1. The Basics: What is a Trade Name Registration?
A Trade Name Registration or DBA Registration (Doing Business As) is used if you are a sole proprietor, partnership, or incorporated company doing business with a name different from your personal name or legal name. Most states and some counties require you to register your business name so customers and other companies can identify you.
A trade name is the official name used to do business. It is also known by the abbreviations DBA, D.b.a., dba, d.b.a., or d/b/a, which all mean “doing business as”.
A simple Trade Name or DBA Registration will identify the following basic elements:
- Name: name of business known to the public
- Date of Formation: when the company was formed
- Nature of Business: the types of products or services provided
- Owner Name: the legal entity or person that owns the company
- Notary Public: some states may require the signature of a notary public
As a reference, people call a DBA Registration by other names:
- Assumed Name Statement
- Assumed Business Name Certificate
- Business Name
- Business License Application
- Fictitious Name
- Fictitious Business Name (FBN)
- Fictitious Business Name Statement
- Trade Styles
- Trading Name
2. When This Document is Needed
A DBA Registration is needed when an individual business owner, partnership, or legally recognized company wants to use a more simple or attractive business name when interacting with the public. A more consumer-friendly name is often used for branding purposes, business operations, and public communications. In contrast, the company’s name listed in the Articles of Incorporation is the legal name, which is used for legal agreements and lawsuits.
Not all states require a DBA registration.
If you are a sole proprietor or individual business owner, your default business name is your personal legal name. For example, Adam Smith can only operate his business using his personal name. If he wants to operate a bakery under the name “Awesome Cookies”, he will need a DBA or Trade Name Registration because his actual legal name does not appear in the business name.
Similarly, if you are part of a partnership, your default business name is both or all of your actual legal names. For example, Adam Smith and Betty Thompson could operate a business called “Smith & Thompson” but would need a DBA registration to operate a food truck called “Tasty Tacos” because their legal names do not appear in the business name.
Finally, if you own a corporation, your default business name is the legal name officially registered with the Secretary of State. Legally registered companies must use a corporate suffix like Co., Inc., or Ltd. In contrast, a DBA Registration allows to you use a more simple or catchy trade name like “Fancy Flowers” instead of the official legal name.
|No Trade Name Registration for Legal Names||Trade Name Registration for Unique Names|
|Sole Proprietor||Sole Proprietor|
First come first served! The right to use a trade name belongs to the company that first uses it with their business operations.
3. The Consequences of Not Using This Document
Many states or counties protect consumers by requiring companies file a DBA Registration when a business name is used. Additionally, most banks require a DBA statement before allowing you to open a business bank account under your trade name.
Here are some of the consequences if you do not use a Trade Name Registration to operate your business under a unique name:
- Unable to open a business bank account or obtain a business loan
- Unable to accept payments made to your company’s business name
- Unable to advertise or market to the public with your name
- Unable to easily expand your business without creating separate entities for each one
- Personal information and accounts exposed to the public
- Business information and accounts are mixed with your personal ones
- Confusingly similar name is used by a competitor
- Trademark registration application loses weight without proof of being in business first
4. The Most Common Situations
According to the US Small Business Administration, a DBA registration is needed in the following situations when the real name of the owner(s) or corporation is not used for business:
- Sole Proprietors
- Existing Corporations
- Existing LLCs
Trade Name Registrations are usually good for five years and can be renewed at the end of that period. Be sure to check the requirements of your state and local laws.
The most common Trade Name Registration situations include the following:
- Consumer-friendly branding campaign
- Franchisee owns or operates a chain or franchise
- File a lawsuit on behalf of your business
- Create multiple businesses to the public owned by one legal entity
- Provides a record to all owners of a business of the name
- Put other businesses on notice that a particular name is already in use
- Notify consumers that the business is genuine and not part of fraudulent activity
Here are the legal names and trade names of some well-known companies:
|Legally Registered Name||Registered Trade Name|
5. What Should be Included in This Document?
A basic Trade Name or DBA Registration should answer:
- Who is the business owner and who else has an interest in the business
- What kind of goods, services, or businesses will be provided under the name
- Where is the company located and registered to do business
- When was the name first used in the state (if at all)
- How will the name be used in commerce
Some states require a fee to register a business name. Other states require the name to be published in a local newspaper so the general public is notified of the recent business name filing (i.e. California and Nebraska).