Scott Allen over at About.com wrote a great article on DBA’s and FBN’s – I highly encourage any small business owner or Entrepreneur read it!
FBA or FBN – Why do you want one and how do you get one?
A fictitious business name, assumed name, or DBA (short for “doing business as”), referred to as “trading as” in the UK, allows you to legally do business as a particular name at minimal cost, and without having to create an entirely new business entity. You can accept payments, advertise, and otherwise present yourself under that name. In fact, if you present your business under a name other than your proper legal name without proper notification, it may be considered fraud. Fortunately, filing for an assumed name is so easy and inexpensive, there’s really not much excuse for not filing one.
Why would you want to file an assumed name? What does it let you do?
It allows you as a sole proprietor to use a business name rather than your personal name. In some places you can use either your full name or part of your name plus a description of your product or service without filing an assumed name, e.g., Elena Garza Interior Design or J. Washington Investigataions. The exact rules vary from country to country and from state to state within the U.S., so check with your local business regulatory authority regarding your area. But if there’s any implication that there are more people involved (Shawad & Sons, The Anderson Group, etc.), or if you just use the first name (Joe’s Garage, Sam’s Boat, etc.), you have to file an assumed name….
One of the most important objectives that should be accomplished when a DBA or any business is established is separation of business and personal funds. The new business owner should get a business credit card as well as a separate business bank account. To open a business bank account for a DBA there are a few steps that need to be followed.
First the DBA should be registered with the county the business address is located in. This can either be done on-line or through the local newspaper. Many local newspapers will publish the DBA and announce the new business as well as file the appropriate papers with the county. Once the DBA is registered with the county the business owner will receive a copy of the registration form from the county. This form must be brought to the bank to open a business DBA account.
Finding a Bank
The next step to getting a DBA account is to find the appropriate bank. Be sure to shop around, as different banks will have different fees for their accounts. Keep in mind some business accounts charge per transaction or only allow a certain number of transactions a year. Remember if you deposit the days earning and the deposit consists of cash and 5 checks the total number of transactions is 6 not 1. Some business checking accounts will offer low or no fees if a certain balance is maintained and others might provide free checks. Also be sure the bank you choose will accept a DBA account.
Opening the Deposit Account
Before heading down to the bank be sure to have the following forms of identification:
– Driver’s license-if for some reason a driver’s license is not available, a passport will work just as well.
– Social Security Card
*The DBA will be opened under the personal social security number as revenues are reported through Schedule C on the personal tax returns.
In some instances a business owner will apply to the IRS for a separate business taxpayer identification number. If this is the case bring the letter from the IRS showing this taxpayer or employer identification number (called TIN or EIN for short).
*Business license, be sure to bring your business license and proof the business has been registered with the county.
Running the Business Account
Once the business account is established be sure to keep it separate from any personal accounts. When depositing customer’s payment checks always be sure to endorse them with the business name as well as the personal name. If there is any confusion as to where the check belongs, the personal or business account, the endorsement will provide sufficient identification. In addition this will also help at tax time should any confusion arise.
Whether you’re a corporation, LLC or sole proprietor, there may be advantages to filing a “Doing Business As” or “DBA” for your business.
What is a DBA?
DBA stands for “doing business as” and is an official and public registration of a business name. DBAs are also known as Fictitious Names, Fictitious Business Names, Assumed Names, and Trade Names. Essentially, a DBA is the name of a business other than the owner’s name or, in the case of a corporation, a name that is different from the corporate name as on file with the Secretary of State.
What are the benefits to filing a DBA?
A DBA makes it easy to:
• Open a bank account and collect checks and payments under your business name
• Look more professional, by establishing a separate business identity
• Start marketing and advertising under a name other than your personal or corporate name
What is an example of a DBA and how it is used?
If you were a sole proprietor named Jane Brown and the name of your business was “Donuts Unlimited,” you would register your business as Jane Brown, doing business as “Donuts Unlimited.”
I’ve already got a name for my corporation or LLC. Do I need a DBA?
If you have a corporation or LLC and want to do business under a name different from your corporate name, most states require that you file a “Doing Business As” name or “DBA.”
For example, if an LLC is doing business under the name “Studio City,” but the corporate name is “Pinnacle Projects, LLC,” then a DBA should be filed for the name “Studio City.” This DBA filing must be made in the county or state (where applicable) in which the registered office and principal address of the business are located.
What information is required for a DBA filing?
DBA filings will typically contain the name of the applicant, date of filing, name of the fictitious business and address for the business. Filings can be made by individuals or businesses. In most states, you must first file the DBA documents with the appropriate government entity, accompanied by a state or county fee. In some states, you also have to publish the name in a newspaper to give notice of the new business name.
We created a short 3 min Video showing people how to use DBAFilingOnline.com to file a DBA in 3 easy steps. Check out the video, and file your DBA or FBN online today!
If you are doing business under any name other than your given name, or your actual corporate name, you will need to file a Doing Business As (DBA) or Fictitious Business Name (FBN) Statement.
DBAs are also called: Fictitious Name Statements, Business Name Statements, Trade Names, Assumed Names and Assumed Business Certificates.