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Editorial 7 MIN READ

The DBA, a decade in: still useful, still not a shield

What a trade name actually does in 2025, and the one thing the March FinCEN rule changed about it

The Editors
Staff, Incorporator.org
7 min read Updated
Contents 6 sections
  1. What a DBA is and what it is not
  2. Why people still confuse it with a shield
  3. What the DBA is not doing on your tax return
  4. The Corporate Transparency Act picture as of November 2025
  5. Where DBAs still earn their keep, and when they lapse
  6. Sources

DBA, also called a trade name, fictitious name, or assumed name, is a filing that lets a person or an entity do business under a name other than the legal one. It is not an entity. It is a public record of who is behind the storefront.

Ten years into a period where every new founder was told to form an LLC, the plain DBA never went away. It is still the cheapest way for a sole proprietor to open a bank account, sign a lease, or buy ads under a brand. What changed, twice in 2025, is how the DBA sits inside the federal beneficial-ownership regime.

What a DBA is and what it is not

The statutes use different words for the same thing. California calls it a fictitious business name under Business and Professions Code section 17900 and following, filed in the county where the principal place of business sits. Texas calls it an assumed name under Chapter 71 of the Business and Commerce Code, filed with the Secretary of State for entities and the county clerk for individuals. New York calls it a certificate of assumed name under General Business Law section 130, filed with the county clerk for sole proprietors and with the Department of State for corporations and LLCs. Florida calls it a fictitious name under Florida Statutes section 865.09, filed statewide with the Division of Corporations after newspaper publication.

The fees sit in a narrow band. Counties typically charge $10 to $50 for a sole-proprietor DBA, and state filings for entities run up to about $100. Florida's fictitious name registration is $50. The Texas assumed name at the Secretary of State is $25. New York charges $25 for the state-level filing by a corporation or LLC, plus county fees. California counties mostly sit in the $26 to $60 range, plus a required newspaper publication.

The filing gives the right to use the name in commerce in that state without misrepresenting who is behind it. It gives banks a document they can rely on to open a deposit account styled as the trade name. It creates a public record a counterparty or a court can use to identify the signer behind a contract.

It does not create a separate legal person. It does not limit the owner's liability. It does not change how the business is taxed. It does not reserve the name against trademark users in other states. A DBA is a label stapled onto whatever already exists and inherits all of its legal characteristics, including its vulnerabilities.

Why people still confuse it with a shield

A sole proprietor files a DBA, gets a stamped certificate, opens a bank account under the new name, and starts receiving checks made out to the brand. Seeing a separate name creates a sense of separation the law does not share. Every creditor of the business is still a creditor of the human being.

Even for an LLC with a DBA, the trade name adds no protection. The shield is the LLC itself, and it is not absolute. The leading New York case on piercing, Walkovszky v. Carlton, 18 N.Y.2d 414 (1966), is still the starting point. Walkovszky involved a taxi driver who struck a pedestrian with a cab owned by one of ten commonly controlled corporations, each carrying only the minimum statutory insurance. The Court of Appeals held that undercapitalization and common ownership did not, without more, justify piercing; the plaintiff had to plead that the defendant was doing business in his individual capacity through the corporate form. That rule still governs trade-name and shell-entity cases. A DBA is a naming convention, not a capitalization decision. If the person behind the name is the target, the DBA is the paper trail that helps the plaintiff find them.

What the DBA is not doing on your tax return

A DBA does not affect federal tax classification. A sole proprietor continues to report on Schedule C of Form 1040 under the individual's Social Security number, unless a separate EIN has been pulled. An LLC stays whatever it already was federally: disregarded, partnership, S corp, or C corp. The trade name is not a box on any federal form.

State tax follows. California still charges its $800 LLC annual tax on the LLC regardless of how many trade names it has filed. Texas still applies the franchise tax to the entity, not to the brand. A new DBA does not by itself trigger a new sales-tax permit in most states, though revenue departments typically want notice so the certificate matches the name on the receipt.

The Corporate Transparency Act picture as of November 2025

This is where the ground moved, twice, in 2025.

The Corporate Transparency Act, codified at 31 U.S.C. section 5336, requires a reporting company to file beneficial ownership information with FinCEN. The threshold definition at section 5336(a)(11)(A) limits reporting companies to corporations, LLCs, and similar entities created by a filing with a secretary of state or tribal equivalent. A sole proprietorship is not created by any such filing, and a DBA is not an entity. On the plain statute, a sole proprietor under a DBA has never been a reporting company, and FinCEN's FAQs have confirmed that position.

The larger change came in March 2025. FinCEN issued an interim final rule narrowing the reporting population to foreign reporting companies and exempting domestic reporting companies and their beneficial owners from the filing requirement. The rule was published in the Federal Register on March 21, 2025 under RIN 1506-AB49, effective immediately. The practical effect is that an LLC with a DBA, a corporation with several DBAs, and a sole proprietor with a county DBA certificate are in the same place: no filing is presently required unless the entity is a foreign reporting company registered to do business in the United States.

Two cautions. The rule is interim, and the underlying statute is still in force, so a future rulemaking or court order could widen the reporting population again. And banks still apply customer due diligence under 31 C.F.R. 1010.230, which is why opening a business account under a DBA still means identifying the beneficial owners of the underlying entity.

Where DBAs still earn their keep, and when they lapse

Banking is the first use case. A sole proprietor wanting checks payable to a brand brings the DBA certificate, the EIN if any, and a photo ID, and most banks open the account in a single visit. An LLC running several lines under different names can add each trade name to the same operating account without forming a new entity.

Trademark practice is the second. A federal application at the USPTO under the Lanham Act requires use in commerce for a use-based filing, and a DBA plus real sales under the mark gives the applicant specimens and dates of first use. The DBA is not itself a trademark, but it is often the paper that proves the mark was deployed in the market under the applicant's control.

Vendor and platform onboarding is the third. Stripe, Shopify, Amazon, and most commercial insurers ask for documentation of the business name when it differs from the legal name on the W-9 or the formation certificate. The DBA filing is what they expect.

Each of the four states uses a different renewal clock. California requires refiling every five years under Business and Professions Code section 17920. Texas renews every ten years under Business and Commerce Code section 71.152. New York treats the state-level assumed name certificate for a corporation or LLC as effective indefinitely. Florida requires renewal every five years between July 1 and December 31 of the expiration year under section 865.09. Several of these states do not send a reminder, and a lapsed DBA tends to surface when the bank next asks for current documentation.

A DBA is a $10 to $100 piece of paper that does exactly what it says on the cover. It gives a name, creates a record, and lets the banking and marketing infrastructure work. It does not shield the owner from the creditor, it does not change the tax, and as of November 2025 it does not by itself create a federal beneficial ownership reporting obligation. If you need protection, you need an entity; if you need a brand, a DBA is the cheapest fix in American commercial law.

Sources

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