DBA 101
What it is: alias, nickname or pseudonym. DBA is an acronym for doing business as. It has a few other names or synonyms: assumed name, assumed business name, trade name, fictitious name, or false name. You may see it with or without dots, slashes, uppercase or lowercase: dba, d.b.a., d/b/a. A registration allows you to officially use a name other than your legal name for things like opening bank accounts, writing checks, signing contracts, or whatever, whether you’re an entity or individual behind the scenes. What's in a name? That which we call a rose/ By any other name would smell as sweet.
What it’s not: entity. You should not use suffixes or designations like Inc., Corp., LLC, LP, or LLP with a DBA because that can be misleading. DBAs do not offer you any sort of protection from personal liability. It can be helpful to stylize the DBA with italics, caps, fonts, or other indications that it’s a brand name, but it’s best to clearly say so and spell it out somewhere. Here’s one approach or formula that works so people know who they’re dealing with: Full Name, Suffix, State Entity Type DBA Brand Name. Usually the intro paragraph of a contract or the website footer is the best place to place this. For example: ABC, Inc., a North Carolina corporation DBA Perfect Plumbing.
What it’s not: trademark. Registering a DBA can possibly prevent someone else from registering an entity or DBA of their own using the same exact name in that same exact county or state, but doesn’t give you nearly the same protection as a trademark or service mark registration would. You can license or prohibit the use of a name registered as a DBA or trademark, like a fence to guard against someone stepping on your toes or turf unless you let them, but a DBA has much less force or reach. If the brand name could be a valuable piece of intellectual property for you, a DBA alone is not the best way to realize or maximize that. If that’s the case, you should consider a trademark or service mark application in addition.
What’s the point: brand or rebrand. Without a DBA registration or certificate, doing business under a name other than your real/legal name could be considered misleading or fraudulent. Someone dealing with you may not be able to figure out who you really are or who to sue if anything goes awry. Here are some use cases: you could register multiple brand names for different products or offerings coming from one business, or use a DBA more like connective tissue to link parents, subsidiaries or affiliates together – think DBA DNA.DBA registration has relatively low filing fees and can be a very cost-effective and simple marketing or finance tool for businesses of all sizes, or even individuals. For example, you could have an entity name that is either too narrow or too broad to signal to the market what your business actually is or does. If your company’s legal name is ABC Inc., you could use a DBA to more specifically or strategically describe what ABC Inc. is up to (maybe a DBA like “Perfect Plumbing”). Another example is that if you historically make shoes, but now want to expand and also make insoles, you could file a DBA and then open a separate business banking account solely for those insole expenses or sales in order to separate the books of the two business lines. You could also use a series of DBA filings to operate those businesses under a single name no matter what your organizational structure is with parent or subsidiary or affiliate entities. The possibilities are endless.
One of the most common uses is by a sole proprietor engaged in a business that carries low risk, so protecting personal assets against liability if something goes wrong isn’t much of a concern. The businessperson will often file a DBA to signal what he or she does. The carrying cost for registering an actual separate entity (like a corporation or LLC), including the initial filing fee and ongoing annual reports or franchise taxes, may not be worth it, or it may be. That’s math for you to do. Take into account your own exposure to liability, your tax situation and whether having an actual entity could make sense in other ways. But having a DBA could do the trick if you just want to render services or sell products under a brand name instead of using your own government name.
Registration Process: To protect consumers, most states require DBAs to be registered, allowing anyone that cares to trace the thread from the actual entity to the name used to see who is behind the business. These filings are either at the state or county level. Most of our clients are surprised to learn just how cheap, quick, and easy the process can be, but it may require some legwork. The form is usually a single page and simple enough to do yourself. Some states or counties process these applications online, but many don’t and require a trip to the register of deeds or county clerk along with payment of the filing fee. Practically, most businesses just register a DBA either in the home state where they’re formed, or the headquarters/home base instead of in every single county and state where they technically operate or do business.
Renewal: this varies with the rules in place in your state, but some registrations require renewals. In North Carolina for example, any DBA registered prior to December 1, 2017 expires December 1, 2022 unless the assumed business name certificate is refiled and renewed. Any DBA registered in North Carolina since December 1, 2017 is perpetual and doesn’t expire. We see many businesses submit initial filings only to have them rendered useless with lapses. You must maintain any registration for it to remain effective.We hope this helps you better understand what a DBA is and isn’t. What’s in a name? It’s up to you.
Headquartered in the Research Triangle region of North Carolina, Fourscore Business Law serves entrepreneurs and businesses in the Triangle, throughout the Southeast and in Silicon Valley / San Francisco. We also represent venture capital funds and other investors who invest in companies throughout the U.S. The idea of delivering maximum impact in a simple and succinct manner is what we’re calling the Fourscore Principle. And that is what Fourscore Business Law is based on. Our clients operate in a broad range of industries including tech, IoT, consumer products, B2B services and more. Questions? Shoot us an email or give us a call at (919) 307-5356. Your first call is on us.