By and large, there are a number of reasons why doing business under a Doing Business As, DBA, name may be a good move for a business or company. This post takes a look at some of the basics you need to know of when it comes to DBA, what a DBA name, otherwise known as a fictitious name, is and as well look at some of the key reasons why you may want to consider it for your business. We will as well provide some tips on how you can register your DBA name. Read on for more.
As we know, each and every business has a legal name or its true name. Looking at the case of a sole proprietorship or partnership, this is often the name of the owners of the business. As for the corporations and the other limited liability companies and the statutory entities, the legal name is the name that is captured in the formation documents, here talking of the articles of incorporation or association.
In the event that the business does operate under any other name other than these, those captured in the formation documents like so mentioned above, then this name that they operate under is known as a fictitious name or DBA name. These names, the DBA names, can as well be referred to as an assumed name, a fictitious business name or as some would have it, a trade name. Interestingly, there is no limit as to the number of the DBA names that a business or company can use for its operations. But you need to be aware of the fact that as it is provided for in the various states, one cannot do business under a DBA name unless the DBA name is registered. And for the registration, you have to make a business filing in the state of your operations otherwise you will only be able to use your legal name. for the sole proprietorships and partnerships, this is to be the name of the owners and for the LLCs and statutory entities, this is to be the name it has in its formation documents as we have already mentioned above.
The reason why it is important to register a DBA name is to let the public that there is a business that is doing business under such an assumed name that is different from its legal name. The DBA laws are generally intended for consumer protection. Such registration of the DBA is meant to let the public know who the owners of the business are, those they will be dealing with in actual sense as this serves to protect their rights as consumers.
Like we have equally stated above, there are a number of reasons why a business may choose to use a fictitious business name. The reasons may vary according to the type of business. This is looking at the fact that what may make it relevant and wise for a sole proprietorship to operate under a fictitious name may not be the same as what would make the same move necessary for a limited liability company for instance.