Doing Business As (DBA): How does DBA work and why do you need it for an LLC?Written by Marya Sutimi on November 21, 2022
You may not be familiar with what Doing Business As (DBA) is and how it can be essential for your business when you have just started. After all, every detail matters when you decide to run a business. Now that you’re registered your business under a Limited Liability Company (LLC), do you still need to use a DBA too?
In this post, we’re going to get into detail about Doing Business As (DBS), how DBA works for your business and whether you need one if you already have an LLC registered under your name.
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So what is Doing Business As, and how does it matter for your LLC? Let’s find out!
What is Doing Business As (DBA)?
In the US, the term DBA which stands for Doing Business As, is commonly used to refer to a business name that is different from your registered business name where it is licensed. In some other countries, they typically use a different term, such as “trading as.”
Though the terms may differ, DBA and “trading as” are essentially similar in terms of how they work. Assuming you already register your business, you can still file for a DBA if you want to use a different name in practice.
Not every business requires a DBA, but if you’re planning to register your business under your name and prefer using another brand name to operate it, you may need to file a DBA for legal purposes.
A real example of this DBA is my own business, Savviesticated. Although it’s the brand we’re known for as we operate with the name, I’ve legally registered my business under sole proprietorship with my name on it.
Why Do You Need Doing Business As (DBA) for an LLC?
If you register your business as a private limited company in the US, you will be registered under a limited liability company (LLC). It is a hybrid between a sole proprietorship and a corporation, where you won’t be responsible for your company’s liabilities as an individual.
When you register your company as an LLC, you can use your alias or brand name, so filing a DBA may not be necessary. However, one of the advantages of registering your business under an LLC is that you are allowed to run multiple brands under your business flag. And it’s the situation where you may need a DBA for your business.
Registering under an LLC can give you more benefits, especially if you’re planning to expand your business in a way that it can cater to various target markets or even different business lines. Imagine operating a few businesses under different brands while managing accounting under your LLC!
Why Doing Business As (DBA) is a Great Strategy for Your LLC
Now that you understand what DBA is and how you can implement it in your LLC, we’re going to highlight some of the benefits you can get for your business if you implement DBA as a strategy for your business in this section.
Filing a DBA may sound complicated, especially if it’s your first time doing it. However, the benefits that come with it may be worth the effort to file a DBA for your business.
So, why is DBA a great strategy for your LLC? Do you think your LLC needs DBA? What are the benefits of filing a DBA for your LLC? Check this out!
#1 Your LLC can run multiple businesses with DBA
As mentioned previously, although filing for a DBA may not be necessary for your LLC, you can still get the benefits of running a few brands simultaneously under your LLC business.
With DBA, you can explore opportunities to expand your business so you can have several sources of income through a few business lines under the same group.
For instance, if you start a cleaning business and you want to register it under an LLC, maybe you want to expand your business into a few specific cleaning niches. As an LLC in the cleaning industry, you can split your business into a few business lines to form a few brands according to each niche. In that case, you may need DBA separately for your house cleaning or carpet cleaning business.
The good news? You can grow each business separately while still operating under the same LLC, which means you can use the same platform to run all your business brands. InvoiceBerry has a top-notch system for invoicing for cleaning businesses, where you can easily customize the invoice according to each brand.
#2 It’s affordable to file for a DBA
While filing for a DBA may sound like extra work, filing for a DBA is not expensive. Depending on which state you register your LLC, DBA filling fees typically start from as low as $5 USD. Some states can go up to $150 to file a DBA, but it’s still worth every penny than having to pay thousands of dollars if you fail to register a DBA accordingly.
After all, it’s illegal to run a business under a non-registered name, so it’s always better to be safe than sorry when you start your own business. While the process may seem like a hassle, you can also hire a legal service to do it for you to avoid any liabilities in running your own business.
#3 You can strengthen your branding standpoint through DBA
Now that your LLC name is registered, you may get an idea of some catchier names for your business that can strengthen your brand. Instead of registering an LLC under a different name, you can file for a DBA to ensure that it’s legal to operate your business under your brand name.
On top of that, a DBA is also helpful if you go through a rebranding process since filing for a DBA is easier than starting everything from scratch.
#4 You can file for a DBA to target different markets for your business and diversify
DBA is a good option if you want to diversify your business lines, even if you sell the same products or businesses for your service. A different brand for each business line may result in higher sales.
For example, you have an LLC registered to start an e-commerce business focusing on fashion products, but you want to capture a few different domain names for different target markets. In that case, you can file for a DBA to split the sales for men’s or women’s products accordingly.
Even better, if you manage to scale your fashion business, one day you can also file for a DBA to run a fashion brand for children and teenagers too!
#5 Filing for a DBA protects you legally
As an LLC, you protect your business from a legal standpoint. However, any contract under your brand may be invalid without filing a DBA under your LLC. DBA helps to keep your business compliant with any agreement made under your LLC name.
How to File a DBA for Your LLC
Typically, every state has its policy regarding name registration through a DBA. While most states allow you to do it via a local or county agency, some also require you to file a DBA with a state agency.
Check with your state’s policy and complete the paperwork accordingly before paying the filing fee to register your brand name under your LLC. Do your due diligence to find out more about any restrictions that may come with filing a DBA within your state to ensure that you do the right thing while conducting your business.
Here are some steps to file a DBA for your LLC!
- Fill out the DBA form and submit it to the related agency. The latter may differ depending on your state, and some are also available online.
- Pay the filing fee to proceed with the DBA registration. Each state also offers different DBA payment methods, so find the preferred method in your state to pay the fee to complete your filing process.
- Renewal for DBA is required in some states, so double-check your DBA’s validity period to ensure its validity over the years.
- Depending on the industry, you may also need to secure a business license or registration for your DBA. Conduct your own research within your industry in the state, and follow it accordingly.
- Some states also require you to publicly announce your DBA by writing a statement in a local newspaper with proof of publication.
- Trademark your DBA to get double protection for your brand name. Many companies hire a trademark attorney to complete this stage, and it’s recommended if you want to secure your brand and avoid anyone else using the same name for another business.
Filing a DBA doesn’t have to be tedious, but you sure need to be vigilant about the steps you need to take according to your state. What’s legal in one state can differ in another, so always double-check the requirements to make sure you don’t miss any necessary steps while filing a DBA for your LLC!
When you already have an LLC, you may not require to register for a DBA. However, filing for a DBA may be necessary when you’re ready to scale your business.
You are allowed to register a few brand names under the same LLC, and it’s illegal to conduct businesses with unregistered names. To avoid the latter, you can file for a DBA to ensure that your business is legitimate from a legal standpoint.
So, do you need a DBA for your LCC?