Step 1) Select Your State
DBA guidelines and laws vary by state. The best place to begin is with our state DBA guides.
Step 2) Do a DBA Name Search
The first thing you will want to do is make sure your name isn't taken by -- or too similar to -- another registered business in your state.
Next, a quick search on the U.S. Trademark Electronic Search System will tell you whether someone else has already trademarked your name.
If you need extra guidance with choosing a brand name for your business, read our naming guide.
Finally, you want to make sure there’s a web domain available for your DBA.
One of the most important things you should know about DBAs is that they are not a business entity. One commonly asked question is “What is the difference between an LLC and DBA?” This question comes up because we often don’t realize a DBA is just a name.
To learn more about how to use a DBA for your particular business entity type, read our “DBA for Small Business” article.
Do you have to file taxes for a DBA?
A DBA isn’t a business entity. The income or loss from a DBA is factored into your total tax liability for the business. You do not have to file a tax return specifically for the DBA.
For instance, if your DBA doesn’t do well and has a loss, those numbers will be calculated within the tax liability for your LLC.
Does my DBA need an EIN?
A DBA doesn’t need an EIN because a DBA isn’t a business entity; a DBA is essentially just a name for your business. Needing an EIN is dependent on the type of business entity you are operating.
To learn more about EIN requirements, read this article by our friends at TRUiC.
Can I get a Bank Account for a DBA?
You can and should get a bank account for your DBA. Brand awareness is a big deal; it’s always good to accept payment with the business name that customers expect to see. A separate bank account will also help with bookkeeping and accounting.
Your bank will most likely need your DBA paperwork and EIN documentation from the main business entity when you open your account. Some banks might also require your business formation documents as well. To save time, call ahead and ask your bank what you should bring.
For more information on business banking, read our reviews.
Right, let’s dig into four advantages which will help explain why someone or a brand would choose to file under a different name.
- Adhering to Business & Taxing Formalities: A DBA can help ensure your business entity remains compliant, for example helping an LLC keep its limited liability status by showing a distinct separation from its members. You want to always ensure that each business entity is separate and readily identifiable. This will help keep you out of trouble in the long run.
- Anonymity: It’s the easiest way to register a name, especially for sole proprietors/freelancers who don’t want to associate their personal name with the brand/company, or at least keep it apart from marketing material and so forth. Not everyone wants to share their identity.
- Efficiency: A DBA allows LLCs and Corporations to operate multiple businesses without having to form a business entity for each one which cuts down on paperwork, expenses, and logistics. This is particularly true in e-commerce and many small businesses. Imagine having to form a different company for each clothing category on an e-commerce page. You may also be surprised to learn that many law practices, insurance companies and other professional services are, in fact registered DBA.
- A Name As An Attention Grabber: Most consumers associate a name with a product. Some examples are Coca Cola, Macy’s, and Progressive Insurance. Unless you have a truly unique name that relates to your product, you're generally better off having a brand name that consumers can associate with your product which gives way to slogans, logos and other marketing ideas. This, in turn, can dramatically increase the value of branding. So, instead of selling men’s watches under “Emily’s Jewelry LLC”, a DBA could be filed for “ManWatch” or something creative.
Okay, nothing is all peaches and cream. There are a couple downsides to DBA, but they weren’t designed to be perfect or ideal for everyone interested in filing one. Be sure to consult with a lawyer licensed in your state before making a business entity selection and to ‘do your homework’ about your options before choosing which business entity is best for you professional needs and goals.
- A DBA gives no legal protection for you as an individual. If your DBA is sued, you'll be sued as an individual doing business. Conversely, for example, an LLC is a limited liability company. Typically, if an LLC is sued, the company is being sued, not the owners/managers personally. Thus, theoretically, if you form an LLC, you may be able to limit your personal liability in the event of a lawsuit. Of course, lawyers often have ways to get around those too.
- The process of maintaining a DBA can be a hassle. A DBA, like any other business, comes with its many responsibilities. Some examples are the continual updating of registrations every few years, keeping abreast of changes in the law and registration requirements in your State and County, sometimes this means every single county in which you do business. It can substantially differ from state to state so if you don’t work with an incorporation provider or have a lawyer, which is recommended, you really need to make some calls to local county clerk’s offices and secretaries of state.
- The Administration. Every business has these but there are some issues with administering a DBA. They range from little hassles that arise from DBA confusion, for example setting up a bank account, to when you need to execute legal documents but can’t do so under the DBA name, to bigger headaches. But again, this is true of ALL types of legal business entities.
- The Tax Aspect. Each DBA is required to prepare a federal and state tax return for their business. It's recommended that you consult with a licensed accountant as to whether a DBA is the right choice for you and what such a designation means for you tax-wise.
A DBA is appropriate for pretty much any recognized or registered business entity under the law, but the DBA choice for a business entity tends to be more attractive for small business owners. These are just a few examples in which DBAs are regularly used for business designations.
- Sole Proprietors & Partnerships: to conduct business under anything other than your real name, you’ll need to register a DBA which isn't always required if the name of the products and services provided are an acceptable combination of a real human name and a description of the service. It's always best to check with county clerk’s office to confirm whether a DBA designation and registration is needed for your business.
- Corporations or LLCs that want to provide more services under other names: if your business is already set up as a registered corporation or LLC, and you want to do business under a name other than your existing corporation or LLC name, you’ll need to register a DBA.
This part’s easy because there are only a certain amount of “right times” to chat about. Let’s see:
- Banks may require a DBA to open a business bank account, this is typically the case for general partnerships and sole proprietors. In turn, they may ask for an EIN, so it’s all about compliance and keeping tabs on financial activity.
- Sometimes freelancers of many various kinds will be asked for a DBA by clients. It’s more common in this type of context that they ask you be represented by a business entity like an LLC or corporation vs. purely independent. It happens.
- DBAs can be used to allow brands to change their name to reflect certain circumstances, like new areas, new seasons, different offerings, etc. For example, let’s say you own a landscaping company named “Darby’s Landscaping LLC” but then decide to offer indoor maid service in the city, you could file a DBA called “Darby’s Maid Service” to reflect that.
- Maybe your brand wants to run multiple websites or perhaps a separate digital platform for different services – so let’s say your LLC makes and sells men’s pocket squares, but you want to have a separate website to sell women’s full-size scarves.
Absolutely, Startup Savant has a TON to offer just about anyone interested in learning more about the process and getting help from trusted providers.
- State Guides: To be prudent, bookmark this page so you can explore options state by state.
- Services Guides: Start with our free, “Top DBA Filing Services” guide.
This content on Filing a DBA is not a legal document or legal advice. It is for informational purposes only and the information is subject to change over time. For specific questions and concerns regarding how to file a DBA, please consult an accredited attorney or a qualified professional.