Doing Business As (DBA), also known as a Fictitious Business Name, often refers to a trading name or assumed business name. It can help the public know the owner of a specific business. DBA was created as a form of protecting consumers. It can help prevent legal troubles by barring unscrupulous investors from operating under someone else’s name. The name of a business that has filed a DBA is often published in the local newspaper so that the public can know who owns a particular business. Filing a DBA can help keep a company in compliance with the law. It can be used as an alternative business name by sole proprietors who may not have a formal legal entity. Here are the possible benefits of filing a DBA.
Make Banking Easier
Entrepreneurs can protect their assets from liability claims by separating their personal accounts from their business accounts. A separate business bank account can make taxation and bookkeeping easier. It can also help with preserving your credit score. Separating your business from your personal assets can also make you look more professional in the eyes of potential lenders and clients. Banks can rarely allow sole proprietors to open a bank account without an employer identification number (EIN. Fortunately, entrepreneurs can use their DBA as their EIN alternative.
Filing a DBA can help to comply with the law. Corporations and LLC owners are often liable to safeguard their personal assets when their companies are sued. However, legal protection may not hold for a business operating under a different name. However, business owners can present their DBA as evidence that their personal assets and business are separate entities. Partnerships or clients might also require a business owner to have a DBA before closing a deal.
Open Up Possibilities For Expansion
Corporations with a DBA can operate multiple enterprises under the same ownership. That means that that a business can expand its operations without the need to form a separate entity. However, the law may require a company to file a separate DBA before it expands to other states. You could face steep penalties if you don’t do this.
Make It Easier To Register a Business Name
Filing a DBA is arguably the easiest way to register a business name. It often lets entrepreneurs establish their business as a separate entity. However, requirements for filing a DBA can vary across states. In some states, business owners can register their DBA with state agencies such as the State Secretary of State, whereas in other states, registration can be done at the county level. The processing fees and forms may also vary across counties. You can check the requirements for applying for DBA certification in your state with the local Small Business Administration.
Help With Defining Your Brand
Your brand name often defines your business. It ought to reflect your services and products and give potential buyers a reason to invest in you. Your brand name can tell potential buyers what you offer and compel them to walk into your store. Choosing the right name for a business can be tough. Entrepreneurs who are not sure where they would like their startups to be in five years can struggle with finding a suitable business name. Filing a DBA can come in handy for entrepreneurs struggling to find a unique name for their business.
Help With Launching a Website
With a DBA, companies can transact business under their domain name. That can be helpful for companies that like using different domain names. Filing a DBA can also allow you to convert your brick and mortar store into an online store.
A DBA can let the public know who is behind a specific business. Business owners often use their DBA for protection and ensuring compliance with the law. You can use it to bar unscrupulous business owners from operating under your business name. Your DBA can also make it easier to open a separate business bank account and separate your business from personal assets. It can also open up more business opportunities for a startup. With a DBA, an entrepreneur can operate several business entities under the same name. Filing a DBA can also help an entrepreneur build trust with potential partners and clients. With a DBA, entrepreneurs may no longer require a formal legal entity to operate a business. However, as stated above, the procedure for filing a DBA can vary across states, so consider checking with your local authorities. A DBA can be a prerequisite to using a different business name or opening a business bank account, so it would be wise to file it upfront.