DBA California: Everything You Need to Know
The law states that a DBA California filing is required when sole proprietors, partnerships, limited liability companies, or corporations want to do business.8 min read
The law states that a DBA California filing is required when sole proprietors, partnerships, limited liability companies, or corporations want to do business.
Registering a DBA California allows your company to operate under a different name than what was used at the time of formation. Your company's reputation is everything. Your choice of a name will be the foundation of your brand and your business relationships. There are many reasons why you might want to start with a clean slate and choose a “doing business as,” commonly called a DBA name, other than your own name or the name you originally registered with the California Secretary of State.
Registering a DBA name allows you the right to operate a business under any name other than the legal name of the company or individual. Making this important name change can be straightforward, but there are several hoops to jump through and many considerations along the way to get there.
Is a DBA California the Same As a Fictitious Name?
Yes. In California, a DBA may be called a “fictitious business name,” or FBN. Although it's referred to as fictitious, the name is legitimate as is any other business name, whether it refers to an organization or an individual. Owners of sole proprietorships often utilize DBAs, especially when the name of the business is different from the owner's name.
The name of your business is up to you, but it needs to be properly registered with the state of California. This can be done in person in the county where you reside, or you can handle it all through the mail.
When You Need to File a DBA in California
You must file a DBA in California under certain circumstances. The law states that a DBA California filing is required any time that sole proprietors, partnerships, limited liability companies and corporations want to run operations and sign legal documents under a different name. The law was developed as a form of consumer protection to prevent business owners from avoiding liability by operating under a different name. For individuals running a sole proprietorship, you must file a DBA California any time you want to do business under a different last name, or if the owner doesn't intend to use their own last name.
For example, if John Doe formed a bakery called Doe's Donuts, he may not need to file a DBA. But if his business was going to be called John's Donuts, he would. The last name is the key. If he or she does not intend to use his or her last name, a DBA should be filed. A DBA should also be filed in California if you want to specify unnamed owners, like a store named “Johnson and Sons.”
Another example is if a business was registered in California under the name, “Jeff's Hot Dogs LLC.” Jeff, the owner of that hot dog business, wishes to change the name to “World's Best Hot Dogs.” In order to make that change, Jeff would have to file a DBA application with the county in which the business operates.
Some companies choose to use a DBA even though they may not be under any compulsory laws. Many companies launch with one set of goals, and therefore, one name, but as time goes on, they might refine their objectives and rename themselves as part of the rebranding. So, sole proprietorships are not the only ones that need to file a DBA. This is especially common in California, where tech start-ups are proliferating quickly.
You will also need a DBA if you have a division that has a narrow interest and you intend to set up a website or do business with that specialization. For example, if you own a gardening store and operate under the name “Johnson Gardening” and you want to open an online business for flowers only, you should file a DBA under the name of the website, such as "JohnsonFlowers.com."
If a corporation is registered under a certain name, the owners would only need to file a DBA form if they wished to change the name. For example, if a business was registered under the name, “Your Legal Advice, Inc.” and only operates under that name, it wouldn't need a fictitious name. However, if the owners decided to drop the “Inc.” from the name, it would be necessary to file a DBA form.
Why File a DBA in California?
Filing a DBA is one of the simplest and cheapest ways to get a business name. In California, the process is fairly simple for entrepreneurs. In fact, most steps can be completed through the mail or online. The business owner may need to file paperwork in person. You can create a separate identity (although not a separate entity) without the hassle of forming an LLC, corporation, or other structure.
A DBA is usually required for sole proprietors to open a bank account and earn money in the name of your business. DBAs also let you create multiple businesses without having to form a completely different entity. If your business wants to have multiple websites or restaurants, then you can create one ‘parent' corporation, and use a DBA for the subsequent individual businesses. This would be ideal for paperwork and tax purposes when operating multiple business endeavors.
Note however that simply filing a DBA will not change any of the tax consequences for your business. Finally, if you have an LLC or corporation, it could keep you in compliance with the law. If you execute a contract under a different name than your legal, operational name, the contract may not be valid or enforceable in the event of litigation.
Benefits of a DBA
Choosing to set up a DBA in the state of California is often a smart decision, whether you are planning to build a larger business or begin a career in self-employment. You can form a business that has the name you want, as long as it's available, even if you're starting as a sole proprietorship.
