Incorporation 101: Doing Business Under a Fictitious Name

Incorporation 101: Doing Business Under a Fictitious Name

What is Assumed Name (DBA)?

Assumed name (also called "fictitious business name", "trade name", orDBA for "doing business as") is a legal way to do business under a particular name that you file with the county.

Its the easiest and most cost effective way to do business under a new business name without having to create an entirely new business entity. With DBA you can accept payments, advertise, and otherwise present yourself under that name.

Advantages of DBA

Cost-effective and simple way to start doing business, without ongoing maintenance or the costs associated with forming a corporation or LLC. Converting to a corporation or LLC is easy, once your business is running profitably.

As a sole proprietor it allows you to use a business name rather than your personal name. Having DBA gives your business more credibility.

It allows a single legal entity (corporation, LLC, etc.) to operate multiple businesses without creating a new legal entity for each business.

Disadvantages of DBA

As a sole proprietor having a DBA does not protect your personal assets. It is just a certificate you are legally required to file, allowing you to legally do business under a certain name, and helps you open a bank account, as an example. For real asset protection it is recommended to form a separate entity (corporation, LLC, etc).

DBA is geographically limited to the city/county where you filed it. That means you can only operate your business under that name in that county or city, and for each addtitional county or city you have to file separate DBA.

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