Before registering a DBA, there are many considerations that you will need to take into account before you begin the process. The regulations around DBA’s register vary by state, and poor planning and research prior to registration can lead to several problems down the line.
What is a DBA?
A Doing Business As (DBA), sometimes known as a Trade Name, Fictitious Business Name or Assumed Name, is the chosen name under which a company operates.
How Do I Avoid Running into Issues after Registering My DBA?
There are several key elements of registering your DBA that end up affecting your business later on in a material way.
Legal Liability Protection
A DBA does not provide any kind of liability protection and if you are operating as a sole proprietor and not an LLC, it is vital that you have good legal advice and protection in order to ensure that you are protected as you may very well be held liable for any legal liability or debts incurred by the DBA.
Different State Laws
The process of registering a DBA can vary widely across states and so it is important that you fully research and understand each particular state’s requirements.
In states such as Kansas, New Mexico, and South Carolina it is not actually possible to register a DBA, and in some states, you are legally required to register a DBA regardless of what kind of business entity you are operating as. Knowing your state requirements can assist you in saving time and ensuring that your DBA can run effectively.
DBA’s can also expire, depending on your jurisdiction and some states offer online registration platforms to streamline and assist you in the process.
Naming Your Operation
The process of naming your DBA varies per state, and so you should begin by understanding your state and county requirements, there are three main considerations that you should understand and investigate before choosing a name for your operation.
After registering your business, it is advisable for you to file for a nationwide trademark that will prevent others from attempting to operate under the same name.
This means, however, that when choosing your DBA name, you should thoroughly investigate whether or not your chosen name is already trademarked to prevent you having to change your business name at a later stage and lose any kind of momentum and brand value you may have gained when operating as a DBA.
A similar principle applies with regards to your domain name. It is important to research – before you register your DBA – whether or not your chosen DBA has an available domain name. Prior to registration and investigation, you should also consider having 3 or 4 backup business names to avoid disappointment if your preferred name is already being utilized in either of these areas.
Including Words and Letters That are Intentionally Misleading
Your DBA name should not attempt to purposefully mislead customers and government officials into thinking that the DBA is a formal registered legal entity. For example, a DBA cannot end off its name with the letters “LLC” as it is not registered as such.
In some states, the DBA can contain certain acronyms such as Inc. if the company is attached to a particular corporation and operating as such.
A DBA is, unfortunately, only allowed to physically operate in the jurisdiction in which it is registered, meaning that once you wish to do business outside of that jurisdiction, your DBA is not considered a legal operation.
This can negatively impact your ability to expand and grow as a business, and so you should carefully consider the kind of scope and operating area of your business when registering your DBA.
If you fully research your state requirements, have effective legal representation and sound operational protocols as well as ensure that your chosen name has not already been registered for trademark or domain name, being able to file a DBA will be simple, inexpensive and will facilitate the smooth running of the further development of your business.