Have you ever considered doing business under a name that is different from your current business name? Small businesses are able to do this by filing for a doing business as name, or DBA. This is a public registration of a name under which you plan to do business.
If you plan to conduct business under a name that is different from your existing corporate name, you’ll need to file for a DBA to identify the business entity. Here’s what having a DBA can do to benefit your business.
Create a separate business identity.
By creating a DBA, you may establish a separate business identity for customers and vendors. This allows your business to present itself in a professional light. Keep in mind, however, that while DBAs identify the business and claim its name, they do not grant exclusivity for the use of a business name.
What does that mean? Essentially, if you file for a DBA the name cannot be used by another business on the state level. Let’s say you file for a DBA in California. No other business in California is currently using that DBA, so you are able to file and register for the assumed name. This discourages any other California business from using that DBA and allows you to better protect your brand. Most states also have laws that forbid businesses from registering names that are deceptively similar to another DBA already registered in that state.
Let’s pivot to a different state. Imagine a business in Arizona files for a DBA that is the same name as your California DBA. This Arizona business can file for that DBA and use it so long as no other business in Arizona is using this DBA.
A DBA also goes by a few different names. Some of these include fictitious names, trade names, assumed names, or doing business as names. Check in with your local Secretary of State prior to filing to see which name a DBA goes by in the state you plan to conduct business.
Open a business bank account.
Opening a business bank account requires a few documents. One of the most common ones is an employer identification number (EIN). This is a tax ID that the IRS issues to identify a small business and is required to open a business bank account.
Another requirement to open a business bank account is a certified copy of your DBA. Business owners are not allowed to use their personal bank accounts to issue or receive checks under their business name. However, you will be able to open a business bank account under the name of your business by filing for a DBA. This gives your business a separate bank account that allows it to collect checks and payments under the name of the business.
Start publicly advertising your business.
Once you have fully registered for a doing business as name, you can start publicly marketing and advertising your small business under that DBA.
Additionally, some states may require you to publish that you’ll be doing business under another name in a local newspaper. Check in with your local Secretary of State to see if this requirement applies to your DBA. As you begin actively advertising and marketing the business, this increases the visibility of your business and allows you to expand your customer base.