Forming a business is a complex operation. The waters can get a bit muddy when you start wondering if you need to adopt different names. You may consider that a single name, the one you started with, is more than enough. But as it turns out, you may actually have plenty of reasons for moving to file a DBA motion.
What is the Definition of a DBA?
The first thing you may be concerned about is whether or not you need to create and file an official DBA name. A DBA means “Doing business as.” It’s also sometimes known as a trade name, assumed name, or fictitious name. Filing for a DBA will allow you to do business under a name that is not the same as your own.
At this point, you may now be asking why you would suddenly need to adopt a completely new and separate name for your business. You should note that there are several key advantages that can come with filing for a DBA. These are perks that may help you to grow and expand your business in a very profitable manner.
When you first form a new business, the legal name of that business will default to the name of the person or corporate entity that owns it. One of the only ways to avoid this is to name and register your new business with a DBA. This will keep your legal name from being attached to the business that you have founded.
A DBA is Good for a Sole Proprietorship
If you form a sole or general proprietorship, now is a good time to form a DBA. This is because the owners of these types of businesses and the businesses themselves are still the same legal entity. Filing for a DBA is the only way to change it. If you’re okay with having the same name, there’s nothing to change.
The main reason that this is the case is that these types of businesses are considered to be unincorporated. As a result, you are spared the hassle of having to file entity formation papers and a business entity name with the state. You will still need the usual business licenses and permits that apply.
You May Need a DBA for a Franchise
There is no federal or state law that requires the owner of a franchise to file for a DBA. However, this is still a very common and recommended action. It’s not needed to establish your business identity, but it does help to get the ball rolling. There are several reasons why this is a good time to file for a DBA.
If you buy a Wendy’s franchise, you may find this to be the perfect occasion to separate your legal and business names. This is because franchises tend to file as an LLC or corporation. You can follow the usual filing rules but then list “Wendy’s” as your DBA because you are “doing business as” a franchise owner.
A DBA Can Help You Make Changes
There are also a number of other reasons that you may need to file for a DBA. These may not involve creating a new business. They will tend to deal with a new set of changes that need to be made. If you decide to incorporate a business in several states, you can use your DBA to delineate which operation is which.
It may also be the case that you are making a change in the kinds of services that you provide. If you were formerly known as “J’s Car Wash”, you may now wish to do business as “L’s Mexican Burritos.” A DBA will help you notarize and facilitate the change.
Filing a DBA is Easier Than Ever
Filing for your DBA is far easier than it used to be. This is due to the fact that you can do a great deal of the work on the web. You will still need to get the right forms, fill them out, mail them in, and wait for your official notice of confirmation. But modern tech has made the process faster and more efficient.