Your business name carries a lot of weight. It represents you in public through your branding and behind the scenes in legal documents.
How do you choose a name that meets all your needs? What if you run several businesses and only have one LLC?
Some business owners decide one name can’t do it all and instead set up several names for different purposes. You can do that by registering a DBA.
What is a DBA?
DBA stands for “doing business as” — it’s a way to give your business a name outside of an LLC or corporation filing.
Some U.S. states refer to this as a “fictitious name,” and countries outside the U.S. often call the designation “trading as” or t/a.
Registering a DBA doesn’t create a new legal entity or endow you with any kind of business license. Instead, it lets you or your business entity conduct business under a trade name, whether you operate as an LLC, a corporation, a partnership or a sole proprietorship. For example, it lets you accept payments made to the DBA name and include that name on legal contracts.
A DBA may help protect your trade name from competitors, too, in a way. DBA names follow the same state guidelines as LLC and corporation names — in some states, that means they can’t be the same as or too closely resemble the name of an existing business.
Why you might file a DBA
You’re not required to file a DBA to run your business, but this kind of trade name is often useful for business owners. For example, you might want a DBA if:
- You don’t want to use your name as your company name. You’re a sole proprietor or partnership and want to conduct business under a brand name without setting up a separate legal entity (like an LLC or corporation).
- You operate multiple brands. You own an LLC or corporation and want to operate multiple brands under that company. For example, you might incorporate as Acme Media, Inc., and run several media properties within that one business.
- You’ve changed your brand name. You registered an LLC or corporation under one name and have rebranded your business to another name. A DBA would let you update your trade name without establishing a whole new business.
- You’re a franchisee. You own a local LLC that operates a franchise with a big brand. Your LLC name is probably something general, like Acme Restaurants LLC, so you can register a DBA, like McDonald’s Anytown East, to make paperwork and paychecks clearer for your business partners and employees.
Here’s an example: Jeff Kear, founder and CEO of Planning Pod, launched his wedding planning software in 2007 as My Wedding Workbook LLC. The company eventually expanded the software to serve a broader event planning market and added the DBA Planning Pod to accommodate the broader brand without setting up a new entity.
“If you are looking to create multiple products or could possibly expand into other vertical markets with variations of your current product, having an umbrella corporation and corporate name and then creating DBAs under it for your separate products can be an effective route,” Kear suggested.
Filing a DBA
You register a DBA with your state or county through the same office that handles LLC and corporation registrations — usually the county clerk, Secretary of State or Department of Revenue.
Most states charge a fee for creating a DBA. It’s usually low, around $10, but could be as much as around $100 in a few states. You can typically file and pay online through the proper department’s website.
Just like a business registration, you have to renew your DBA registration every one to three years, depending on the state.
Filing a DBA doesn’t restrict you from doing business under your legal name or your business’s official name. It gives you the option to use both the original name and the DBA name.
Selling a business with a DBA
Registering a DBA doesn’t create a separate legal entity in your business. This is an important factor if you want to sell all or part of your business, because it affects the type of sale you can pursue.
If you want to sell all or part of a business you’ve built under a DBA, you’ll have to do it through an asset sale. That lets you sell just the DBA line of business, while you retain the rest of your umbrella company, even if the umbrella company is an LLC.
Depending on what kind of business you run, you might sell goodwill and intellectual property (like connections with clients and client processes) or segregated assets within your business (like a single app from a software business), said M&A attorney Alicia Goodrow of Culhane Meadows.
Lou Haverty uses a DBA for his e-commerce brand Enhanced Leisure under his business LJH Media Ventures LLC, because he intends to sell the DBA brand and build another.
“I use a DBA name because one of my growth strategies is to build and sell,” Haverty said. “The buyer would purchase the assets of the business, and I would be left with an empty LLC company. I could then start a new business under a new DBA name and start the process all over again.”
The best part? He wouldn’t have to go through the tedious process of forming another LLC.