A DBA company operates under a name other than its legal one, allowing for branding purposes and to avoid the high cost of incorporating across multiple locations. Requirements vary by location, and registration allows for conducting business under the assumed name. Renewals may be required to ensure exclusivity.
A DBA company is a legally incorporated organization operating under a name other than the legal one. DBA is an acronym for “doing business like”. A company operating as a DBA entity is also known as one using a fictitious name, fictitious trade name, trading name or assumed name. Registered companies and companies operating as a limited liability company, limited partnership, limited partnership and limited liability company can operate as a DBA company after meeting the necessary legal requirements. Requirements usually vary from country to country, region to region, state to state, and locality to locality.
Organizations that operate in a DBA fashion typically do so for branding purposes. A typical example of a DBA company would be a local company called Sam’s Fried Chicken Southern Style in a southern state but whose national legal name is Samantha’s Fried Homestyle Chicken Inc. Sam’s name allows the company to position its products with a local flavor while retaining all the legal benefits of a large company.
Businesses typically choose to start a DBA firm to avoid incurring the often high cost of incorporating across multiple locations. When registering as a DBA corporation, however, many states require that the organization register as a “foreign corporation” before it can begin conducting business. This does not constitute the formation of a new business entity.
Once a company goes through the necessary steps to “do business as” in an area, it is generally permitted to do everything under its assumed name which makes a fully incorporated corporate entity. It can, for example, open and use a bank account; accept and issue payments, including those by credit card; list business phone numbers; print advertising and promotional documents; manage websites; and conduct virtually all necessary business transactions. The business name must be used, however, on all federal and local government forms and applications, including applications for sales and operating licenses, permits, and employer tax identification numbers.
Filing as a DBA company usually involves a local authority ensuring that there are no other companies operating under the same name. Once you are granted permission to register as a DBA company, registration typically entitles the company to use that name to sell certain products or services within a limited geographic area. The length of time a business can operate as a DBA firm varies from place to place. Some local governments require DBA registrations to be renewed at specific intervals to ensure that no one else can do business under that name.
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