What is a DBA?
What is a DBA?
A DBA stands for “doing business as”, and can be referred to as a “trade name” or “fictitious name” for a company, partnership or sole proprietorship. It’s like a pen-name or pseudonym, but for companies or others doing business in a state.
When Do You File One?
Anyone that conducts business in a state, must inform the state (or states) they are doing (or conducting or transacting) business in.
Are you a partnership or sole proprietorship? In most states, you must file a DBA in the state you are doing business.
Do you own a company, such as a limited liability company (LLC) or corporation? The act of creating a company in a state informs the state of your doing business and therefore you do not need to register a DBA, unless one of two circumstances arise:
- You want to do business using a different name than the actual legal name of your company; or
- You are doing business in a different state (or states) than the one where your company was formed.
This is the source of much confusion for many people. A DBA is not an entity, in of itself. It relies on something else that is actually conducting business, such as a real person or a real company. The DBA is illusory. My name is “Laurence.” If I wanted to do business as “Larry,” I would need to file a DBA. Larry is not a new person, just another name for “Laurence.” A DBA functions in much the same way.
If I own “Laurence, LLC,” a New Mexico limited liability company and I wanted to do business in Texas as “Larry,” do I just file a DBA in Texas? Surprisingly, the answer is “no.” This is another source of confusion. Because in this example, my company is a New Mexico LLC, I must first register my New Mexico LLC as a “Foreign LLC” in the State of Texas. Since my LLC is named “Laurence, LLC”, I then file a DBA in Texas for “Larry” (and cross my fingers that someone in Texas doesn’t already have a company registered named “Larry,” otherwise Texas won’t let me file “Larry”).
Therefore, the lesson here is that for a company, you must register it as a “Foreign” entity in every state you’re doing business, outside of the state where your company was originally formed and registered. If you’re going to do business in such a state, using a name other than the real legal name of your company, then you file a DBA in such states.
Totally confused? Let me confuse you further: There is no “fictitious name” statute in the State of New Mexico, so everything I said regarding DBA’s above doesn’t apply in the State of New Mexico. In New Mexico, you simply do business under whatever name you want to use. No registering the DBA. This is definitely not the case for almost all other states.