The definition of a DBA is a legal requirement that stands for “doing business as,” and it is needed when a corporation or sole proprietor decides to do business under a different name. A DBA is a legal document that must be filed in order for a company to make money under their different chosen name, and it has to be obtained following the procedures in the state you are filing in. A DBA cannot be used, however, to get out of legal or financial trouble by using a different company name, but you can get in legal trouble if you are operating under a different name without a DBA.
There are a couple reasons to get a DBA. For sole proprietors, meaning only one person is in charge of the business, you would need to file a DBA if the company’s name is not your own name. If your full name is in your company name, you may not need to obtain a DBA. It can get confusing, so seeking legal guidance may be helpful to understand if you need a DBA. In addition, corporations may want a DBA to operate under a different name for a different product or division. Although corporations have already registered their company name, they would still need to get a DBA if they want to operate under a different name.
How a DBA is used?
A DBA works for you to operate under a different name and helps keep the public informed of who runs what company. After you get a DBA, you can start operating under that name. You must have a DBA in order to legally operate financially under that name, like opening a new bank account, writing checks, and using contracts in that new name. You can be fined and have other legal consequences if you operate under a different name and do not have a DBA.
Benefits of Combining
The benefits of combining using a DBA is that it allows you to legally operate under that name, and you can have a more specific company name for what products you sell while still operating as the same corporation. Therefore, you can use multiple names while still enjoying the benefits of being one corporation, which may be helpful for liability and taxation purposes. DBAs are fairly easy and inexpensive to obtain, which is particularly helpful for sole proprietors, and DBAs allow flexibility for growing companies, allowing them to expand in their divisions fairly simply.
Banking Transactions
DBAs are also important for banking transactions. You need to have a DBA in order to legally have banking transactions in a new company name that is not the original legally registered name for corporations or your own name for sole proprietors. Some local banks may need you to register to get a certificate for your fictitious name in order to have an account at that bank for financial operations. This practice varies bank to bank, and your local bank can instruct you on where to register if you do need to do so.
Assistance
There are professional legal resources available to you to help you in obtaining a DBA. Because the process for obtaining a DBA can change from state to state, it may be helpful to seek professional legal help if you are unclear on what your state requires. In addition, the rules regarding if you actually need a DBA, especially if you are a corporation, can be confusing, so do not hesitate to find legal assistance if you have questions. There are consequences for operating under a new name without filing a DBA, so in order to avoid these consequences, check with a professional to make sure you are operating legally and to help you understand if you need a DBA. If you need legal assistance you can also find additional legal aid here and you can search for a lawyer here.