Doing Business As? What You Need to Know About DBA Status

When running your own business it is easy to get overwhelmed with the number of documents and other legal work that you are responsible for. One of the most common documents that many business owners need is called a fictitious name, a DBA, or “Doing Business As.” This legal document is also misunderstood by many people, which can result in failing to file a DBA when it is needed.

What Is a DBA?

A DBA is a document that states that one is conducting business under a separate name. The most common example of this is when an individual operates a sole proprietorship under a name that is not their own. For example, someone named Mike Smith may own a computer repair shop called “Friendly Computer Repair.” In this case, Mr. Smith would have to file a DBA for that name.

Why are DBAs Required?

DBAs were originally developed to help protect consumers from dishonest and disreputable business owners. Requiring a DBA requires the individual (or, when applicable, an entity) to publicize that it conducts business under a different name thereby enabling consumers to know with exactly whom they are actually doing business.

When are DBAs Required?

Other than an individual conducting business under a fictitious name, a business may sometimes operate under multiple names. In such cases they will need to have a DBA filed for each name used. For example, if a business’s legal name is “Green Lawn Care,” they may need a DBA if they also operate off of their website, Ordinarily, a business does not need to file a DBA if the owner’s full name is a part of the business name such as “Tom Smith Woodworking.”

What are the Benefits of a DBA?

There are a variety of benefits that a business owner can achieve from filing for a DBA including the following:

  • Simplicity – For small businesses, filing for a DBA is the easiest way to get your business started.
  • Affordable – DBAs are very affordable, which helps make it possible for anyone to start a business.
  • Multiple Names – There are many times when it is necessary to operate under a variety of different business names, and DBAs make this possible.
  • Reduced Paperwork – By operating one business under multiple names you only have to file taxes once, make contracts once, and many other things. This can dramatically reduce your paperwork and other activities.

Warning:  No Limited Liability

One thing that a DBA will not do for you is limit your personal liability.  In order to do that, you will need to form an entity that contains such protections, such as a corporation or limited liability company (LLC). Although your corporation or LLC may have a DBA, it is the corporation/LLC that provides the limited liability. Therefore, partnerships and sole proprietorships should understand that DBAs, by themselves, do not offer the liability protections of corporations or LLCs.

Ensure Everything is Done Correctly

DBA applications often entail an jurisdictional application and a publication requirement. If you have any questions about whether or not you need a DBA, or you would like assistance with this process, we are here to help. Please contact Greenbaum Law Firm to set up a meeting with one of our business attorneys today.

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Greenbaum Law Firm, P.A.

The Greenbaum Law Firm, P.A. is a boutique, client-centric law firm concentrating in the areas of business and corporate law, contracts and agreements, and real estate. Our unique approach to the practice of law consists of positioning our clients at the center of the legal practice and pursuing their objectives in the most efficient and transparent manner.

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