Your business name is an important element of your business branding. If the name of your business is anything other than your legal name, the name of your corporation, or Limited Liability Company you need to register it with the appropriate government authorities. This process is known as registering your “Doing Business As” (DBA) name. Some states use other terms to describe a DBA such as a trade name, a fictitious business name or an assumed business name. In some areas, such as California, you also have to publish a notice of the fictitious name in a local newspaper for a certain period of time.
In some areas, you are not required to file a fictitious business name if it is a combination of your full name and a description of your product or service. For example, if your name was Bill Smith and you were a plumber, a DBA may not have to be filed if you named your business “Bill Smith’s Plumbing Service.” You would be required to file a fictitious business name, however if you named your business “Bill’s Plumbing Service.” I would recommend that you ask your local or county clerk to determine if you are required to file a DBA if it contains your full name and a description of your product or service.
In most cases, you file your fictitious business name with the county clerk in the county you are operating in. In some states you also have to also file your DBA on the state and local level. In most cases, your DBA has to be renewed after a certain amount of time. In California, you are required to renew your fictitious business name every five years. Re-filings are also required if there is a change in business ownership or if there is an address change.
If your business is a corporation or a Limited Liability Company (LLC), your company’s business name is already registered, and you don’t need file a fictitious business name. However, you will need to get a DBA if you plan on using a name that’s different than the name filed on your application for your corporation or LLC. This is critical because the legal protections provided by being a corporation or a LLC can be invalidated if you are operating under a fictitious name, and you didn’t file for a DBA. In addition, contracts can also be invalidated if the contract contains a fictitious name that was not registered as a DBA.
It is important to realize that a fictitious business name is not a legal entity. As a result, your legal name or the name of your corporation or LLC and not your fictitious business name has to be used on all government forms and applications including your application for your Federal tax ID number, licenses and permits.
Other than being legally required, there are a number of other reasons why you might want to have a fictitious business name. The most common reason is that the fictitious name is more relevant to the product or service that your business provides. As a result, a DBA might provide better branding potential than your legal business name.
Another popular reason for filing a fictitious business name is that it allows corporations and LLCs to operate multiple businesses with different business names. This can drastically reduce paperwork and expenses because separate corporate or LLC filings are not required for each business entity. It also allows your corporation or LLC to use business names that are more relevant to the products or services each subsidiary is providing.
Businesses with an online presence often register their domain name as a fictitious business name. They do this in order to prevent online customer confusion. This is especially important if your company name is not available as a domain name.
One other reason some businesses file a DBA is because banks and other businesses won’t do business with you unless you have one. Many banks require sole proprietorships and general partnerships to have a DBA before opening a business bank account. Some companies will not contract with a sole proprietor or a general partnership unless they have a registered “Doing Business As” name.
Another reason businesses file a “Doing Business As” is that it notifies other businesses that the fictitious name they are using is in use. Because it is on public record, other businesses are prevented from using that name in the same location.
A DBA does not prevent other businesses from using your fictitious name in areas other than the government jurisdictions you are registered with. In order to get national or international protection for your business name, you need to register for a trademark in the country or countries you are doing business in. In the United States and in other countries, it is not necessary to file an application in order to establish ownership rights to a trademark. In these cases, trademark rights are given to the company that first used the name commercially. In these cases, you usually use the symbol TM to denote that it is an unregistered trademark or a symbol SM for an unregistered service mark.
Registering your Trademark is always preferable. In the United States, you cannot file a trademark infringement suit unless you have a registered trademark. This can cause significant delays and can reduce your potential monetary rewards. Registration allows your company to potentially recover treble damages, attorney’s fees, and other remedies.
In some countries, such as Germany, your product or service has to have at least 40% market share to be able to sue for trademark infringement on an unregistered trademark. Certain countries and regions do not even recognize trademark rights arising through use. In these areas, rights to the trademark are given to the first entity that files for the trademark rather than the first one to use it in the marketplace.
In summary, there are a number of reasons why your business may need to file a “Doing Business As” name. It is important to check with your local, county and state governments to determine specific fictitious business name filing requirements in your area. If you are interested in filing a DBA, I would recommend using Legal Zoom.com.
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Written by: Mark J. Krupp, Confounder of NewBusinessCreator.com