When should you have a DBA? (and what the heck is a DBA?)

If the name used by a business differs from the one registered with the state, or your personal name, or the name of your partners, or LLC, a fictitious business name must be filed.

Some states use different terminology for a fictitious business name. Many refer to a “DBA” (Doing Business As), but a “trade name” or “assumed business name” have the same meaning.

However, having a DBA does not provide any extra protection from financial liability. Forming a corporation or LLC is the only way to legally protect different businesses or individuals from liability in the event of a bankruptcy or other financial debt.

Many new corporations may look to expand by opening several divisions or locations, and sometimes use different names. This is also a good idea to test a product or service without having to invest on the business formation (if the product or service starts to pick up, you can always form a legal entity to manage the new business).

In some states you register your assumed name with the Secretary of State, but in most of the cases , registration is handled at the county level, and each county may have different forms and fees for registering a name. Beyond the fact that counties and cities are not very efficient handling these filings, to register a DBA filings represent less hassle than to form a corporation or LLC.

Keep that in mind and start thinking about your next DBA, assumed name, trade name or simply, a fictitious name.