What is a “Fictitious Name” or DBA - “Doing Business As” and what is it for?
MARKETING & SALESLEGAL
A Fictitious Name or DBA - "Doing Business As" is a tool that allows companies to use a business name other than their legal name and can be very useful for various purposes, both from commercial and legal points of view.
What is a “Fictitious Name” or DBA - “Doing Business As” and what is it for?
Every business has a legal name. In the case of a Limited Liability Company (LLC) and other entities, the legal name is the one that appears on its incorporation documents or articles of incorporation.
However, any individual or business entity can choose to conduct business under a different name by applying for what is called a DBA, which is a "fictitious name," which can be legally registered as such.
The purpose of registering this name is to notify the public that the company is conducting business under a name other than its legal name.
This fictitious name is governed by consumer protection laws, and its registration is required so that customers and suppliers, as well as the general public, know who the real owner of the business is.
Is it possible for a company to use more than one DBA?
There is no set limit on the number of fictitious names a company can use, as long as it has been properly registered in the state where it operates.
What a DBA is not
Registering a DBA is not the same as registering a business. If you register a DBA without first registering an LLC, corporation, or other type of legal entity, the state where the business operates only recognizes it as a sole proprietorship.
As a sole proprietorship, the owner can conduct business operations under a fictitious name, but has no liability limitations. This means they are personally responsible for the business's debts and obligations.
For this reason, it's advisable to register a legal entity such as an LLC, a corporation, or another entity that limits liability for the business's debts. This way, shareholders are protected, as they are not personally liable for those debts. This is one of the biggest advantages of forming a company.
Once you've registered your company, LLC, or any other entity, if you wish to operate your business under a name other than the one stated on the company's formation document, you will need to submit an additional application to register the DBA as a name.
A DBA is not a trademark
For this reason, it's advisable to register a legal entity such as an LLC, a corporation, or another entity that limits liability for the business's debts. This way, shareholders are protected, as they are not personally liable for those debts. This is one of the biggest advantages of forming a company.
Once you've registered your company, LLC, or any other entity, if you wish to operate your business under a name other than the one stated on the company's formation document, you will need to submit an additional application to register the DBA as a name.
Why do companies use a DBA?
These are some of the most common reasons why businesses use a DBA. It's worth noting that these reasons may vary depending on the type of business. What might motivate a Sole Proprietorship may be different from what motivates an LLC.
Using a DBA instead of a personal name
This is an important decision for sole proprietorships and general partnerships because, unless you have a DBA, your personal name and company name will automatically be the same wherever you publish it. Therefore, for privacy reasons, you may want to give your business a different name.
Using a DBA to give your business a more memorable and distinctive name
Your company's legal name may be very long and difficult to spell or pronounce, difficult to remember, or not very search engine-friendly.
In the case of a Sole Proprietorship or a General Partnership, you may want your company name to be more distinctive and descriptive of the type of business you operate. "Pedro Perez" is not the same as "PP Landscaping Services," for example. A DBA allows you to operate your business under a fictitious name instead of your personal name.
Banks might require a DBA to Open a Business Account
Many banks require sole proprietorships and general partnerships to have a DBA before opening a business checking account. They typically require proof that the DBA has been properly registered.
Use a DBA when adding a new line of business not reflected in your current name.
A DBA is often used when an LLC or corporation wants to add a new line of products or services not represented by the current company name. Using a more descriptive name can be very beneficial.
Use a domain name as a DBA, thus operating as a separate business
A DBA can be used to allow a company to conduct business transactions under an internet domain name. It can operate another business or website in addition to its current website. A DBA can allow the creation of a separate website geared toward a specific market segment, allowing for segmentation of products or services.
Registering a DBA notifies other businesses and your customers that the name is in use and is part of the public record. However, it's important to remember that in some states, a DBA doesn't provide protection against someone else registering the name, as a trademark does.
Use a DBA to communicate your name and your brand name
Registering a DBA notifies other businesses and your customers that the name is in use and is part of the public record. However, it's important to remember that in some states, a DBA doesn't provide protection against someone else registering the name, as a trademark does.
How to apply for a DBA
There are the basic steps:
• Fill out the appropriate forms with the state. In Florida, the process is simple. You should go to the Florida Division of Corporations website and search under “Fictitious Names” to find out if the name already exists, in which case, you should choose another one.
• Depending on the state, you may also need to apply with a local county, a state agency, or both. Some cities and counties require additional steps, such as publishing your DBA in a local newspaper. Therefore, it is important to check all the requirements of the relevant authorities in the states where the company will be doing business.
Summary
Your business name is a valuable asset that you should protect. Using a DBA can be an important part of your business strategy. Make sure you apply correctly according to the state where your business operates and make sure to keep your registration current and not let it expire.