2 min read
When are D/B/A's great for your business?
If you want to use a name for your business that's different from your LLC's name, you can use a "doing business as" (d/b/a) or "fictitious name" to do so. In some cases, it can be an important step in creating your LLC.
This can be helpful for businesses that have a unique or creative name they want to use in their branding and marketing efforts. For example, if you had an LLC called "Lawn Care, LLC" and wanted to use the same business entity for a different purpose, like dog walking. You could file a d/b/a for "Dog Walkers 4 U" and then have your LLC "do business as" Dog Walkers 4 U.
How to File the D/B/A for your LLC
First you need to identify the state where you'll be doing business with the d/b/a. For example, if Lawn Care LLC operates in Missouri and Illinois, and Dog Walkers 4 U will only operate in Missouri, then I'll only need to file the D/B/A form in Missouri.
Next, find the d/b/a form (if you can't find it, try searching for "fictitious name"). Fill it out and use your LLC as the company the name will be "doing business as." And that's it! It takes a few minutes, you can do it on your own, and it usually costs less than $20.
But don't forget, make sure to watch for renewals as well.
Why Filing the D/B/A is Important
If you’re operating your business under a different name than your own or the entity’s name--without a d/b/a--you could incur penalties ranging from a small fine, inability to enforce contracts, to actual criminal charges.
While a small fine isn’t the end of the world, not being able to enforce a contract would be a nightmare. Imagine that you sign a contract using your fictitious business name and later the other contracting party doesn’t perform. If you didn’t have a d/b/a, there’s nothing indicating who the contracting party was--you “legally” just made up a name out of thin air. So, that could be a huge problem.
The criminal charge would also be terrible. Although I find it difficult to imagine a prosecutor pursuing this, the law makes sense--it ensures consumers aren’t just defrauded by fake business names.
D/B/A Example - What Happens if you Don't File for One
Will set up his LLC as William Bone, LLC. His company went by “Salesly” however. Will signed all his contracts under Salesly’s name and advertised to the public that their business name was called “Salesly.” Will got into a conflict with a contractor who did a terrible job building Will’s website, so Will didn’t pay the contractor the full amount. The contractor hired an attorney to sue Will for failing to pay the full contract.
The contractor’s attorney looked at the contract and checked the state records and saw that Will had never filed a d/b/a for Salesly. As a result, Will was unable to enforce the contract and now had to worry about potential criminal implications. Will could’ve avoided all this by filing a $7 d/b/a with his state.
Do you need a lawyer for this?
The biggest question now is, "Do you need to hire a lawyer for help?" Sometimes, yes (especially if you have multiple owners). But often for single-owner businesses, you don't need a lawyer to start your business.
Many business owners instead use tools like Legal GPS for Business, which includes a step-by-step, interactive platform and 100+ contract templates to help you start and grow your company.