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An essential step to starting a business most entrepreneurs don’t immediately think about is legally establishing a business name. In addition to separating out your business income and expenses with a separate bank account, one of the first things you’ll want to do as a sole proprietor, assuming you aren’t ready or don’t have the funds to incorporate, is to form a DBA (Doing Business As). That way you can market yourself and receive checks in the name of your business, instead of your personal name.
What Is A DBA Name?
DBA stands for “Doing Business As”. A DBA name is a business name (such as “We Rock Your Web”) that you use instead of your personal name (John Smith). It is a way for you to legally register that you are doing business under than name in your state. It is, however, a step short (as well as less expensive) of incorporating as a limited liability company (LLC) or corporation.
Do I Need A DBA?
It is possible to run your business under your personal name, and cash checks accordingly. You’ll file your business income on your personal tax return. However, there are two instances where a DBA registration becomes more beneficial:
1) You’re A Sole Proprietor Looking To Run Your Business Under A Different Name
The first instance is if you are a sole proprietor or have a general partnership and are conducting business using a name that isn’t your own name. For example, if John Smith wants to open a candle shop called Sniff This, he would need to file a DBA for “Sniff This”. However, if he wanted to open a candle shop called John Smith’s Candles, he may not have to file a DBA. If the business name implied a group (e.g. The Smith Group) or he just used his first name (e.g. John’s Candles), he’d need to file a DBA.
2) You’re Already A Corporation, But Are Looking To Run Your Business Under A New Name
The second instance is if you have an LLC or are incorporated and are conducting business under a name that is not the same as the name of the LLC or company. For example, if John Smith’s Candles, LLC wanted to operate under the name JohnsCandles.com, he would need to file JohnsCandles.com as a DBA. The same goes for if John Smith wanted to expand his business with the sale of incense and use John Smith Incense in his new business name, then John Smith’s Candles, LLC would have to file a DBA for John Smith Incense.
Still confused? This video does a good job of explaining what a DBA is and when to file for one.
How Much Does A DBA Cost?
These prices are from time of publishing and may change over time.
- Standard: $99 + state filing fees
- Premium (includes 30-day trial of attorney advice): $119 + state filing fees
- Federal Tax ID (EIN) Obtainment: $79
- Seller’s Permit Application: $49 for most states
How Can I Obtain A DBA?
Visit your city’s local business office to find out how to file a DBA with them. In many cities you’ll also be required to obtain a business license (essentially a map of your business location marking off parking spaces – the license is renewed via an annual fee).
It’s easy (and less expensive than using an attorney) to create and file a DBA online with a service such as LegalZoom. You can finish the filing process in as little as 15 minutes. Legalzoom promises lifetime customer support and a 100% satisfaction guarantee. Below are the steps taken to file for your DBA online:
- Complete the online questionnaire.
- Complete the DBA application through the LegalZip software.
- LegalZoom files your documents with the government after obtaining your signature on the completed DBA application. (Some states (AK, CO, FL, HI, MO, OK and WA) do not require a signature, so the papers are electronically filed directly.) The review period averages about 15 business days after the signature is received.
- DBA application is approved and “County Certified Copy” is mailed to you (typically takes about a week).
- DBA statement is published by LegalZoom. Some states (CA, GA, IL, MN, NE and PA) require your DBA statement be published in the newspaper. Proof of publication will be forwarded to you and a duplicate copy of your statement. If the county requires proof of publication, LegalZoom will file with the county at no additional cost to you.
Congrats, you now have your DBA and can operate your business under your cool new name!
What If I Want To Protect My Business Name?
To protect your business name for use on a website, product, or marketing materials you’ll want to file for a trademark. Our comprehensive guide on trademark registration can help you with an easy to follow step-by-step approach.
What’s Your Business Name?
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