For entrepreneurs launching their first business, there are a seemingly overwhelming number of legal issues to sort out early on. Chances are you are unacquainted with all the ‘legalese’ being thrown around—whether its deciding between an LLC or an S-Corp or filing for a DBA. The good news is that you will not have to go to law school just to get your business up and running. The experienced counsel at LOVE LAW FIRM have provided the following guide to demystify the DBA acronym and help you weigh out the pros and cons of obtaining one for your entity.
DBA is a shortened term for “doing business as.” Obtaining a DBA is a method of granting your business, or a subsection of your business, an alternative moniker than its officially registered name or your own name. Although it is important to note that a DBA does not offer the same liability safeguards that an LLC or S-Corp do. If you are a small business owner operating only with a DBA, your personal assets remain at risk.
With an entity, a DBA can revamp your marketing efforts and establish a sustainable brand presence in your given industry, it can also establish a new line of business that you are entering into. A DBA is essentially a corporate alias that you can leverage in a promotional context for your goods or services in a way that may not be possible with your official name. Think of obtaining a DBA as being comparable to Bruce Wayne fighting crime under the name Batman. Based on your particular jurisdiction, DBAs may also be referenced as ‘fictitious names’, ‘trade names’, or ‘assumed names.’ These terms can be used interchangeably and stand for the same thing.
The process of registering a DBA is relatively inexpensive and simple. With that being said, it is essential for business owners to understand that although there are several advantages of obtaining a DBA, it is not a formal corporate structure and does not provide any type of protection from liability. Put simply, obtaining a DBA makes your alter-ego official, but it will not protect you or your personal assets in the event of litigation.
Is a DBA Right for Me?
Obtaining a DBA is certainly not a requirement for all businesses, but it can be a profitable strategy in certain cases. For businesses that foresee providing services using a different name other than their officially registered title, getting a DBA is a must.
There are multiple reasons why a DBA may be the ideal fit for your entity. For instance, you may be attempting to rebrand your existing LLC or corporation and merge into a new industry niche. A DBA allows you to pursue a different initiative than your official business name may otherwise imply. For instance, say your dog walking business, Bob’s Walk-Along, simply isn’t bringing in enough revenue to foot the bills. You can get a DBA for a new dog-grooming service, Bob’s Cutz, to help generate more revenue. A DBA can also help you protect your personal privacy. Because unregistered businesses such as sole proprietorships and partnerships feature the owner’s personal name, it may be advantageous to use a DBA to establish a non-personally identifiable title that is more closely tied to what your business has to offer as opposed to who you are.
Filing a DBA in New York
The specific process for filing for a DBA is dictated by your business structure. DBAs for sole proprietorships and general partnerships have be filed with the county clerk in the county where the business is physically located. For LLCs, corporations, and limited partnerships, DBA filings have to be made with the New York Department of State (NYDOS).
Here’s a closer look at how you go about filing for a DBA in New York:
The first thing you need to do is come up with a list of names that you want for your DBA. Ensure that the name is not generic—not just to optimize marketing initiatives, but also due to the fact that your DBA application may be returned if the title is too close to a preexisting name.
The next step is to conduct an assumed name search on the Corporation and Business Entity Database (https://apps.dos.ny.gov/publicInquiry/). All you need to do is enter your potential DBA name in the search field to see if it is available. Be aware that there are certain restrictions for New York DBAs. The below list of terms cannot be incorporated into your DBA without the express consent of the Superintendent of Financial Services:
You are also prohibited from using any words as part of your DBA that would imply that your business is a government entity. For instance, avoid using terms or phrases like “Secret Service” or “FBI”. Additionally, you cannot use professional designations as those are controlled by the department of education in NY. After you’ve finished the New York assumed name search, hop on TESS (Trademark Electronic Search System), the USPTO’s trademark search. This search engine checks to see if anyone previously trademarked your potential DBA.
Managing Your DBA
Change your mind about your new DBA? Want to tweak it as part of a marketing strategy? You can modify your DBA by filing a Certificate of Amendment of Certificate of Assumed Name form or, alternatively, you can fully withdraw your DBA by submitting a Certificate of Discontinuance of Assumed Name form.
A DBA can be a legitimate marketing strategy for a business owner. It can provide consumers better understanding of your offerings. It can help protect your privacy or disassociate you from another identity on some level. Be sure to talk to us at LOVE LAW FIRM about why you’re wanting to obtain one and how we can help.
Francine E. Love is the Founder & Managing Attorney at LOVE LAW FIRM PLLC which dedicates its practice to serving entrepreneurs, start-ups and small businesses. The opinions expressed are those of the author. This article is for general information purposes and is not intended to be and should not be taken as legal advice.