Have you filed your LLC under one name, but now wish you had chosen a different one? Have you realized you need to market your S Corporation's goods under multiple names to reach your customers better? When you form any type of business, the DBA — or "doing business as" — name of your company should be carefully considered with a deliberate strategy, just like any other aspect of your business.
Many small businesses operate under their official legal name, but this is not always the case. Sometimes you'll need to use a different “doing business as” or DBA name to identify your brand in your public-facing marketing communications, while keeping a different “official” name for your legal business entity. There are a variety of reasons why your business might need a different DBA name. But no matter the official name of your business, a DBA can serve as the forward-facing identifier for your customers, business affiliates and even your employees. Basically, your DBA name is what everyone calls your business in normal conversation, while your legal name is the one you use when performing official company processes (such as accepting payments, filing tax returns and preparing legal documents).
Why Might I Need a DBA Name?
There are several reasons why a company may have a DBA different from their legal name. If a large company decides to start offering a new type of service that is completely different from their widely known practices or products, they may want to create a whole new identity for that new line of business. Using multiple DBA names can help avoid customer confusion while introducing a new product or line of business, regardless of any preconceptions people have based on your other existing lines of business.
Sometimes, businesses decide to re-brand while continuing to offer the same services they did in the past. For instance, a food company may want to change their name if it isn’t resonating with customers. In this case, they may change the DBA of their company, but keep their legal name (i.e., the operational and administrative side of the business) the same. This will prevent the hassle of having to close the books on the old business and completely start over from scratch by forming a new S Corporation or LLC.
Can I Have More Than One DBA?
So, is it possible for a company to legally operate under more than one DBA at a time? The short answer is yes — a company can typically register more than one DBA in the same state. That food company in the previous example may decide to launch a new product line of ice cream products that doesn’t fit with their existing potato chip snacks. In order to compete in the freezer space, they decide to create a brand that fits in this aisle of the grocery store. But since both products are created by the same company, managed by the same decision-makers and infused with the same capital, it makes sense to operate both brands under the same corporate structure — but with different DBA names for each brand.
However, if you decide to start doing business under a different DBA name, make sure you follow the appropriate legal process for doing so. You will need to register each DBA separately with the state where you organized your business. You will also need to make sure each name is available and pay the appropriate fees with your state before you start operating your business under that name. If you start doing business as a new company without taking the appropriate steps with your state, you could incur fines or risk using a DBA business name that is already taken.
Multiple DBAs vs. Multiple LLCs
There are additional benefits to using multiple DBA names instead of creating several separate LLCs or corporations. First of all, if you have multiple DBAs under the same legal business entity, you will only need to create one Operating Agreement and file one set of Articles of Organization with the state. This can greatly decrease the cost of filing fees and other expenses that go along with forming a company. When it comes to filing your taxes, you can typically file everything under the parent company without having to worry about several separate filings. Of course, you should always discuss your specific situation with a tax attorney who handles businesses with multiple DBAs to be sure.
If you have more questions about starting an LLC, S Corporation or other types of business, Incfile can be your first resource for taking the next steps. We have many resources and research tools you can access in our Learning Center that focus on a wide variety of topics relevant for new business owners. Whether you need to understand how to file a new DBA, an Annual Report or complete other types of ongoing filing requirements you need to be aware of, Incfile can help you move forward.
Are you ready to start a business, form an LLC, or reorganize your current business structure with a new DBA or other business incorporation services? Talk to Incfile today! Our incorporation experts can help you evaluate your options with state-specific advice.