DBA benefits might not be obvious, but there are several reasons that creating a DBA will add value to your business. Giving your business a DBA keeps the legal name of the company separate and may even open up other business opportunities that might not otherwise have been available. Check out our list below and see if establishing a DBA is the right option for your business.
Privacy
First, establishing a DBA is necessary if the owner is a sole proprietor or in a general partnership. Some state laws require that for these types of businesses, the owners’ name is the legal name of the business. The DBA allows these business owners to operate a business under a name other than their given legal name, helping to keep their personal lives separate from their business lives.
Legal Compliance
Ensuring your business meets the legal requirements of the local and state government is important. In some states, it is illegal to operate a business without registering a DBA, so filing the registration properly will keep the business compliant with the law. In addition, those businesses that are corporations and LLCs are offered a certain level of legal protection. If the business is operating under a different name and a DBA hasn’t been filed, the business risks not being protected should an issue arise and need to go to court.
Operate Multiple Businesses
DBA’s are also useful for already established corporations and limited liability companies. For example, the corporation may have a legal name and operate under a DBA that reflects one aspect of business. If the corporation wishes to start another business, it simply needs to add an additional DBA under their corporation umbrella allowing them to operate those businesses under names that accurately reflect the services provided.
Furthermore, if an incorporated business decided they would also like to operate under a website, another DBA must be filed for that website address. In short, a DBA is necessary for any deviation from the original name of the business. An additional benefit is that there is no limit to the number of DBAs one corporation may have.
Conducting Basic Business Transactions
One of the main aspects of operating business is the transaction of money. Businesses expect cash to come in, and expenses to go out. Banks typically require a business to have a DBA name, and require proof in order to open a bank account to accept payments under that name.
Creative Marketing and Brand Awareness
Perhaps one of the most important steps in forming a business is creating the name. The chosen name not only makes the public aware of what services are being offered, but it’s a chance to choose a name that can be marketed creatively, remembered easily and make the company more distinguishable.
Creating a DBA allows the business to do just that, instead of operating under a name like Jane Doe’s Clothing Store the owner can choose a name that represents their personal style and mission of the business.
Credibility
Sole proprietors or freelancers may run into an issue of winning contracts for new business without having a DBA. A DBA lends credibility to your business and allows others to see an independent operator as a legal entity. In other words, an official business name appears to be a legitimate business much more so than an individual is.