Sole Proprietorships: Doing Business As
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What does “Doing Business As” mean?
“Doing Business As” is a legal term implying that the trade name which a business is operating under is not the legal name of the actual person who owns the business. The actual person or organization responsible for the business files under a different or “fictitious” name, usually because the public will recognize the business easier.
Doing business as is commonly referred to as “DBA”, “d/b/a/”, or “fictitious name”. The main feature of filing under DBA laws is that the person can create a new business operation without having to undergo all the filing associated with starting an entirely new business
. DBA is ideal for sole proprietorships
seeking to expand operations.
What is an Example of DBA?
An example is if a general company, GenericCorp. LLC wishes to expand into the food business. The company may choose to do business under a different name that the public recognizes more easily, such as FoodBiz. In this instance, GenericCorp. will be held liable for FoodBiz’ activities, even though the operations are listed under the new name.
In most states, filing under DBA laws means that the company or person legally responsible for business must record both the actual and any fictitious names in the County Recorder’s Office. This is done to protect consumers and allow them to hold the correct party liable in case there are any legal violations.
In the example above, the company would need to register both GenericCorp and FoodBiz. They would need to indicate which company is liable (GenericCorp) and the name under which they are doing business as (FoodBiz). Records might read something like: “GenericCorp., doing business as FoodBiz”.
What are the Advantages and Disadvantages of DBA?
There are many pros and cons for persons or businesses who choose to file under a fictitious name. Some advantages associated with “doing business as” include:
- Creation of new business name: DBA allows a sole proprietor or small business to create and use a new business name. This is called a “fictitious name” and is different from the owner’s personal name. This may be a name that the public can recognize more easily. Payments, advertising, and other transactions can be done under the fictitious name
- Minimal costs: Filing under DBA costs as little as $10-50 depending on the jurisdiction. This is much cheaper and faster than creating an entirely new corporation. Filing requirements are different from state to state and sometimes involves publishing information on the new name in a local newspaper
- Allows multiple filings: A single business entity (i.e., LLC, corporation, etc.) can file for several different operations and do business under several different names. This is ideal for businesses that seek to expand but are still organizing under a main umbrella organization, such as those in the website or franchise business.
On the other hand, some drawbacks and disadvantages associated with d/b/a include:
- Not a trademark or copyright: A fictitious name is not the same as a copyright or trademark. While two businesses cannot file under the same name, a DBA name is not protected and can possibly copied by another business, with slight alterations
- Confusion of names: If the company files under a wrong name it can lead to fraud charges. This can happen if the organization has filed to do business under several different names. Fraud can also occur if the business intentionally seeks to mislead the public using the fictitious name.
Can I Sue a Company that is Listed under a Fictitious Name?
Yes- however, you would need to understand the difference between a fictitious name and the actual name of the company responsible for any violations of law. A fictitious name can often give no direct indication of the entity that is legally responsible for the business’ operations- only a company bearing an actual name can be held legally liable.
If you have been injured by a company that is operating under a fictitious name, be sure to conduct a search of county records to determine which company is liable, and what names they are doing business under. An attorney can help you conduct the search of county records.
Do I Need a Lawyer?
If you are seeking to create a fictitious business name under “doing business as” laws, you should contact a lawyer to determine your options. They can assist you with the filing and also may offer insight into the legal implications of choosing a particular name. If you have been injured by a company using a fictitious name, a lawyer can help represent you in a court of law.
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Last Modified: 08-29-2012 02:30 PM PDT
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