What Is DBA and Does Your Business Need It?

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If you’re a business owner, you’re probably already familiar with the concept of DBA, or “fictitious business name”. But are you also convinced whether you need it or not? DBA comes from “doing business as”. It refers to the name under which a business operates, as opposed to its legal name. In today’s article, we’re going to have a more in-depth look at this concept, aiming to answer the question “What is DBA?” Moreover, we’re going to provide you with a couple of reasons why you should get a DBA for your business.

What Is DBA?

As we’ve already established, a DBA is something people have to get when they want to open a business and name it something other than their full name. This is true of most people, since an eye-catching name is rarely the name of the person running the business. The reason why you have to get a DBA, a “fictitious business name”, an “assumed name”, or a “trade name”, is because this will let the public know the name behind your business. This ensures transparency and eliminates the possibility of the same person operating more than one business under different names.

Do You Need a DBA?

You Don’t Want to Use Your Personal Name

If you want to find an interesting name for your business and avoid relying on your personal name, then you’re going to have to get a DBA. Legally, your name is also the name of your business. Getting a DBA ensures that you can do business using the DBA name instead of your legal one. However, if your name is Mark Smith and you want the name of your business to be Mark Smith’s Auto Repair Shop, there’s no need for a DBA.

A Client Requires a DBA

This can happen especially if you’re a freelancer that does business with different clients. In order to provide you with a job, some of them can ask for you to have a DBA. Still, most often than not, the alternative is to form an LLC or incorporate your business.

The Bank Asks for a DBA

In order to provide you with a loan, some banks can also ask for a DBA. Any business should have a business bank account. Which is why, regardless of whether you’re a sole proprietor or a partner in a firm, the bank can require a DBA.

You Have More Than One Business

If you’re the owner of an LLC and you want to expand your business to target more than one customer group, you should file a DBA for the second business. This is the only way in which you can own both businesses under your legal name. The DBA is required regardless of whether or not the second business you plan on opening is related in any way to the first one.

So, what is DBA? It’s a way to make sure your business is completely legal and offer transparency to all of your existing and potential customers.

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Author: Amanda Knowles

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