Company Name vs DBA: Everything You Need to Know
A company name is the actual name of the business, while a trade name or DBA is a way of doing business under a particular name filed in a state or county. 4 min read
2. DBA Disadvantages
3. Company Name vs DBA
4. New Corporation vs DBA
5. Trademark and DBA Differences
What's the difference between a company name vs DBA? A company name is the actual name of the business, while a trade name or DBA is a way of doing business under a particular name filed in a state or county.
A trade name can be registered by any type of business such as LLCs, corporations, and nonprofits.
A DBA is an alias and is not an actual business entity. It has to be associated with a legal entity.
- Those who are on a budget can register a DBA as it's simple and cost-effective way to start your business. There's none of the costs that are present when opening a LLC or corporation.
- A DBA lets you use a business name rather than your personal name as a sole proprietor, and it also gives your business credibility.
- You can run multiple businesses without starting a legal entity for each so a DBA let's you run a single legal entity.
- A DBA doesn't protect your personal assets. It's only a certificate which allows you to do business under another name. If you're looking for asset protection, a corporation or LLC is recommended.
- A DBA will only be valid in the jurisdiction you filed for so you can only run your business from there. If you want to operate elsewhere, you have to file for another DBA.
Company Name vs DBA
- A company usually has both a legal and a trade name. The legal name appears in legal and government forms like in the Articles of Incorporation.
- Trade names are for sales and advertising matters and can be thought of as the company's nickname.
- Corporations use various trade names to distinguish their brands if they have many products selling to various demographics.
- Some states make you register both the trade and legal name to conduct business, but it's not always a requirement. The owner has to decide if he/she wants to register both. There are advantages in doing so.
- In some states, the fact that you register a name doesn't mean other businesses won't do business under the same name. Usually, the one who uses the trade name first has the advantage of using the name, not the one who registered it.
- Even if your legal business name is different from your trade name or DBA, the important thing is that you will be able to use both names for your business.
- Try to create a catchy and easy trade name that will make a good impression on future customers.
New Corporation vs DBA
If you're thinking of starting a new business, you have to consider if you want to incorporate or establish the business by other means. Instead of incorporating, you can register a DBA. If there are multiple companies that are linked you can create a corporation with many DBAs.
If you want to go public with your company then incorporation is important. This also gives you more legal protection than a partnership because a corporation is its own legal entity. Also, if you wish to hire or raise funds then incorporate immediately.
Going through the process of incorporating is long and complex. You have to get directors and shareholders, create articles of incorporation, and know the tax implications. This is a route to take if you can handle the burden of owning a large company. Small businesses can get by with a DBA.
You can also establish a DBA to be part of an existing corporation. If you want to establish a specific company, you can create a DBA with a different name so you don't have to create another corporation. The DBAs are called umbrella companies for the corporation and will save you money.
If you have a small business, you can create a DBA with the secretary of state or county clerk and run the business as a partnership or sole proprietorship. It doesn't cost much to register a DBA, and in many states it is renewable every five years. There's also little paperwork which allows you to run a business in the simplest manner.
Trademark and DBA Differences
- DBA registration is simpler than a trademark.
- DBA is less expensive than a trademark.
- DBA is a state level protection while a trademark gives you national level protection.
- A trademark is your legal property.
- Trademarks are more than just a name and have value.
- DBA and trademark keeps other businesses from using your name.
If you need help with choosing between a company name vs a DBA, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.