If a limited liability company wants to do business under a name other than the official LLC name, it usually must register a fictitious business name, also known as a trade name, “doing business as” name, or DBA.
For example, if you have a coffee importing business, you might have formed “XY Coffee Imports LLC.” But if you decide to open a café that sells fresh cups of your coffee, you might want something catchier. In that case, you could register a DBA such as “Java Joe’s.”
Once you’ve filed a DBA, you can do business under your new DBA name. But you can also still do business under your official LLC name. The coffee company might continue to conduct its importing business under the LLC name, even though it uses a DBA for its coffee shop.
Here’s what you need to know about setting up and maintaining your LLC and its DBA.
Forming an LLC requires filing articles of organization with your state’s secretary of state or other business filing agency. An LLC must have a name that is distinguishable from the name of any other business entity authorized to do business in the state.
When you form an LLC, you gain an exclusive right to use the LLC name in your state. You don’t have to separately register the LLC name as a trade name or DBA.
To keep your LLC in good standing, you must maintain a registered agent in the state to accept lawsuits and legal documents on behalf of the LLC. Depending on the state where your LLC was formed, you may also have to file annual reports and pay annual taxes or fees.
If you want your LLC to conduct business under a name other than the official LLC name, you must register the new name as a DBA in most states. Some states have statewide DBA registration, while in others, you must register a DBA with your local city or county. A few states don’t require DBA registration.
If you do business under a fictitious name without registering it, you can face monetary penalties and other legal consequences. The exact consequences vary depending on the state, county, and city where you are located.
The state or locality where you registered your DBA may also have requirements to keep your registration up to date, including periodically renewing the registration.
Operating your LLC and DBA
It’s important to remember that your LLC name is your business’s official legal name. A DBA is like a nickname. When signing contracts on behalf of the business, always use the official LLC name and not the DBA name.
Also, know your state’s requirements for LLC reporting and trade name renewal, and make sure you stay in compliance.
An LLC can operate under its formal name or a fictitious name or use both. Be sure you follow the requirements for registering and maintaining a DBA in your state and locality, and always sign contracts on behalf of the LLC, not its DBA.