When you go into business, you may hear a lot of acronyms being thrown around. One of these acronyms is “DBA.”
I wanted to talk about DBAs because there’s some confusion about whether a DBA is a separate business entity and whether you need to get a DBA in the first place. I’ve even had clients tell me that banks insist that they get a DBA before opening a bank account--you don’t need a DBA for this!
A DBA stands for “doing business as.” It’s also called a “fictitious business name.” You get a DBA when you want to run your business under a name that is different than your legal name. If you don’t have a business entity, your company’s legal name is your own personal name. If your name is Jane Doe, that is your legal name. If you want to run your business as, “Jane’s Pie Shop,” you need to get a DBA as “Jane’s Pie Shop.”
If you have a legal entity, your company’s legal name is the name of your legal entity. Let’s say you have a LLC named, “Jane’s Fabulous Foods, LLC.” Jane’s Fabulous Foods, LLC is your legal name. If you want to run your business under a different name, you need a DBA.
I had a client that created a LLC and intended to run different restaurants under that LLC, so she needed to get different DBAs for each restaurant that she ran. For example, let’s say Jane wanted to run two separate restaurants under Jane’s Fabulous Foods, LLC, Jane’s Coffee & Bagels and Jane’s Pie Shop, she can do that by getting two separate DBAs.
You can get multiple DBAs regardless of whether you are running your business as a sole proprietorship, a partnership, a corporation or a LLC. However, it is important to keep in mind that getting a DBA is not the same as creating a business entity--i.e., a LLC or corporation--and does not protect you against personal liability. A DBA is only a fictitious business name, which lets the public know that you are doing business under a different name.
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