Is Fictitious Name Same as DBA: Everything You Need to Know
Is fictitious name same as DBA? Many business owners, especially sole proprietors often ask this question when they need to choose a business name.3 min read
2. What Is a DBA or Fictitious Name?
3. Advantages of DBAs in Business
4. When to Use DBA
5. How to Register a DBA
6. DBA FAQ
Is fictitious name same as DBA? Many business owners, especially sole proprietors often ask this question when they need to choose a business name. DBA or fictitious names are the same and interchangeable.
The Difference Between an Assumed Name and a Legal Name
A legal name is the official name of a person or business in government records. Any other name used for business purposes is an assumed name. Assumed names are also known as:
- Fictitious names
- Doing business as names, and
- Trade names
Instead of using a legal name, a person or business can do business under assumed names. For example, foreign companies that intend to operate in New York State need to use a fictitious name if their original name is already in use by a domestic New York entity. However, fictitious names can also be called "doing business as" or DBA. In New York, the company files for a DBA certificate with the county clerk of the county where it is located while corporations and LLCs file an assumed name certificate with the Department of State.
What Is a DBA or Fictitious Name?
DBA, fictitious name or trade name is the name under which a business entity performs its functions and relates to the public. DBA is an abbreviation of "doing business as." In some states, businesses need to file for DBA or fictitious names to protect their customers. Generally, the function of the DBA or fictitious name is to show the buying public the identity of the business owner. It allows the public to know and have the contact details of the person handling the business. A fictitious name has the same meaning as a DBA, and both terms are interchangeable.
Advantages of DBAs in Business
Here are some of the benefits of having a DBA in business:
- DBAs offer marketing advantages, especially for businesses with an online presence.
- It helps businesses simplify long names or make their names more relatable to their niche or industry.
- DBAs protect the clients of the business by providing the identity and address of the owner in public records.
When to Use DBA
Your business needs a DBA if it is operating under a name different from yours. For example, you don't need a DBA if your name is Patrick Munchy and you operate a mechanic shop under Patrick Munchy Auto Care as your name shows you own the business. Another example is when you own an LLC called Poppers Ventures LLC and operate a construction company called Giant Rocks Construction Services. You need to file for a DBA so the public can know that Poppers Ventures owns Giant Rocks Construction Services. The same applies to a corporation operating different subsidiaries in multiple locations under different names. The corporation will need to file for DBAs for each of these businesses to show the public it owns the entities.
But if you operate a business entity like an LLC, partnership or corporation, it means you are legally registered to do business in that state. Your name is available in registered in the public records for people to see. These types of businesses do not require a DBA except where they operate under a different business name. If your registered business name includes terms such as "Corporation" or "LLC" or similar designations, these can also serve as a DBA.
How to Register a DBA
DBA registration varies from state to state, with individual states having different procedures for obtaining such names. To register a DBA, you need to register the business name with the county registrar or the state secretary of state. Some states require publishing your DBA in a local news publication. Generally, DBA registrations do not require a lawyer as the procedure is simple. Contact your county or city office for more information. The DBA registration costs between $10 to $100.
Most states allow different businesses to use the same DBA if the business DBA statement was filed correctly. Regarding bank transactions, it's not advisable to enter into any business transactions under your fictitious name before registering the name. Most banks require evidence of a DBA filing before you can open a business bank account under that name. However, banks have different policies regarding DBAs, so you can try other banks if one does not accept your fictitious name statements.
If you need more information on fictitious name and 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.