DBA’s: All You Need To Know
As a business owner, it is always important to understand what can be an advantage to you. If you are looking to expand your business by trading goods or including new services, then setting up a DBA for your business can help you with that. Registering a DBA can be easy, but there are a lot of things to consider before you dive right in and do it. Here are a few things that you need to know before registering for a DBA.
While this may seem like an obvious step for registering a DBA, it isn’t actually as easy as it might be. You first need to come up with a name that cannot be similar or the same as an existing business and the name has to be a fictitious name. This fictitious name can be used as a trade name or nickname for your business and it needs to leave a good impression. You can use tools such as a business name generator to help your brainstorm ideas that are unique and relatable to your business.
There is a registration fee for DBA’s and it can be anywhere between $10 to $100, depending on the state that you are registering in. The states that don’t allow registrations for DBA’s are Kansas, South Carolina and New Mexico. When it comes to registering your DBA and paying the fee, you have to comply with the rules and regulations set out by that particular state. You may also need to apply directly with the state government or the clerk’s office. Read more about the state guides online and what is needed to apply for the state that you wish to register in.
The main benefit of getting a DBA is that you can use a fictitious name for trading and services without having to create a new legal entity. Another benefit is that if your business is a sole proprietorship, you do not need to use your surname as part of your DBA, which means that your real name is private to the public eye. A great advantage for your business is that payments can be made under your DBA, plus you can set up a separate bank account for your professional financial assets.
As we have listed the pros of getting a DBA, there are also cons too. By having a DBA, it doesn’t mean that your businesses assets are protected in any way. In fact, this is only a benefit for you if you obtain an LLC for your business. Another disadvantage is that many business owners believe that a DBA is a type of business structure, when it is not. A DBA is just an open door that grants you the opportunity to have an additional name for your company, along with the benefits listed above.
Getting a DBA can be especially beneficial to a business that is listed as a partnership or sole proprietor that is looking to operate under a fictitious name, rather than their actual names. However, it is advised for those two types of business to have a low risk and profit, so that they can benefit from it.
If you are looking to expand your business in general and you want to go online, then it is advised to obtain a domain at the same time when you have registered your DBA. That way you don’t have to face any challenges along the road to your expansion.
Getting a DBA can benefit clients also, as it can make it memorable for them to remember your business. Your legal entity name may be too long or complicated, but by having a DBA it can make it easier and gives a second chance to leave a good impression. While there are some cons for getting a DBA, it is outweighed by the pros.