DBA (Doing Business As)

A Little About

DBA (Doing Business As)

Called alternately "doing business as," "DBA" or "d/b/a," a fictitious name is a trade name that your business goes by that is easily recognized by the public and does not include your legal name. Fictitious names are not business entities, yet registering them with the appropriate local government agency provides flexibility and a way to streamline business operations. Fictitious names can be abused and leave your assets vulnerable unless you organize your company as a corporation or limited liability company.

Advantage: Low Organizational Cost
Compared to the expense of creating an entirely new business entity such as a corporation or limited liability company, the fictitious name sets up the alias of your business inexpensively. After it is registered with the county clerk or other authorizing body, the fictitious name becomes the legal name of the company and is used in all official paperwork. The specific filing requirements vary from state to state and local jurisdiction. In some states, you may not need to register a fictitious name at all.

Advantage: Versatility and Multiple Names
If you already have an established corporation or LLC, you can use fictitious names instead of creating separate corporations or LLC spinoffs. You simply register a fictitious name for each of the businesses you want to create. The original company serves as the anchor for the satellite businesses as the latter expand and grow. Practically any business can use a fictitious name, whether you are a sole proprietorship, general or limited partnership, corporation or limited liability company.

Disadvantage: Geographical Restrictions
The flexibility and ease of the DBA is ultimately limited by the fact that it is restricted to the city or state in which it is filed. You'll have to file separate DBAs for every new city, county or state in which you want to do business. In some cases, separate filings for different cities or counties may not be necessary if you file on the state level.

Disadvantage: Name Protection Quandaries
While a fictitious name secures your business an easy-to-recognize name that is not your personal name, it is not a trademark or copyright, and it does not protect your personal assets. Your DBA could not be the same as that of another business, yet the name would not protect you from other businesses registering similar names with slight variations. In addition, the fictitious name does not have the protective functions of corporations and LLCs in separating your assets from those of your business. Multiple DBAs can also raise suspicion of fraud.

For any entity offering an investment opportunity to more than 1 investor, federal and/or state securities laws may apply and may require certain disclosures or registrations in connection with such an offering. Please consult a licensed attorney for advice concerning your specific circumstances.