Do I Need a DBA to Sell Online: Everything You Need to Know
Do I need a DBA to sell online? It's a common question asked by those who want to sell products or services using the internet.3 min read
Updated October 29, 2020:
Do I need a DBA to sell online? It's a common question asked by those who want to sell products or services using the internet. DBA stands for doing business as. It is often referred to as a fictitious name or an assumed name. Some people also refer to it as a trade name or an alias.
The reason the DBA designation was formed was to serve as a type of consumer protection. It helps prevent company owners from attempting to operate under a name other than the one they used when forming the business to keep them from getting in legal trouble.
If you are operating an online business under a name that is different from the one you used when you formed the business, you will need to complete the DBA application. You must submit the application to the correct state entity and register the name.
When Should a Business Owner File for a DBA?
There's only one reason you would not need to file for a DBA if you are operating an online business. If you choose to conduct business under your own personal name, you don't need to file for a DBA. In all other circumstances, though, you need to register the name since it's not your personal name.
If you are operating a limited liability company, also known as an LLC, or you're operating a corporation, and you want to operate under a name that isn't currently associated with your existing names, then you will need to complete the DBA process; this allows you to form additional departments or entities without having to incorporate new organizations, which can prove to be of the utmost value because it saves time and money.
If you want to open a business bank account, you will most likely need to file for a DBA because most financial institutions will not allow you to take out a loan or open a checking account under your personal name for business purposes. In fact, with a DBA, you can open up business accounts, take out loans, and even issue and receive checks under the name you chose when completing the DBA process.
It is very valuable to file a DBA because it helps present your company as being professional, and it enables you to easily separate your business' identity from yourself as an individual. Once your DBA is approved, it will help keep other people from using your company's name.
What Is the Main Benefit of Creating a DBA?
Filing a DBA helps you stay compliant with state laws. If you are a sole proprietor and you want to use a different name other than your own, but you don't want to incorporate your business, you can file a DBA to accomplish this goal.
How Do Sole Proprietors Benefit From a DBA?
As a sole proprietor, filing a DBA also proves to be of benefit because it legally allows you to market your products and services under a name other than your own personal name. It is important to note, however, that just because you file a DBA does not mean other businesses can't use it. Most business owners will choose not to use the same name because they want to market themselves under a name that is unique, but if you want to protect the name fully, you will need to get trademark protection.
How Do Corporations and LLCs Benefit From DBAs?
For corporations and LLCs, filing for a DBA is an excellent way to operate multiple entities without having to create separate organizations. For example, if you are an online marketing agency and you want to offer your services under multiple names/domains, you can file for a DBA for each domain. You can choose a generic name to serve as the entire organization's overall name and then use various DBAs for each website.
Let's say you own an online marketing agency called White Hat Marketing, but you want to create a DBA for various online websites. You could create a DBA for the following website names and then operate your business under each name:
- White Marketing.
- Online Marketing Content.
- Inbound Marketing Content.
- Content for Google.
- Content for Websites.
You will, of course, need to check and make sure these company names are not protected by a trademark.
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