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Startup Rules
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Article 2: Be Official
Your home business should operate with a fictitious business name, or DBA, which stands for “doing business as.”
The DBA is an official government recognition of your business as a unique legal entity. It protects you, your bankers, creditors and customers. Specifics vary by jurisdiction, but here are some general guidelines.
In the name of your business, the DBA permits you to open bank accounts, incur debts and enter legal contracts as an entity, rather than as an individual. It is also generally required before obtaining a business license.
The DBA protects you by ensuring that only you are entitled to do business by that name. Some businesses operate with multiple DBAs. For most home-based businesses, one DBA is probably sufficient, unless there are distinct business activities you want to keep separate.
The filing fee, normally paid at the county level, is usually $10 to $50. But many jurisdictions also require that you announce your DBA through paid advertisements in a newspaper of general circulation.
Before receiving your DBA, you must conduct a search of existing fictitious business names on file within that jurisdiction. The aim is to be certain that no other business uses the name. Search fees are nominal.
DBA searches can be easily conducted at county offices, where paper, microfiche or computer indexes show whether the fictitious business name you have chosen is already on file. These searches are easy enough for laymen to conduct, but a lawyer helping you set up your business can also arrange for the searches to be conducted.
DBAs may be renewed periodically. Don’t let yours lapse. If another company files to use your name while your DBA has lapsed, you can lose legal claim to it.
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