Another benefit of filing a DBA form is the option to keep your personal information out of the name of your business, which could become very well-known. You may not necessarily want everyone to know that you own a certain business. Additionally, if a business name needs to include multiple names, such as a law firm called “Jones, Smith, and Johnson,” a DBA can be helpful.
Some Restrictions on Setting Up a DBA California
You cannot add any misleading business titles such as “LLC,” “Inc.” or “Corp.” to the end of your name. These abbreviations give the impression that the business is structured in a specific manner, which has various legal and tax implications. There are strict requirements in becoming a corporation or LLC, as well as liability issues which could mislead the public if you use these monikers.
Note that filing a DBA California does not grant you exclusive rights to use that name. The only way to legally protect your exclusive use of a name is to register a trademark under that name.
How to Set Up a DBA in California
Before you get started, make sure you talk to legal counsel to make sure this is the best course of action for your business. It's important to note that all steps to form a DBA are handled through the county recorder or county clerk's office. DBAs are not issued on a state level in California. Under the state Business and Professions Code, section 17918, individuals operating businesses in California under DBA names cannot conduct any business activities under the fictitious name until the proper steps have been completed.
- Step 1: Name Check
- Make sure the DBA name is not already in use in California. You can search for information about DBA California name searches from the Secretary of State. In some counties, you can do online searches right now. There's usually no charge for this leg of the process. You can search the database provided in the local county clerk's office, submit a search request by mail or set up an account to do priority searches over the phone if you will be doing this frequently.
- If the first choice for your DBA name is not available, you will need to start over as you can't start a legal business in California with a name that is too similar to an existing business. After you come up with a new name, start the search process again to make sure it's available. A DBA name also can't include certain words with specific meanings, such as incorporated (Inc) or limited liability corporation (LLC). Your chosen name also can't mislead potential customers.
- Step 2: File a Fictitious Business Name Statement
- This is also at your county clerk's office. The forms and fees vary by county, so make sure you are in the right county before filing. Check with your county record or clerk's office to find out what the required fee is in your area. The document consists of your original name and address, your DBA name, your business address, the full legal names of registered owners, your state business ID number, and your business type. Since this form will become part of the public record, business owners do not need to include their personal phone numbers.
- The form must be notarized by an officer, partner, or member of the company, or by the owner him or herself before filing. You may be able to print the form from the county clerk's website, although some counties require business owners to pick up hard copies of the form at the office. The form must be filed with the county recorder or clerk's office within the county that houses the main business office for your company.
- Another requirement of the filing process is submitting the required paperwork within 40 days of starting the business. After completing the process, the statement will expire five years after the filing date. If a business owner wishes to change any of the information, they must file a new statement before the original statement expires. If no information has changed for the business, the owner doesn't need to republish the statement.
- Step 3: Publish Your New Name
- After you file the above statement, you must publish a DBA statement within 30 days of filing the paperwork. This statement must run once a week for four weeks in a local county publication where you do business. Before publishing your notice, check with the county clerk's office to find out if certain publications are approved for this requirement. You'll also need to give the county clerk a signed affidavit from the publication within 30 days after the final publication. Make sure that the publication you plan to publish your notice in will provide the affidavit with the county clerk's office after completing the requirement.
- Step 4: Pay the Fees
- When you submit your paperwork for a DBA, you will need to pay any required fees. The fee for setting up a DBA varies between counties. For example, the fee in Los Angeles County is $26 for the first name and $5 for any additional name. Placer County has a fee of $30 for the first name and $5.50 for any additional name.
- Step 5: Follow Up
- The statement expires five years after it was filed. You will need to refile before that date is up, but you won't need to publish your DBA California statement again as long as there haven't been any changes.
Forms to File a DBA California
Your county clerk will have all the forms that you need. In some counties, you can do online searches and submit forms online. Each county has different forms, so you will need to contact each county in which you operate to ensure you have the correct paperwork.
Get Legal Counsel
There are many legal, financial and tax implications involved in changing your company's name to a DBA in California. It's important to know that changing the name of your business in California will not affect its entity status for tax reasons. The business entity you selected when forming the company, such as LLC or S-corporation, will determine its tax status.
If you need help with a DBA California, you can post your legal needon 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.