Importance of a company’s fictitious business name or DBA.
A fictitious business name, sometimes called an alias or DBA, short for “doing business as”, allows you to do business legally using a particular name at minimal cost and without having to create a business entity entirely news. You may accept payments, advertise and otherwise present yourself in a commercial sense under this name. In fact, it can be considered fraud if you present your business under a name other than the proper legal name without proper notification. Luckily, there really aren’t many excuses not to file an alleged business name because it’s so easy and inexpensive.
At Nakase law firm there is a complete guide on How to file a DBA in Los Angeles, In Los Angeles, a fictitious business name, or DBA, is one that does not contain the owners’ surname or the official corporate name. It is possible to file for a DBA using a portal on the Los Angeles County Clerk’s website.
How to Choose a DBA?
If you choose to create a fictitious business name, then you should keep certain guidelines in mind. Your DBA cannot be your real brand name. It cannot include terms such as “LLC” or “INC” as this will confuse your business partners and customers. Also, the DBA does not represent a legal name and if you want it to be yours exclusively, then you will need to register it.
If your brand name includes your services, then you will not need to file a DBA. On the other hand, if your name contains your first name for example, then you will need to file a DBA for your new activity.
It is also worth mentioning here that your domain name may be different from your DBA. If you set up your website before you found you’re DBA, then you won’t need to change your domain name. If you’re getting a DBA for a new product line, for example, you just need to make sure you’re consistent with what your company offers.
Why would I need a DBA?
Each company has a “legal” or “real” name under which it is incorporated. For sole proprietorships, the legal name is the name of the owner(s) of the business. For LLCs or corporations, the legal name is stated in the incorporation document, such as Articles of Incorporation or Articles of Organization.
Although “doing business as” names are useful for sole proprietorships, they are also useful for other types of businesses, such as LLCs and corporations. Here are some reasons a company might want to get a DBA name.
• Registering a domain name
When the domain you want is not available, you may need to sell your services under another name. For example, suppose the owner of “Sharpest Tools, LLC” chooses to build a website but is unable to acquire his LLC name as a domain name. They register the domain “LocalTools.com” instead. They get a DBA name for “Local Tools” to sell under that brand.
• Expansion to additional services
You can set up a company to provide a service or product only to expand in another direction later. For example, if your business, “Luna’s Locks, Co”. Provides hair care products and supplements, you may not want to sell your line of vitamins and supplements under the same name. Instead of starting a new business, you can get a “doing business as” name and sell those things under a different name.
Legal aspects
Use of one or more fictitious trade name does not create separate legal entities. The distinction between a registered legal name and a fictitious business name, or business name, is important because fictitious business names do not always identify the entity that is legally responsible.
Legal agreements (such as contracts) are normally made using the registered business name of the business. If a company fails to consistently comply with important legal formalities such as the use of its registered corporate name in contracts, it may be subject to corporate veil piercing.
