Understanding what is a DBA (Doing Business As) is one of the more confusing steps for new business owners.
Though if it’s explained right, it’s easy to understand and even easier to get. Read more…
If you are in business and you give your business a catchy assumed name you will probably attract a lot of customers.
Beyond that, however, your business name comes with no other benefits. For example, you cannot accept checks made out in the name of the business because you wouldn’t be able to cash them!
Well, you could if you had a LEGAL fictitious name. This is known as DBA – “Doing Business As”. It involves the ability for a person or company to conduct business dealing under an alternate name without having to form a completely new business entity.
Additionally, one can use more than a single DBA name. In fact, there is really no limit to the number of fictitious names that the individual can use.
So, if the individual expands his business interests into other areas all that need to be performed would be to file for more than one fictitious name with the state.
What Is a DBA? What Are the Benefits?
While some may not see the necessity for the concept of “Doing Business As” it provides a number of critical and important benefits that aid in the proper smooth operation of a business. For example, if Dave Jones owned an online comic book shop named Realms of Super Heroes he would need to keep payment options as simple as possible.
This would include stating “checks or money orders are payable to Realms of Superheroes.” If he stated make checks payable to “Dave Jones” he would still probably get a number of checks made payable to Realms of Superheroes.
This would prove disastrous because he wouldn’t be able to cash the checks! This would necessitate returns of the checks, delays in orders and other hassles that could lead to decreased business. Learn what is a DBA and how you use it properly.
Then, there is the unfortunate problem of invasions of privacy that might occur. Those who have a problem with Realm of Superhero would have to direct their concerns to the business. But, if they discover the name and unlisted phone number of the owner then it might prove possible that a number of unwanted, intrusive phone calls would be the result.
Working Under a DBA
The process of working under a “DBA” is significantly less expensive or involved than operating as an LLC or a corporation. With a DBA, a sole proprietor can use a business name without having to become involved with the LLC or corporate process.
Granted, there are fees associated with a DBA filing, but the fees associated with this are very nominal. There are some locations that even allow you to file a DBA online.
It is not uncommon for states to charge less than $50 for a DBA name and this is well within the range of affordability for most sole proprietors. Plus, the filing fee would also be tax deductible so save your receipts! Important point when learning what is a DBA and how to file for one.
One final note: it is important to not select a DBA name flippantly. If the name is used by another entity then your DBA application will be summarily dismissed. But, if you come up with an original catchy name then you are in business and your potential is limitless.