A business name can make or break a business — it’s just that important. Think about it: choosing a business name that doesn’t match the true meaning of the business and the types of services provided can lead to confused customers who may turn to another company. Plus, operating a business under a false or improper name can not only tank the business financially but also lead to government fines and consumer lawsuits.
Naming issues can get even more complicated when a business is operating in a different state than the one in which it was formed. That’s why some limited liability companies and sole proprietors choose to use a “doing business as” name, or DBA, when operating as a foreign LLC in another state.
A company that files a “doing business as” name, also known as a fictitious name, chooses a different name to operate under than its legal, registered name. A DBA is often used by business owners who want to operate their business under a separate business name that is different from their LLC name. For example, if Cindy’s Crafts LLC wants to name her homemade candle business Smith’s Scents, she needs a DBA to do so.
Reasons Why You May Want a DBA in a Different State
LLC owners may want to operate their business under a different business name for various reasons. Here are a few reasons why it may make sense to use a DBA name:
- You are incorporating in multiple states under the same name, but you want your business name to reflect specific locations.
- The products and services you provide have changed and thus, you want to update the name.
- Your legal business name is similar to your own name, but you want to do business under a different name for personal or privacy reasons.
- You want a creative or unique business name.
- Your bank may require an official DBA to open a business banking account.
- You want to operate multiple businesses.
Can I File a DBA in a Different State Than My State of Formation?
Yes, you can register a DBA name in a different state than the one in which your LLC was incorporated. The process of filing for your fictitious business name tends to vary from state to state, and even county to county. In many states, all you have to do is go to the county offices and pay a registration fee to the county clerk. Do some research to find out the specifications on the state or county you are registering in beforehand.
Foreign LLC / Foreign Qualification
Some states require you to file a Foreign Qualification before a DBA. If you plan to do business in multiple states, find out the requirements for each state. A Foreign Qualification doesn’t mean that you are operating your business in a different country — just a different state than where your business is registered. If your LLC is “transacting business” or “doing business” in that state, it is therefore considered a foreign entity. And this is also where a DBA comes in handy.
A Foreign Qualification refers to the process by which you register your company to do business in another state. LLCs are considered domestic only in their state of formation. For example, if you form an LLC in Maine, it is “domestic” in Maine and considered a “Foreign LLC” in any other state.
From the state’s point of view, a Foreign Qualification ensures that the public has access to basic information about your business, such as its legal name, business address and name and address of its Registered Agent.
While filing your Foreign Qualification and having a unique DBA in various states may make sense for your business, there can be some downsides. You’ll need to follow different state and county legalities, fill out lots of paperwork for each DBA and pay multiple state registration fees. Being strategic about which states and how many states you’re doing business in is crucial.
States with No DBA Filing Requirements
You may want to conduct business in a state that has no DBA filing requirements. While most states do have filing requirements, some states do not. A full chart of states with their filing requirements and state fees can be found here.
Some of the states that do not require a DBA include:
- New Mexico
If a state does not have DBA filing requirements, does that mean that you shouldn’t protect your business? Absolutely not!
You should still consider legal protection for your business. Forming an LLC or corporation is one of the best ways to secure the legal name of your business, but if you want to take an extra step, it may be worth trademarking your business name, which will give you legal ownership over your company name and logo.
Get Business Peace of Mind Today
The ins and outs of deciding on a business name and multiple DBAs or fictitious business names are often stressful and time-consuming. You also want to ensure you’re checking all of the boxes when deciding to potentially operate in additional states. That’s where we can help. Our Fictitious Business Name service can take care of all the details for you, handling all of the forms, filing and registration on your behalf.