How is a business named? That’s a trickier question than it may seem. Your business structure may dictate just how you can use the name you want for your business and what you have to do to register it.
There are essentially three options:
- Your business name is your legal name
- Your business name is the name of a registered corporation
- Your business name is an alias
This last option is known as a DBA, “Doing Business As”. If you want to give your business its own name but you don’t want to register for a corporation, this is the method that you need to use. Deciding whether you want to use your legal name or get a DBA name should be done before you do things like apply for an EIN number or open business accounts.
What Does It Grant You?
A DBA is an “operating name” for your company. This is different from the “legal name”. It lets the government and consumers know how to follow the ownership of a company to its true owner should they need to look. Also, it lets consumers find your business under a more friendly name instead of using your legal name.
In fact, for sole proprietors and partnerships, you may be required to get one before you can open a business account so you can get paid in the name of your business rather than using your personal account.
Can Anyone Use One?
Yes. Though most often used for sole proprietorships and partnerships, even corporations can use a DBA. This can be done, for instance, when the corporation wants to do business in another state but there is a company with a similar name already there. DBAs also let corporations operate multiple businesses under the same legal name without registering a separate company for each one.
What’s The Process?
States have different procedures for DBA registration. In some states, obtaining a DBA is as simple as filing an SS-4 form with the federal government and telling them your operating name. This can also be done if you apply for an EIN online.
However, some states, counties, and cities require you to register your name with them and possibly pay a fee. You may even have to place a local ad to inform the public about the existence of your business. However, these requirements may only apply to corporations. Check with your state’s laws or your business lawyer. Even if you have to pay, the fee is inexpensive.
Depending on your state, there may be restrictions on what you can use as a DBA. A common one is the use of terms that might imply that your company is a corporation when it actually isn’t.
Does A DBA Grant You Legal Protection?
No. A DBA is not a trademark nor is it your entity name. Multiple businesses can use the same DBA since it is considered an alias. Your EIN or your entity name is used by the government to find the real business name.
You can’t use a DBA to infringe on someone’s trademark. So you can’t say that you’re doing business like Google, for example, because that is a registered trademark. Technically, if you’re in a completely different field then you could use it as a DBA, but you could open yourself up to a lawsuit.
Furthermore, filing for a DBA will allow you to use that name in legal documents like contracts without a conflict. A corporation who signs a contract under an unregistered DBA can open themselves to a contract invalidation since there’s no record of the link between the name on the contract and the legal name of the corporation.