By Winmark Business Solutions
In some situations, you may want to operate your business under a different name than the one on your articles of formation or other filings. Typically, this is most true for sole proprietorships that may want to distinguish between business and personal activities, but other entity forms may do this as well to highlight different activities within an organization.
To do this, you must submit a DBA (doing business as) filing that officially registers the name with state or local authorities. A DBA name is also known as an assumed name, trade name or fictitious owner affidavit, and this registration notifies the public of your intention to do business under this name.
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Here's an example of when a DBA filing may be used: Tom Jones is an electrician working as a sole proprietor and wants to call his business Qualified Electric. Tom Jones would register his DBA name "Qualified Electric" with the appropriate jurisdiction and would act as the owner of that DBA name.
Another example, pertaining to corporations: Western Corporation is in several lines of business, including construction and painting supplies. It wishes to do business under names that better depict those lines of business, with the ultimate goal of seeking to develop marketing campaigns around each of the new names. Western Corporation might file a DBA for "Complete Construction" and "Color Me Painting." Each of these DBA filings would take place in the jurisdictions where the respective businesses operate.
If you plan to use a different name, you must make a DBA filing with local officials and the company cannot transact business until then. In addition, banks will not issue an account to the business unless the DBA filing is complete.
While there are no limits to the number DBA names you wish to register, there are some restrictions. You cannot use words that may mislead the general public into believing the company is something other than what is being portrayed by the DBA name. Moreover, you cannot use entity name endings such as Inc., Incorporated, Corp., Ltd., or LLC if the company is not filed as a corporation or LLC. In some states, there are publication requirements that the DBA filing must appear in specific publications for a specific period of time. Failure to publish this information would invalidate the DBA filing; check with local authorities.
Keep in mind that registering a DBA does not reserve the name against future use by another party. Registration of a DBA or fictitious name is for public notice only and should not be presumed that the registrant's rights to own or use the name are protected.
About the Author
Winmark Business Solutions (WBS) is a free Web site for small businesses and entrepreneurs containing over 6,000 pages of business-critical information and downloadable tools at www.WBSonline.com. WBS is a division of Winmark Corporation, a multi-brand franchisor with nearly 900 franchise locations in North America. With over 25 years working with small businesses, WBS draws upon years of experience to bring important small business articles, information, tools, forms, checklists, calculators and downloadable forms to the small business owner to help their business grow. WBS contains over 6000 pages of business-critical information all available at www.WBSonline.com.