What is a DBA and why might your business need one?
Updated August 30, 2024 | Published December 19, 2023 by Angela Talbot | Reading Time: 3 minutes
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- Business
DBA Definition
DBA is an acronym meaning 鈥淒oing Business As.鈥� It鈥檚 a way to label your business with a name that is different from your legal business name. It does not provide protection for your business name so that others can鈥檛 use it. A DBA is also not a type of business entity like a sole proprietorship or LLC.
Applying for an will protect your business name at a federal level. Remember when choosing a DBA name that you cannot choose a name trademarked by someone else. So, before you choose your name, do your research to make sure it isn鈥檛 already being used.
How to start a DBA
In Massachusetts, to start a DBA you need to apply for a business certificate in the town or city where your business is located. In the , there is a certificate form for sole proprietorships and partnerships, and a separate form for corporations and LLCs.
The certificate serves to create a public record of your DBA name but is not a tax designation. Businesses operating as DBAs will need to apply for an Employer Identification Number (EIN) also called a Federal Tax Identification Number. Getting a DBA and EIN allows you to open a business checking account.
Why might your business need a DBA?
There are several reasons a business owner might want to operate under a DBA name. Each reason is unique to the business鈥檚 needs, but here are a few examples:
Marketing
Joe Smith has a landscaping company with the legal name 鈥淛oe Smith Landscaping 91黑料网鈥�, but he wants to operate under the name 鈥淕reen Thumb Landscaping鈥� for branding and marketing purposes.
Brand recognition
A business with a name like 鈥淚sabella Robertson Interior Design Studios, LLC鈥� is a bit long. So, she wants to use a DBA name that鈥檚 shorter and easier for people to remember and recognize. She applies for a certificate to use the name 鈥淗ome Sweet Home Design鈥� instead.
Expansion
A pizza shop called 鈥淎nthony鈥檚 Pizza鈥� had one location when they started but has now expanded to include new locations in different towns. To keep each shop鈥檚 revenue in separate accounts, they use a DBA name to define which location the account is for. Like 鈥淎nthony鈥檚 Pizza, DBA Anthony鈥檚 Pizza, Worcester.鈥�
Likewise, a business registered as an LLC or Corporation may want to start a small business on the side. For example, a catering company that does dinner services could set up a DBA for another company that strictly bakes wedding cakes – 鈥淒avis Catering DBA Elegant Cakes.鈥�
Identity Protection
If the name of the legal entity contains the owner鈥檚 name, like 鈥淛osh Miller Photography鈥� they may want to use a DBA name to keep their identity private and operate under something like 鈥淪ay Cheese Photography.鈥�
Professionalism and Legitimacy
Sue Johnson is a hairdresser with no employees who operates at her home salon. She wants to do business as 鈥淪ue鈥檚 Hair Salon鈥� to seem legitimate and make it easier for people to find her.
Cost and ease
Filing fees for a DBA certificate vary by town and city but can cost anywhere between $10-$100. Filing in the . In comparison, the with additional annual fees.
Opening a business account
A sole proprietor or partnership may want to start a DBA just to open a business bank account. A self-employed author, for example, may not want to use a business name different from their real name. However, in order to open a business account at a bank or credit union, it may be required to register a DBA certificate.
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