Some companies, such as Limited Liability Companies (LLC), choose to do business under a different name than the one they have registered in their formation documents. Like other businesses, before an LLC may use an alternate name in its contracts, advertising, and customer interactions, it must complete a Doing Business As (DBA) filing to register the name. Fortunately, it’s not difficult to add a DBA to an LLC.
Anatomy of a Doing Business As (DBA)
A DBA legally allows an LLC to use a different name to conduct business. Other terms that states use when referring to a DBA include fictitious name, assumed name, and trade name.
The correct legal presentation of a DBA under an LLC is for the fictitious name to follow the business’s registered name.
DBA Presentation Example: Gerard Holmes Enterprises, LLC, dba GH Roof Repair and Replacement Specialists
That’s how the fictitious name would need to be documented on any bank accounts, contracts, etc. when specifically used for the business activities under the DBA.
For marketing purposes, an LLC can promote and advertise just the fictitious name. In other words, Gerard Holmes Enterprises, LLC, dba GH Roof Repair and Replacement Specialists could market itself as GH Roof Repair and Replacement Specialists.
Reasons an LLC Might Use a DBA
Why would an LLC use a fictitious name rather than its officially registered business name?
1. Simplify the Administration of Running Multiple Businesses
Rather than forming separate LLCs, business owners can file DBAs to operate individual lines of business under a single LLC.
For instance, an entrepreneur might decide to form Furry Best Friend, LLC and file two DBAs under that LLC:
- Patience Makes Perfect Dog Training for their dog training services
- Pawsitively Perfection Pet Photography for their photography services
Also, some companies file DBAs when they want to transact business online under a domain name that doesn’t match their legal business entity name. For example, if a business registered as Smith’s Home Staging Services, LLC wants to sell home and patio furnishings online through an e-commerce site with the website domain envyoftheneighborhood.com, the LLC might file that domain name as a DBA so that it can actively advertise the site and its products using the name of the website (e.g., Buy now at envyoftheneighborhood.com!).
2. Gain a Marketing Edge
After forming an LLC, a business owner may decide it’s just not catchy enough to spark customers’ attention. For example, say a business owner formed Lopez Landscaping, LLC. To generate more interest, they might file a DBA like Lopez Lawn and Landscape Transformations and market the business under that name since it has more pizzaz.
3. Project What the Business Does
If an LLC’s name doesn’t adequately project what the business does, the owners might consider filing a DBA that better conveys the products or services their company provides. For instance, an LLC named Williamson and Jones, LLC is vague and lacks a true description. But if the owners file a DBA like W&J Interior Design Consultants, customers will have a better idea of how the company might be of service to them.
4. Highlight the Locality of the Business
Another reason a business might use a fictitious name over its registered LLC name is to add a local touch to its branding. For example, imagine that a coffee shop called Quite the Cup Cafe, LLC opens a second location, which is in the southern part of its hometown. To differentiate and project the locality of that location, the owner might consider setting up Quite the Cup Cafe , Southside as a DBA for that new coffee shop.
Steps for Setting Up a DBA Under an LLC
While all states require registration of fictitious names, the agencies involved, and steps can vary. In general, below are the basic steps involved in creating a DBA under an LLC.
1. Learn What’s Required
Business owners should check with several sources to ensure they understand what they must do to successfully register a DBA in the state or local jurisdictions.
- The state agency with which the LLC was registered
- The county or city agency responsible for business regulation
It can also be helpful to enlist the guidance of an attorney if there’s any doubt about the requirements.
Some states require registration at the state level. In others, DBAs are handled by county or city governments. The local jurisdiction involved will depend on the state. It may be either where the principal place of business is located, where the LLC’s registered office (registered agent) is located, or where the LLC will conduct business under the fictitious name.)
2. Conduct a Business Name Search
While many states and local governments won’t check to see if any other business has already registered a DBA, some may reject a filing if the name is too similar to another business name in the state or locality. For that reason, it can be helpful to do a name search to see if there are any conflicts.
Even if a name similarity won’t prevent the approval of a DBA, it can be to the LLC’s benefit to use a name that’s not too closely matched. When multiple businesses use very alike names, prospective customers can become confused. And that can lead to a devastating case of mistaken identity. When one brand has a less-than-stellar reputation, customers might associate a reputable brand using the same name with a company that has a poor track record.
Note that a DBA name should not use designators or suffixes like incorporation, corporation, limited, inc., corp., LLC, LLP, or LP after it because the fictitious name is not an entity of its own. Also, state and local agencies have rules about using certain other words and abbreviations in business names. Those rules vary, so it’s important to research the restrictions before deciding on a name.
3. Complete the Required Forms
Many states and local agencies allow businesses to register a DBA online or complete a paper form.
The name of the online filing or form varies by state. Some call it Fictitious Name Registration, Certificate of Assumed Name Registration, Application for Trade Name, Doing Business Under an Assumed Name, or another variation.
Regardless of the form’s name, the general information requested by agencies is similar and might include the following details:
- The fictitious name to be registered
- A brief statement of the business activities to be carried out under the fictitious name
- Physical address of the principal place of business
- Legal name of the individual or business entity filing for the assumed name
- Registered agent name and address (if a business entity is requesting the DBA)
- The county or counties in which business will be conducted under the assumed name
The cost to file a DBA depends on the state or local agency. Generally, it’s less (sometimes much lower) than $100. Using an online business document filing service to ensure the application is completed correctly will add some additional cost (typically much less than having an attorney prepare the form).
4. Publish a Notice to Inform the Public of the DBA
Seven states require the company to publish its fictitious business name in an approved newspaper or recognized legal publication once the DBA is approved. Those states are California, Florida, Georgia, Illinois, Minnesota, Nebraska, and Pennsylvania.
Generally, an LLC’s DBA notice must contain the assumed name, the legal name of the LLC, the LLC’s state of formation, and the principal business location. LLC members should verify which types of publications are approved for DBA notices and what information they need to provide about their company and the fictitious name.
Public notice of a DBA is meant to provide transparency to consumers, vendors, creditors, etc. about who operates the business under the assumed name. That information is useful if someone wants to check the credibility and integrity of the business e.g., detect legal judgments against it, view its online reputation, or check its credit rating.
5. Keep Track of Renewal Requirements
Some states do not limit how long an LLC may use a DBA. But other states set an expiration date and require a business to renew its assumed name after a certain period of time.
Consequences of Failing to File a DBA
If a Limited Liability Company fails to register its assumed name, it could face fines and other penalties. Another risk of non-compliance is the inability to enforce contracts in the DBA’s name or bring suit for breaches of contracts. Even more potentially detrimental is that the owners of an LLC may be considered personally liable for any debts or lawsuits brought against their business if they don’t comply with their state or local governments’ assumed name laws.
Do You Need to Set Up a DBA for Your Existing LLC?
You can rely on CorXec to get it done fast! We’ll save you the hassle of researching your state’s requirements, filing the paperwork, and correcting any errors you might have made in your submission.
