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DBA in California
A good name is important if you want your business to grow in California. Business names, however, are affected by your business structure. For example, if you’re running a sole proprietorship, your business will use your real name as its legal name.
Thankfully, there’s a way for you to use another name for your business, one that suits it better: a DBA. In this article, we’ll discuss what this is, what you can benefit from it, and how to register for one in California.
Definition
What Is a DBA?
DBA is an acronym that stands for “doing business as.” It’s an alternative name or alias that you can use for your business if you don’t want to use its legal name. California refers to these as “fictitious business names” (FBN). They are also referred to as “trade names” in other states.
The state of California does not require all businesses to use DBAs for their businesses except for the following reasons:
- If you’re running a sole proprietorship and you plan to do business using a name that does not include your last name.
- If you’re running a partnership but plan to do business using a name that does not include the last names of each general partner or owner.
- If you own an LLC in California or other incorporated business and want to use a name different from the one stated in the Articles of Organization or Articles of Incorporation you submitted to the California Secretary of State.
DBAs are not separate entities akin to registered businesses. And while they can be used in place of your business’s actual name, they do not replace your registered business name in California. If you plan to use names other than what you used when registering your business in the state, you will need to apply for them by filing an FBN Statement with your county clerk.
Advantages
What Are The Advantages Of A DBA In California?
A DBA is beneficial to your business for a number of reasons. Let’s look at some of the most important ones.
Branding is made easier
DBAs help you establish your chosen brand for your business. Instead of using your own name, you can use a name that will more appropriately reflect your business’s identity, offers, and services.
Take businessman Mr. Melvyn Bernie, who started his jewelry business in Burbank, California, in 1968, for example. Instead of using his name for his jewelry store, he used the FBN “1928 Jewelry Company.” His store’s name effectively communicated its services to potential customers for decades now. You can do this too.
Adds more privacy to your business
DBAs add a layer of privacy that hides your identity as a business owner. Instead of putting your name on posters, flyers, and other promotional material, you can place the fictitious business name you registered with your local county clerk instead. This helps keep your name private in case you don’t want it seen in the public-facing parts of your business.
That said, the FBN Statement you file with your local county clerk is meant to make your identity as the business owner known to the public. A DBA will merely allow you to keep your name away from promotional materials.
Franchise names made easy
If you plan to purchase a franchise from your favorite chain, you’ll need to get a DBA to be able to use its popular name. For instance, if you plan to purchase a franchise from the popular Encino-based froyo brand, Menchie’s Frozen Yogurt and set it up in Fresno, you will first need to register the business with a name like “Menchie’s Franchise 143 Fresno.” Then, the next step should be to file an FBN Statement to register the name “Menchie’s Frozen Yogurt” for your franchise in Fresno.
DBAs help you diversify your offerings
Businesses looking to diversify or try their hand at other ventures or product lines can benefit from using DBAs as well. Let’s look at San Francisco-based clothing and accessories giant The Gap Inc., more commonly known as GAP. This clothing company has several brands, each with its own name and identity:
- Banana Republic, an upscale clothing retailer that started out as a safari-themed clothing store
- Old Navy, a value chain known for its affordable clothing
- Athleta is a retailer focused on women’s athletic apparel, hence the name
You can use DBAs to give unique names to every venture your main business owns. This will help you grow your business even more.
Banking purposes
While the state of California won’t require you to get DBAs, banks will—so that you can open bank accounts using these fictitious business names. Using DBAs to get bank accounts for your business allows you to separate your personal finances from those of your business’.
Moreover, if you have several ventures using different DBAs, this will help you segregate the finances for each of them. This will help you avoid mishandling your finances.
Disadvantages
What Are The Disadvantages Of A DBA In California?
While DBAs offer many benefits, they don’t really have downsides that could be considered disadvantageous to your business in any way. They do have limitations, though, and knowing them will help you get a better grip on how to use them well.
