The Consequences of Not Filing a DBA

March 2, 2017 by  

In a previous DBAFilingOnline article entitled ‘Why You Need a DBA – It’s the Law!’ it was stated that business owners need to inform the public that they are “Doing Business As” any name other than their own personal name. It’s a requirement, and banks will not open a business account for anyone without proof of their DBA filing.

Now in terms of delving deeper into the matter of not filing for a DBA, let’s take a look at some of the more serious consequences for not filing it.

Enforcing Contracts

If you do not obtain a DBA, you will never be able to enforce a contract that you sign under your unregistered business name. For example, if you were to order office equipment, paid for them and they were not delivered, there would be no way you could claim the money back from a legal standpoint. Before you can, you have to prove first that you own the business by registering your DBA. In some states like Pennsylvania, the court has the right to fine you $500 for non-DBA registration. The fine isn’t automatic, and you can still register your DBA after you’ve already gone into business, and then come to court to insist on your rights.

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Closure of business

In many U.S. states, you can suffer sterner punishments for not registering a DBA name. For example in New Hampshire, you cannot carry out business or even advertise without a DBA. On the other hand, Colorado courts can bring an immediately close your business if you don’t have a DBA.

Bank Accounts

As previously mentioned, you can’t open an official business account without a DBA. There’s no workaround to this, as banks will be heavily penalized if they allow a business without a DBA title. Business owners separate their bank accounts from personal ones for various reasons. Contractor Calculator has enumerated several reasons for this, with the most important being to ensure clean and accurate bookkeeping.

Another important reason for opening a bank account that wasn’t mentioned in Contractor Calculator’s article is in case a business wishes to swap currencies. When dealing with international businesses, it’s ideal to have a business account dedicated for exchanging fixed-interest rate payments on debt for floating-rate payments. FXCM states that one of the benefits for a participant in a currency swap may include “obtaining financing at a lower interest rate than available in the local market, and locking in a predetermined exchange rate for servicing a debt obligation in a foreign currency.”


In some states like Missouri, people are required to file a DBA with the secretary of state’s office. Failure in doing so is a misdemeanor, which can cost you as much as $1,000. If this happens, the chances are the offender could have a difficult time finding investors if they have a misdemeanor on their record.

By filing a DBA, the business owner is protecting their business name in any state, or country, from legal matters.



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