A DBA (doing business as) or FBN (fictitious business name) allows small businesses to establish a legal presence in California. In order to do so, a business must register its DBA with the county clerk or recorder’s office. The process is fairly simple, and it will allow a business to execute contracts under a name other than its legal name, which is important for building a brand and creating a strong reputation.
The DBA registration process varies by county, but it generally involves choosing a unique business name, registering it, publishing it, and filing an affidavit. Depending on the county, additional fees may be associated with the registration process.
Once the DBA is registered, it will appear on any contracts that the company executes. However, the company’s actual tax status will continue to be determined by its legal entity type, which was established when it originally formed as an LLC or corporation.
While the DBA registration process is relatively straightforward, it can be time-consuming and tedious. For many entrepreneurs, utilizing a professional service can help ensure the process is completed correctly and efficiently. Such services can also assist with other business matters, including forming LLCs and corporations and obtaining employer identification numbers. Incfile is one such company that provides step-by-step instructions for registering a DBA.
Is a DBA a Legal Entity in California?
Many business owners are confused about when to file a DBA and how it differs from an LLC. As a result, they end up making mistakes that cost them money, time, and possibly even the integrity of their company.
A DBA is a legal name registration in California that allows you to use a name other than your own to conduct business. It’s also known as a fictitious business name, assumed business name, or trade name. The state of California will impose hefty monetary penalties or shut down companies that operate without the proper name registration. Additionally, banks may refuse to open business accounts with businesses that have not filed a DBA.
DBAs are typically required for sole proprietorships and partnerships that don’t want to formalize their business structure as an LLC. However, LLCs provide benefits that DBAs don’t, including the protection of personal assets from liability stemming from the company’s activities.
In addition, LLCs have tax advantages that DBAs do not, such as the ability to select a tax status. Depending on the size and nature of your business, you may want to consider an LLC if you plan on hiring employees or investing in physical office space. Using a professional service to take care of your DBA filing will save you time and money in the long run.