When you're in the earliest stages of starting your business, you'll have to decide how you want to register it. Depending on the type of business entity you're forming, you may be required to register a DBA.
Below, CNBC Select walks you through everything you need to know about DBA's and whether it's right for you.
What we'll cover
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What is a DBA?
DBA is an acronym that stands for "doing business as." It's used when the name of your business will be different from your name as the owner. However, certain entities where the business name will be different from your name are not required to register a DBA.
Who needs a DBA?
There are some business entities where a DBA is required if the owner wants to come up with a name for the business other than their own. But some states may also have requirements for DBA's, in which case you'll want to follow your state's guidance.
- Sole proprietorships: Sole proprietorships don't typically need to be officially registered since all the business income flows through the owner's personal income tax return. In this case, your "business name" would automatically be your own name. But if you'd prefer to have your business name as something else to establish a separate brand identity, then you'd need to register a DBA.
- Partnerships: A partnership is a type of business that has more than one owner and they all share the profits (and losses). However, unlike with a multi-member LLC, partnerships do not have limited liability protection from the debts and bankruptcies of the business. Similar to sole proprietorships, partnerships don't have that legal separation between the business and the owners so if the owners want to operate under a name that isn't theirs, they'll need to file a DBA.
- Franchises: Franchises may not always require a DBA but if you're someone who starts an LLC to own multiple franchises, it can be a good idea to file a DBA so that each franchise can operate under a name that's different from the LLC (like their widely-recognized, branded name). Some franchise agreements might actually require the owner to operate under the branded name, in which case there's no getting around filing a DBA even if you're only operating one franchise.
- Business owners in a state that requires a DBA: There are only 13 states that don't require businesses in their state to register a DBA. Those states are: Alabama, Alaska, Arizona, Delaware, Florida, Hawaii, Kansas, Maryland, Mississippi, Nebraska, Ohio, Wisconsin and Wyoming. If you're running your business out of the other 37 states, you'll need to file a DBA.
How do you file a DBA?
Business formation platforms like ZenBusiness and LegalZoom offer services to help you file your DBA. Prices can vary but LegalZoom's prices start at $99 + state filing fee. ZenBusiness's pricing starts at $95 + state fees.
ZenBusiness can only support DBA filings for 20 states including:
- Colorado
- Idaho
- Illinois
- Indiana
- Iowa
- Maine
- Michigan
- Mississippi
- Missouri
- Montana
- New Hampshire
- New Jersey
- New York
- Ohio
- Oklahoma
- Oregon
- Rhode Island
- South Dakota
- Texas
- Utah
ZenBusiness
Cost
$0 + state filing fees for Starter plan; $149/year + state filing fees for Pro plan; $299/year + state fees for Premium plan
App available?
Yes
Standout features
ZenBusiness offers a wide selection of services that range from formation offerings to compliance, managing your finances and building a website and logo.
Pros
- Order processing within one business day available for Pro and Premium packages; otherwise order processing takes 7–10 business days
- Offers business document templates (included within the Premium plan only); other plans pay an additional fee for access
Cons
- Charges a base price plus state filing fee for some pricing plans; some competitors only charge a state filing fee
LegalZoom (Small Business Services)
Cost
$0 + state filing fees for Basic plan; $249 + state filing fees for Pro plan; $299 + state filing fees for Premium plan
App available?
Yes
Standout features
LegalZoom offers all sorts of services to help you register your business, fulfill annual reporting and licensing requirements and protect your business with trademarking, copyrighting and assistance from attorneys.
Pros
- For the Basic plan you'll just pay the state filing fee
- Well-known brand in the industry
Cons
- LegalZoom charges additional fees for some services even with the Pro and Premium plans. For instance, LZ Books is free for one year then $9.99/month after; the Business Attorney plan for Premium is free for 30 days then $49/month after
- Registered agent service is quite pricey at $249/year
However, you can also file your DBA on your own — it just might take a little bit of research. You'll want to start by performing a search to see if your desired name is available in your state or if it's already been taken. You can do this by going to the Secretary of State and using the business entity search tool, or you can go to sites like Northwest Registered Agent and Bizee, which also have business name checker tools.
Then you'll go to your local county clerk's office or website to file your DBA. You'll also pay a filing fee, which can vary depending on your state. Some states charge a filing fee of up to $100 and an additional fee if you'd like copies of your certificate.
If you need to change anything on your DBA or choose a new name, you may need to pay an amendment fee as well.
FAQs
What's the difference between a DBA and an LLC?
An LLC is a type of business entity that separates your personal assets and liabilities from your business's. A DBA is not a legal entity. It's just the name you register your business as.
What are the advantages of a DBA?
A DBA can make it easier to open a business bank account, allow you to separate your business brand from your personal brand and help you stay compliant with your state's laws.
What are the disadvantages of a DBA?
A DBA doesn't offer any protection for the owner's personal assets and liabilities. Without any liability protection, your personal assets can be impacted by any lawsuits and financial judgments against your business.
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