Why Form a DBA?
June 9, 2015 by mercy · Leave a Comment
A business is required to file a DBA when the name of the business is not the owner’s name. For example if you call yourself Bob Smith Landscaping you do not need to file a DBA . If you decide to call your company Branches and Bushes Landscaping then you must file a DBA with your state. Nowadays filing for a DBA can be done online on the county recorders website. Once the DBA is filed the county will send the business owner and original recorded DBA document. Be sure to keep this handy and easily accessible. There are many benefits to filing a DBA.
By choosing a descriptive DBA name there is no doubt about what the business does. The public will know what the business does simply by the name of the business. And choosing a particularly catchy name will help the public remember the business all the more.
Money Management
A filed DBA allows the business owner to open a bank account in the business name. In addition the business owner can write and cash checks in the name of the business. This helps keep the business separate from personal funds. Keeping the two entities separate will make filing taxes much easier. Keep in mind most banks will not allow a business owner to open a business in a name other than their own without filing a DBA. So be sure a copy of the DBA papers are brought to the bank when opening a business account.
Contracts
Having a DBA allows the owner to enter into service contracts in the business name. Without the DBA filing the business owner’s personal name would have to be used. This is an excellent way to protect the personal name.
Advertising
Forming a DBA allows the owner to use the business name in advertisements and on business cards. In addition, marketing promotions can be centered around the business name too. In this way name recognition is established which can lead to increased business.
Name Protection
Filing a DBA lets other know that this business name is being used. As a result competitors cannot use your name legally.
Multiple Businesses
A corporation can run many different businesses with DBA names. This prevents the corporation from having to create a legal business entity for each business. For example, a business owner can incorporate and set up a restaurant. If the business owner decides to expand and open other restaurants, each new restaurant can be filed as a DBA under the parent corporation. As a result the business owner saves quite a bit of money in terms of incorporation and filing fees.
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