In this video, you’ll get answers to these questions:
- What is a DBA?
- Why would you want a DBA?
- Who can get a DBA?
- How do you get a DBA?
- How long does a DBA last?
- What is an assumed name? (Minnesota)
- What is a fictitious business name? (California)
- What is a trade name? (Louisiana)
- What is the difference between a DBA, assumed name, fictitious business name, and trade name?
- What does “also known as” mean?
- What does “formerly known as” mean?
Video Transcript
What is a DBA? You will get the answer to that question and other questions like, why would you want a DBA? Who can get a DBA? How do you get a DBA? How long does a DBA last? What is an assumed name? What is a fictitious business name? What is a trade name? What is the difference between a DBA, assumed name, fictitious business name, and trade name? What does “also known as” mean and what does “formerly known as” mean? I’m Aaron Hall. I represent business owners and entrepreneurial companies as a business attorney. If you’re a business owner, these educational videos are for you to help you spot issues to discuss with your own business attorney, not as a replacement for an attorney.
I want to help you avoid legal problems and grow a great company. Now, if you haven’t downloaded yet, you can get my free resource, “Seven Common Legal Mistakes Made by New Businesses.” I create these videos to help you avoid problems and that free cheat sheet will cover seven of the most common mistakes that new businesses make so make sure you get that. It’s free. You can get it at aaronhall.com/free.
All right. What is a DBA? DBA stands for “doing business as.” You might think of it as an alias or a nickname for a business. For example, let’s say you have Apple Corporation. Well, it might have a DBA called Apple, or it could have a DBA with some totally unrelated name. What is an example of a DBA? One example is when you set up a company for one purpose, and then you decide later, we need to change the name a little bit to have a broader purpose. But rather than actually going in and changing the name, you decide, “You know what? Let’s just create a new name.”
What is an example? Maybe you have a company called Dave’s Plumbing Service, but over time you start selling plumbing supplies as well. Well, you don’t want it to say just service. You would like to have it be supplies as well. So maybe you decide to add a DBA or an alias of Dave’s Plumbing Supplies and Services, or maybe it is Dave’s Plumbing Center, or Dave’s Plumbing Resources, all of your service and product needs in the area of plumbing, something like that. So instead of creating a new name, you can just create a DBA. Why would you want a DBA? Usually, it is because you don’t want to use your legal name in advertising or in contracts or other communications to public customers or people, you are entering contracts with. So, in other words, if you aren’t going to use your legal name, the only way you can use a different name is through a DBA. So, you set up the DBA, you follow the requirements of the law to get that officially registered, and then instead of using your company name, you can just start using the DBA. Why is that? A DBA is registered in the state where you operate, and anybody can go look up to find out what company is affiliated with that DBA. And so, because the world is on notice with that public registration, you are allowed to use different names. For example, let’s say I had Powers Auto Parts. But then, we decided, “You know what? We want to just call it powers.” Well, you can’t just call it “Powers” unless you have changed the name or set up a DBA for “Powers.”
How do you get a DBA? Normally, you file paperwork with the state, and it is typically the department in your state that handles business registrations. You typically have to pay a filing fee, and currently you may have to advertise in the legal newspaper with a little notice that says you have now registered a DBA for and then you list whatever your business name is. The idea there is that the world is on notice both with the public registration as well as the advertisement in the newspaper. So, if somebody later sees your DBA name, your alias, the theory is they are on notice that actually relates to a different business name because all you have to do is type in the alias into the state’s business registration website and you can see the legal name behind it.
A lot of companies do this, it happens quite regularly. You might have one company with many different business names for different industries. I will give you an example. This is a fictitious example. A business owner might say, “The company’s name is Bowers Marketing for Lawyers.” But then, the company decides they want to get into servicing doctors as well. So, instead of changing the name, and instead of creating a new company, the company just sets up a DBA— Bowers Marketing for Doctors. And then it might be Bowers Marketing for Architects. And so, you could have a lot of different company names that all relate to the same company. A DBA does not create a new company. It is simply a nickname or an alias for a company that already has a name. For example, in the United States, a person might go by Robert, Rob, or Bob. The idea here is that they have nicknames, but it all means the same person. We are not duplicating the person; it is simply nicknamed for the same person. Legally, you are allowed to have nicknames for different companies, that is a DBA.
How long does a DBA last? It depends on the state but usually, it is indefinite as long as you continue to renew it if your state requires annual renewals.
What is an Assumed name? Assumed name essentially means DBA. Some states use the word assumed name instead of DBA, Minnesota is one example. If you have a company, and you want a DBA, you want that company to do business as another name, you need to set up an assumed name. In Minnesota, it is just a separate form, or it is a form that you file with a state. You don’t, in Minnesota, file a DBA form. You file an assumed name registration.
What is a fictitious business name? That is the same thing as an assumed name or a DBA. Some states like California, call it a fictitious business name, but it is the same thing as we have been talking about here.
What is a trade name? Well, there are some states like Louisiana that call a DBA a trade name, so it means that in Louisiana it means the same thing as a DBA or an assumed name or a fictitious business name in Louisiana.
Trade name is just a reference to a DBA, but a trade name might also have trademark implications under Federal Trademark Law. So, a trade name often can mean a person has acquired a trademark, maybe a common law trademark or a registered trademark so that particular term cannot be a little confusing, and it depends on the context in which it’s used.
What does “also known as” mean? Well, you might have a company name like Bowers Electrical, and it might also be known as, or also known as Bowers Heating and Air. So, in other words, “also known as” is just another way to reference that there is a company and they have a fictitious name or a DBA, or an assumed name or an alias. So, if you would like to draft a contract and you wanna reference both the official name of the company and their DBA, you would put their company name, also known as, and then whatever the DBA is that they’re known for.
What does “formerly known as” mean? Formerly known as means that at one point the company used a different name, but they don’t use that name anymore. Maybe it is because the company is out of business, maybe the DBA registration expired, maybe the company changed its name and now has a new company name. “Formerly known as” simply means there was another name that the company was known by, but they no longer have an active registration or active state permission to use that name.
All right, so what is a DBA? A DBA is an alias. It is a nickname for companies, and it is a nickname that’s been registered with the state, and that the fee has been paid. All the other procedural requirements are maintained, and now the company can publicly go by their DBA or their new alias or nickname.
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