What is a DBA Name
A DBA name is a legal form that must be used anytime a firm operates under a name other than its officially registered name. In some states, DBA names are referred to as trade names, fictitious business names, or assumed names.
While DBA names are particularly beneficial to specific business structures, such as sole proprietorships or conventional partnerships (since you can avoid using your name as your business name), they can also benefit a limited liability corporation (LLC) or another legal entity/business type.
Which Companies Make Use of DBAs?
A business entity may find it advantageous to have a DBA based on certain variables, such as the type of business. Before we go into the organizations that might benefit from a DBA, remember that not all business types require one. Consider hiring a DBA if your company fits under one of the following categories.
Sole Proprietorships and Partnerships
If you are a lone proprietor or in a general partnership, you should consider obtaining a DBA so you may operate under a name that is not your or your partners legal name. The reason for this is that these two business categories are unincorporated.
This implies they do not have to file entity formation paperwork or choose an entity name with their state. The basic line is that these firms are the same entity as the owner, which means they have the same name unless a DBA is used.
Franchises
A DBA might be beneficial to franchises as well. Although it is not compulsory, it is typical for them to obtain one to be recognized as a local business. Franchisees are often formed as corporations or limited liability companies (LLCs).
Corporations, LLCs, and Others
Although requirements vary by state, county, and even city, more sophisticated companies such as LLCs, corporations, and limited partnerships are not usually needed to obtain a DBA. This is because when these company kinds are founded, they are registered with the state. You can still obtain a DBA if you own one of these firms.
Advantages of Obtaining a DBA
Easier Business Banking
Many firms use a business checking account to assist them in managing their money. However, you may encounter difficulties if you own a general partnership or a sole proprietorship. If your company is not registered with the state, you will not have an employer identification number (EIN). You will not be able to create a business bank account if you do not have an EIN. However, when you register for a DBA, you will receive an EIN and be allowed to create one of these accounts.
More adaptability
With a DBA name, you have additional options for expanding and growing your firm.
Increased Security
A DBA name is very useful for firms named after the owner. Using a DBA name helps purchasers comprehend the service or product they are buying and protects your private information.
Branding Enhancement
DBA names allow you to target certain markets.
Domain Registration
Sometimes the domain you desire for your business is unavailable, and you must sell your services under a different name.
Expanding into New Services
You could start a firm to provide one service or product only to expand into another later.
Considerations for DBA
There are various limits to DBA names that should be considered.
Registration Depending on the state, DBA registration may be required in each county where you want to conduct business. As you may expect, this is a lengthy procedure. And, because DBAs must be renewed every few years, you will have to go through the procedure again.
Rights to Name
If you own an unincorporated business using a DBA name, another company owner who owns a recognized legal entity may use it. This may be avoided by trademarking your DBA name.
Cost
The cost of a DBA varies depending on where you live. Find out how much a DBA costs in your state.
How to start LLC in American Samoa
Setting up a limited liability company (LLC) in American Samoa can help you establish an independent legal entity for conducting business operations and holding cryptocurrencies such as NFTs. LLCs are available in states, territories, and insular areas such as Puerto Rico and American Samoa. Also known as Limited Liability Companies, LLCs are special entities created under state laws that provide liability protection to owners involved in business activities.