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Editorial 8 MIN READ

The DBA, demystified: what a fictitious name is and isn't

A county-clerk filing, a newspaper notice, and a name that gives you permission to do business — not ownership of it

The Editors
Staff, Incorporator.org
8 min read Updated
Contents 5 sections
  1. What the filing actually is
  2. The state-by-state mechanics
  3. What the DBA is not
  4. When it's the right tool
  5. Sources

DBA is a permission slip, not a property right. You file one so your bank will open an account in a name other than your own, and so your state will not treat the receipts as fraud. It does not form an entity, it does not shield you from liability, and it does not give you the exclusive use of the name you just paid to register.

That last sentence is the one most founders get wrong, which is why, in August 2017, the DBA is worth a closer look than it usually gets.

What the filing actually is

"DBA" stands for "doing business as." The same instrument is called a fictitious business name (FBN) in California, an assumed name certificate in Texas and Illinois, a certificate of assumed name in New York, and a fictitious name registration in Florida. Mechanically it is a public notice, filed with a county clerk or the secretary of state, saying that a named person or entity — you — is operating under a different name. It closes a gap between legal identity and commercial identity.

Two kinds of filers need one. The first is a sole proprietor whose business name is anything other than the owner's surname; Jane Smith trading as "Smith Consulting" can generally skip it, but "Coastal Bookkeeping" triggers the requirement. The second is an entity — an LLC, a corporation, a partnership — that wants to trade under a name other than the one on its formation document. An LLC called "Atlas Holdings, LLC" that runs a bakery called "Sunday Bread" needs a DBA for the bakery name in every state where it uses it.

An LLC does not replace a DBA. It sits underneath one. This is where the comparative framing ("DBA vs LLC") usually goes sideways: the two things are not alternatives. The LLC is the legal person. The DBA is the mask that legal person wears on the storefront.

The state-by-state mechanics

The requirement is local. Every state imposes one, but the filing office, the fee, the publication rule, and the renewal period vary, and the variations matter.

California is the most procedurally involved. The statute is the Fictitious Business Name Law at Cal. Bus. & Prof. Code § 17910 et seq. Section 17915 requires the filing in the county where the principal place of business sits, with the county clerk, within forty days of first use. Section 17917 then requires publication of the FBN statement in a newspaper of general circulation in that county, once a week for four successive weeks, with an affidavit of publication filed back with the clerk within thirty days. Registration lasts five years under § 17920, after which you refile. County clerk fees in 2017 run roughly $26 to $60 for the base filing, plus a per-additional-owner charge; newspaper publication frequently costs more than the clerk's fee, which is the part that surprises first-time filers.

New York splits the rule by entity form. A sole proprietor or general partnership files a business certificate with the county clerk under N.Y. Gen. Bus. Law § 130(1)(a). A corporation, LLC, or limited partnership files a Certificate of Assumed Name with the Department of State under § 130(1)(b) — the form is the familiar X-201 for corporations (§ 130 does not itself name the form; the Department of State assigns it). The § 130 filing fee for a business corporation's assumed name is $25 to the state, plus a per-county surcharge that for New York City counties (New York, Kings, Queens, Bronx, Richmond) runs $100 per county; filing for use in all sixty-two counties is more expensive than founders expect, and it has to be done before the name is used, not after.

Texas routes everything to chapter 71 of the Business and Commerce Code, the Assumed Business or Professional Name Act. Section 71.103 requires an unincorporated person to file with the county clerk of each county where business is conducted. Section 71.152, amended by H.B. 3609 effective September 1, 2017, directs a corporation, LLC, LP, or foreign filing entity to file the assumed name certificate solely with the Secretary of State; the pre-2017 regime that required duplicate county filings for registered entities is being retired. The Secretary of State's fee for Form 503 is $25. The certificate is good for ten years.

Florida runs the registration through the Division of Corporations under Fla. Stat. § 865.09, the Fictitious Name Act. One state-level filing, $50, renewable every five years on December 31 of the expiration year. Florida also requires the applicant to advertise the intent to register at least once in a newspaper of general circulation in the county of the principal place of business before filing — § 865.09(3)(b) — a rule that is routinely missed and almost never enforced, but is on the books.

Illinois splits by entity as well. Sole proprietors and general partnerships file with the county clerk under the Assumed Business Name Act, 805 ILCS 405/1, and must also publish notice in a newspaper in the county once a week for three consecutive weeks (§ 405/1). Corporations and LLCs file an assumed name application with the Secretary of State under the Business Corporation Act (805 ILCS 5/4.15) or the LLC Act (805 ILCS 180/1-20), on a different fee schedule and with no publication requirement at the state level.

Five states, five different pathways, and the common thread is that none of them is the state you happened to form your LLC in. A DBA is tied to the operating location, not the entity's domicile.

What the DBA is not

It is not a trademark. Filing a fictitious name with a county clerk creates no exclusive rights in the name. Another business in the next county — or the next block — can use the same string unless you have a separate trademark. Federal trademark rights arise under the Lanham Act, 15 U.S.C. §§ 1051 et seq., through use in commerce and (for the registration-based advantages) through filing with the USPTO. State trademark rights arise under the individual state trademark acts. A DBA filing is notice; a trademark is property. The Ninth Circuit put the distinction bluntly in Brookfield Communications v. West Coast Entertainment Corp., 174 F.3d 1036 (9th Cir. 1999): trademark rights follow use, not paperwork. The paperwork in question there was not a DBA, but the logic travels. Registering "Sunday Bread" with Los Angeles County gets you a bank account. It does not get you the name.

It is not a liability shield. Nothing about the DBA changes who can be sued. A sole proprietor with a DBA is still personally liable for the business's debts; the DBA adds a name, not a limited-liability wrapper. An LLC with a DBA is still liable only at the entity level, because the LLC is what provides the shield, not the DBA on top of it. Founders who "set up a DBA" in place of forming an entity have not created any shield at all.

It is not a tax election. The IRS does not care what name is on your storefront. A sole proprietor with a DBA still files a Schedule C under the owner's SSN (or an EIN obtained on Form SS-4 for the sole prop). An LLC with a DBA files at the LLC level under its own EIN. The DBA changes the payee line on checks; it does not change the taxpayer.

When it's the right tool

A single-member LLC that plans to run two unrelated brands often files two DBAs under one LLC. This is cleaner than forming two LLCs if the liability exposure of each line is similar, and it collapses the annual reports and franchise-tax filings to one. If the exposures are different — a contracting business and a food operation, say — separate entities are still the right answer, and DBAs will not substitute.

A sole proprietor who needs a business bank account and does not want to use their legal name uses a DBA because the bank will insist on one before it opens the account in a business name. That is frequently the entire reason the filing exists from the owner's point of view.

A foreign-qualified LLC — a Delaware LLC doing business in California, for example — often needs a California FBN if the name on its Delaware certificate is unavailable or already taken in California, or if it simply wants to trade under a shorter name. The foreign qualification is one filing; the FBN is another; they are not substitutes.

The DBA is the least impressive document in a company's formation file, and it is the one most founders misunderstand. A clean version is: form the entity that gives you the liability treatment you want, then file a DBA in each county or state where that entity trades under a different name, then, separately, register the marks you actually need to own. Three steps, three different offices, three different things. The DBA is the middle one.

Sources

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