Definition of DBAs / Doing Business As - What You Need to Know
What's in a name? When it comes to a business, many times the name of the business does not reflect the actual name of the owner of the business or the name of the individual or company that is legally responsible for the operation of the enterprise. In most cases, the name is listed as a DBA, a legal term denoting the responsible company or individual is doing business as the name on the storefront.
Most business owners will give their business a name that reflects the nature of their business or the type of products or services being purveyed. For example, most restaurants will have a name that reflects their location or the type of food they serve instead of the name of the registered business owner. When a person files the required documentation for their business they may have to register:
- Trade name
- Assumed name
- or Doing Business As name
In most states, the name as the responsible party for the business becomes the name of the business by default. The business owner will need to list any name they plan for their business and, in many states, will have to file that name with the state or county taxing agency.
Legal forms require owners' real name
Any time a person opens a business, whether operating from their home, online or from a brick and mortar storefront, their name will need to be listed on all legal documents. Documents requiring the name include:
- Tax identification
- Business and professional licenses
- Building and zoning permits
The name chosen by the owner under which they will conduct business can be included, but the legal owner of the business, whether an individual, partnership or corporation will remain the official legal name of the business.
Business with what could be termed a fictitious name, often give no hint as to the ownership of the business or the entity that is legally responsible for the business. For this reason, companies are required to list those that are responsible on the business forms to help protect the consumers against the potential for fraud. Owners will be required to file DBA information with many state and federal agencies.
Business ownership offers varied tax implications
The one thing a new business owner needs to understand is that the type of business they have will determine any tax benefits they are eligible to receive. For example, a business being operated a sole proprietor will see do separation between the business and personal finances. With a corporation, financial information about the owners and officers is separated between personal and business matters. Other business types include:
- Limited partnerships
- LLC - or Limited Liability Corporations
Each type of business has distinct financial and tax advantages and responsibilities and before making the choice about the type of business you open, it is advisable to confer with a business management attorney to fully understand your liabilities and responsibilities for each.