Owners of new small businesses usually have to register those businesses in some form with local or state authorities. One option is to register a DBA with the county. However, going the DBA route is not always applicable. It really depends on the small business, who owns and operates it, and the model on which it is structured.
Are you looking to start a small business? If so, it behooves you to understand local and state laws governing business entities and registrations. Depending on where you live and the type of business you’re starting, you may not need to do anything at all. But if you do need to register your company, failing to do so could lead to problems you really don’t want the hassle of dealing with.
Definition of the DBA
‘DBA’ is an acronym that stands for ‘doing business as’. It’s a registration tool for businesses looking to conduct daily operations under a name that differs from the name of the company’s legally recognized ownership. A good way to illustrate it is to imagine an individual looking to start his own landscaping company.
Let’s call our fictitious landscaper ‘Joe’. He could do business under his legal name, or he could utilize an online business name generator to come up with something a bit more creative. TRUiC offers a fairly straightforward and easy to use generator.
Name generators notwithstanding, Joe would need to register whatever name he came up with in order to legally do business under that name. He would register the name under a DBA filing with his county.
When a DBA Is Required
Though state laws can vary, most states require any business entity operating under a name that differs from the name of the legal owner to file a DBA. Sole proprietors obviously qualify if they chose a business name that differs from their legal name. But what about limited partnerships, limited liability corporations (LLCs), and S-corporations?
These types of business entities don’t necessarily have to file DBAs because they have to register their organizations anyway. For example, you must register and file the right documents with the county to establish an LLC. A company is officially established by virtue of that registration.
There are times when partnerships, LLCs, and S-corporations choose to file a DBA anyway. Doing so simply adds the legal protection a DBA offers when doing day-to-day business under a different name.
DBAs and Franchises
Franchise operations are in a sort of gray area when it comes to DBAs. Most states do not legally require franchise owners to file DBAs for the simple fact that franchise brands are already established. But states don’t prohibit franchisees filing DBAs either.
As a franchise owner, you would establish your own LLC or S-Corporation under which your franchised stores would operate. If you wanted to, you could also file a DBA to establish the fact that you are doing business under the franchise name. Again, most states do not require this extra step. Some franchise operations do, though.
In a nutshell, you would want to seriously consider filing a DBA if you used a business name generator to come up with a catchy brand name for your company. Filing a DBA is a legal requirement if you plan to operate as a sole proprietor but not under your legal name. It may be optional should you decide to register your business as a partnership, LLC, or S-corporation.
If you have any questions about the DBA, contact your county. They should be able to help you get one filed in a timely manner.