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.
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Law 4 Small Business, P.C. (L4SB), a little law now can save a lot later. A Slingshot company.
Thanks, a very helpful discussion. New Mexico is really “unique “