Creating a business? A DBA May Be Right For You

DBA

Do not let a name put the brakes on a dream. Businesses are like children; even when they are not yet a reality, our natural tendency is to christen with a name and fantasize bright futures. Similarly, it is a common assumption that you must first finalize the perfect brand name before releasing your entrepreneurial spirit. For some, that decision can be daunting. After all, a name equals an identity. Such an important decision can be overwhelming.

But, instead of twiddling your thumbs until a suitable name comes to mind, your time should be spent crafting your skills or product and finding a market. After all, the best name for your company may not arrive until your business gets going.

It may calm your nerves to know that finalizing the perfect name did not prevent film director Stanley Kubrick from following his dream of making a certain science-fiction project. In early 1965, Kubrick announced to the press that his new movie would be titled Journey Beyond The Stars; that movie would eventually be released in 1968 under the name 2001: A Space Odyssey. While this example applies to a project and not an official business, there is a lesson to be learned from Stanley Kubrick. If you are an aspiring entrepreneur who has something to offer to the world, you should not feel like an astronaut floating around aimlessly in zero gravity.

So, to get your dream off the ground, you might want to consider filing a “doing business as” name (also known as a DBA name). Think of a DBA as a working title, a temporary name that will organically lead into a permanent name suited for your business. A DBA can be used whether you wish to be a sole proprietor or desire a more formal structure such as a corporation.  Please be aware that a sole proprietorship is not recommended if you have significant assets to protect, (see my blog – “Don’t lose your shirt! Follow these two rules.”  )

A DBA will get the engine going, but states have particular filing procedures. To ensure compliance with the law you should research the state where you will be operating your business. Legally, DBAs are the least expensive way to set up a business. In New York State, a DBA is officially referred to as an “Assumed Business Name.” Section 130 of the State’s General Business Law sets out the requirements and conditions of DBAs. A certified copy of your filed DBA will be required by your bank before you can open an account for your new business, which is very useful for keeping personal finances separated from business finances.

Here is an example to help you out: let us say Bob Jones is a freelance graphic designer. A “doing business as” name may increase Bob’s chances of finding customers if he filed his business as simply “Bob’s Graphic Design.”  Under the law in New York, unless Bob wants to operate his business under his own name “Bob Jones,” he must file a Certificate of Assumed Name in the county in which he is doing business.  Similarly, corporations that wish to operate their business under a trade name different from their corporate name must also file an Assumed Name Certificate, in this case with the New York Department of State in Albany.

Sometime in the future, Bob decides to expand and form a limited liability company with a name that he loves such as “Designs With Style, LLC.”   By that time, however, the “Bob’s Graphic Design” may have significant following and credibility within the industry which Bob does not wish to lose.   After proper filing, of the legal entity, “Designs With Style, LLC.”  Bob can also do business as “Bob’s Graphic Design,” as well as introducing other trade names with assumed name status.

All things considered, before you go ahead and file a DBA, it is important to take note that DBAs do not protect your business name from being used by others. However, you can protect your continued use of your assumed name, or your corporate name, by obtaining a trademark.  Evidence that you have been operating a business under the trademarked name is an important factor in your favor should you be involved in a future trademark controversy.  (see my blog “Trademark Your Brands and Logos” )

You can find all my blogs on my web site or Facebook Page.

If you are thinking a DBA is right for you and you are interested in more information, please contact me for counsel at my web site http://www.calgreenberg.com/ , by e-mail at Cal.Greenberg@gmail.com, or by phone at 718-324-7200.
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© 2017 Calman Greenberg Attorney at Law. All Rights reserved.

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