First off, DBAs do not provide any personal asset protection the same way LLCs and corporations do. This means that if your business gets sued for valid reasons (such as negligence, for example) and loses the case, you can be forced to pay penalties and dues using your personal assets. Unless your business is an LLC or a corporation, you should get insured for your own protection.
Next, the fictitious business name you choose must meet California’s business naming requirements. Namely, the DBA you choose should not contain the following:
- Last names. If you want to do business using your last name, you don’t need to file an FBN Statement.
- Words or terms falsely claiming that the business is incorporated. These words include “Corporation,” “Corp.,” “Incorporated,” “Inc.,” and so on. These words are allowed if your business is actually incorporated.
- Words or terms falsely claiming that it is a limited liability company. These include “LLC,” “L.L.C.,” “Limited Liability Company,” or “LC.” The words “Limited,” and “Company,” and their abbreviations can be used if they do not falsely imply that the business is an LLC.
DBA Formation
How To Get A DBA In California
Now, let’s discuss how you can get a DBA for your business in California. Here’s what you need to do:
Search for your name’s availability
First, come up with a business name you want and check with the California Secretary of State’s website if it is already in use. Check your local county clerk’s website to verify if the name has also been taken. You have to do this personally as both the state and your local county do not verify business names’ availability online.
Your chosen DBA must be unique and not contain the words and terms mentioned above. The Secretary of State and local county clerk, however, will not guarantee that other businesses will not use your name. Make sure to verify if the name you want is available before filing and if someone else uses it after you file.
File an FBN Statement with your county clerk
After verifying that the name you want is available, you must then prepare a Fictitious Business Name (FBN) Statement and file it with the county clerk’s office in the county where you will be doing business. Pay the filing fees as well. The filing fee varies with the county, so ask your county clerk for details.
You will be asked to provide the following information:
- The fictitious business name/s you want to use
- Your business’s complete address in the county
- Your name and residence. If you have partners in the business, include their names and addresses
- The nature of your business (whether it’s an individual, general partnership, LLP, LLC, and so on)
- The date when you started to do business using the fictitious name.
Be sure to provide accurate information during the course of your application to get a DBA. If you are found to have used false information, you will be considered guilty of a misdemeanor and will be given a fine of up to $1,000.
Publish your FBN Statement in a local newspaper
Finally, publish the FBN Statement in a local newspaper circulating within the county where you do business. The statement has to be published within 30 days of filing with the county clerk, and it has to be published once a week for four weeks straight. You must then file an affidavit of publication with the county clerk’s office within 30 days of the last publishing date.
Once your new DBA is approved, it will be valid for five years. You will need to refile it once it expires.
Costs
How Much Is A DBA In California?
Per California state laws, registrants need to pay a minimum filing fee of $10 for the first fictitious business name and owner and $2 for each additional FBN or owner filed in the same statement and doing business at the same location.
The current filing fees vary with your county. For example:
- Sacramento County charges $44 for the first FBN and $8 for every additional name
- Los Angeles County charges $26 for the first FBN and $5 for every additional name
Depending on the county, the actual filing cost could range between $10 to $100, so make sure to check before filing. You should also add the cost of publishing your FBN Statement with a local newspaper in your county to determine the total cost of getting a DBA for your business.
Summary
Doing business As (DBA) helps you establish and grow your business in California. The process to get it in CA might be a bit more tedious and costlier compared to other states, but the benefits are worth it. DBAs help you establish your brand, diversify your offers, and keep your personal information as private as possible. They also make it easier for customers to remember you. Get your DBA in California today.
FAQ
Frequently Asked Questions About A DBA
Here are the most commonly asked questions about forming a DBA:
Yes. You can file for as few or as many DBAs in California as long as you go through the process and pay the corresponding fees.
You will need to wait one to four weeks for your California DBA to finish processing. It may take longer, depending on your county.
No. DBAs do not protect your personal assets from lawsuits. If you run a sole proprietorship or general partnership, you must get insured to protect your personal assets.
No. The state of California does not put taxes on DBAs. You only need to pay the required filing fees to register DBAs with your local county clerk.