Assumed Names, Fictitious Names, Trade Names and DBAs

The easiest way to start or grow your business

A DBA, which stands for doing business as, offers a quick, affordable option for starting a business by securing a business name and registering your business with your state; DBAs can be used for sole proprietors, partners, and corporations alike. While a DBA (also known as an Assumed Name, Trade Name, or Fictitous Name) doesn’t offer some of the financial benefits of an LLC or corporation, a DBA is still a great choice for many entrepreneurs looking to start a new company or expand their existing business.

Because DBAs don’t offer all of the advantages of incorporating or forming an LLC, DBAs typically cost less. Filing a DBA is therefore a low-cost option for small businesses that won’t require a great deal of upfront capital.

DBAs for sole proprietors

Sole proprietors, or individuals, often start with a DBA instead of an LLC or corporation. DBAs offer sole proprietors the opportunity to conduct business under the business name of their choosing while protecting their social security number—with a DBA, a business owner can obtain a Federal Tax ID number, if they wish, so that their clients and customers can make payments to their business and not to them.

Financial Considerations for DBAs

A DBA does not provide the same financial protection or tax benefits that other entity types may offer. A sole proprietor operating under a DBA still has his or her personal finances tied directly to the business's finances. Many entrepreneurs starting a business that requires a great deal of capital might stay away from a DBA for this reason and instead choose an LLC or corporate structure.

Moonlighting with a DBA

Many entrepreneurs who moonlight with a home-based business choose to set that business up as a DBA. If the business is a second job or side business, a DBA may be preferable to other business entity types. Businesses with little overhead, like a consulting business or a hobby business, may be best served by a DBA instead of a corporate or LLC structure that would typically require more paperwork and higher costs.

DBAs are often the best choice for sole
proprietors.

DBAs for corporations and LLCs

Expanding your business via DBA

It's also common for corporations or LLCs to want to use a DBA as it expands its business. A DBA allows the company to conduct its business under a name that more accurately reflects its products or services.

For example, if a business called Fourth Street Bakery, LLC wants to open up another location on Walnut Street, it can file a DBA for Walnut Street Bakery. In this case, the new location is entirely a part of Fourth Street Bakery, LLC, sharing in the financial and tax benefits. Fourth Street Bakery, LLC can operate Walnut Street Bakery with a business name that more accurately reflects its business on Walnut Street.