What is the purpose of having a DBA?

Jason (P) David
Jason (P) David
Last Updated: April 15, 2021
Date Published: April 14, 2021

A DBA (Doing Business As) name is a fictitious business name, trade name, or an assumed name, that the legal owners of a business register with the state.

The purpose of a DBA is to let the public know that a business entity is doing business under a different name, other than their legal name.

There are no limits to the number of DBAs a business can use, as long as the DBA name is legally registered.

DBA name registration is usually done at the State level in which the company operates.

The DBA name is something other than the names of the legal owners of the business (for sole proprietors and partnerships) or the business name the owners listed on the formation paperwork (for LLCs and corporations).

One common misconception is that a DBA is a type of business structure or business entity, but this is not true.

If you register a DBA without forming an LLC or corporation, your DBA name will automatically be registered as a Sole Proprietorship.

Keep in mind that a sole proprietorship doesn’t offer any limited liability protection because it is not a separate entity from you, as the business owner.

You are liable for both your personal and business assets should your business file bankruptcy, be sued, or owe money that it can not repay.

Collectors can come after you personally for the liabilities of your business.

This is why many small business owners form and LLC, because it offer personal liability protection.

After you have formed a company, you will then need to register a DBA if you are using a name other than the legal name on your formation documents.

To learn more about DBA’s, visit our in-depth article here.

To learn more about the different business entity types, visit our guide here.