’s no harm in doing so. Once your new business or website takes off, you can always incorporate it and make everything legal.
If you don’t want to incorporate for reasons like cost and lack of assurance, you can file an Illinois DBA to use an official business name for your startup. You can test the waters first and see if your business thrives, if it does, you can always incorporate your Illinois small business to make it an entity and gain full protection from the state of Illinois.
The majority of banks in the U.S. require business owners operating under sole proprietorship to secure a DBA to get approved for a business bank account. Upon application bring your Illinois DBA so you can open a bank account smoothly.
Failure to have an Illinois DBA will result in the rejection of your application. In some cases, you will even find it difficult to transact with your bank so if you want to conduct business without any glitch follow this rule – it’s basic.
The first step to file your Illinois DBA is to get a copy of the Illinois registration form. You can obtain this from the local county clerk’s office where you intend to do business or the website of Illinois’ Secretary of State. Prepare a filing fee of $25.
The next step is to fill-out the registration form with the accurate information. Before doing so, make sure to read the instructions carefully to avoid mistakes when filling-out the form. Below are some of the most basic information points that you need to prepare:
Once you’re done filling-out the form, recheck your entries and change those that need to be changed.
After verifying your DBA registration form, make sure to have it notarized before submitting it. You can mail the form which you can find at the bottom part of the DBA form. Also, enclose a filing fee with your form. Once you’re done with all these, all you need to do is wait until your DBA gets approved.
While filing an Illinois DBA, make sure that there’s a need to file one. An Illinois DBA can really be helpful, however, it does not give you the same advantages as formally incorporating your Illinois small business.
An Illinois DBA cannot protect you and your business from liabilities. With this, you are opening your business to legal suits, credit investigations and other forms of issues and problems.
Aside from this, you will not be able to trademark your business name so anyone can use it in any state. These are just some of the problems that you’ll encounter if you use a DBA. To better understand your options, you can talk to a lawyer about this.
This article is an informational guide and as such should only be used as a reference when filing an IL DBA, and it should not be used as legal advice. Your lawyer is still the best person to talk to if you want more details on the legalities of filing a ‘Doing Business As’ in Illinois or bringing a business idea to life in general.