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Delaware DBA
In starting a business, one of the most important decisions you must make is selecting a business entity structure. One such structure entails filing a Delaware DBA or doing business as. This allows you to use a different name than your own for business purposes and provides the opportunity to expand your brand while protecting yourself from liability.
Here, we’ll discuss what is involved in filing for a Delaware DBA and why it might be the right choice for your business.
Definition
What Is a DBA?
A DBA, or “Doing Business As” is a legal process that allows an individual or business to conduct business under a name other than their own. It also serves as an alternative to forming a corporation or Delaware limited liability company (LLC) since it is much less expensive and easier to set up.
A Delaware DBA means that an individual or business is registering a DBA in the state of Delaware. The process is relatively straightforward and can be completed quickly online. It involves filling out an application, paying a filing fee, and submitting it to the Secretary of State’s office. Once approved, the owner will have all of the rights associated with doing business as that name in Delaware.
Advantages
What are the Advantages of a DBA in Delaware?
Here are the advantages of setting up a DBA in Delaware:
Ease of setup
Setting up a DBA in Delaware is relatively simple and straightforward. All you need to do is fill out an application form, pay the required fees, and file it with the state government. Once your application has been approved, you can start operating under your DBA name right away.
Tax benefits
The state offers unique tax benefits for businesses registered as DBAs. For example, income taxes are lower compared to other states, and the state does not require a business to pay corporate income taxes or franchise taxes. This makes it easier for businesses to save money and remain profitable.
Regulatory flexibility
Delaware is known for its flexible regulations when it comes to DBA registration and operation. For instance, there are fewer restrictions on how you can run your business, such as minimal requirements for audited annual financial reports or ongoing reporting obligations.
Professional resources
The state also offers a wide range of professional resources to help businesses registered as DBAs. This includes access to experienced legal advisors, accountants, and other business professionals who can provide valuable guidance.
Disadvantages
What are the Disadvantages of a DBA in Delaware?
On the other hand, there are also drawbacks to setting up a Delaware DBA, including:
High fees
While Delaware may have lenient reporting requirements, it’s also known for its high fees. The state imposes some of the highest business registration and franchise taxes in the country.
Applying for a DBA in Delaware entails paying $25 for each county where your business operates. Additionally, you may need to pay $200 for filing the Certificate of Assumed Name. If your business is registered as a corporation, you’ll also need to pay an annual franchise tax that can range from $200 to over $180,000.
All of these potential fees can be a major deterrent to forming a DBA in Delaware.
Complexity
The process of registering a Delaware DBA can be complex and time-consuming due to the paperwork that must be completed and submitted for approval from the Secretary of State’s office. It may also require more legal expertise than other states, which would entail further costs.
Limited liability protection
A Delaware DBA does not offer the same level of liability protection as other types of business entities, such as an LLC or corporation. This can leave you exposed to personal liability if your business is sued.
Limited geographic presence
Although a Delaware DBA may be used in any state, it will only provide limited geographic presence due to its reliance on local laws and regulations that govern the formation and operation of businesses.
DBA Formation
How to Get a DBA in Delaware?
These are the steps to filing a DBA in Delaware:
Choose a business name
Your business name must be recognizable and unique, so it’s best to check with the Delaware Division of Corporations before filing your DBA to make sure it hasn’t already been taken. Do your research and come up with something creative that will stand out to potential customers.
Plus, make sure that your business name does not contain any restricted words or phrases that require additional paperwork.
File an Application for Reservation or Registration of Name
This form is available from the Delaware Division of Corporations website. You must fill out the form completely and submit it along with appropriate fees and paperwork as required by state law.
Get a DBA certificate
Once the application is approved, you will receive a certificate of registration from the Delaware Division of Corporations. This document shows that your business is legally registered and able to operate in Delaware under its assumed name. The certificate is valid for five years from the date of issue.
Maintain a current address
You must maintain an address within Delaware as well as keep all contact information up to date with the state for as long as you are operating under your assumed name in Delaware. As such, you should be sure to register any changes in address with the state when they occur.
Costs
How Much Does a DBA Cost in Delaware?
As mentioned, a Delaware DBA application entails a fee of $25 per county. This means if you are doing business in multiple counties, the cost of filing a DBA increases accordingly. In addition to filing fees, there may be other associated costs, such as legal and professional fees, for preparing documents or conducting research. Fortunately, Delaware is an advantageous state to do business in due to its low operating costs and favorable tax structure.
In addition to the filing fee, there may be other costs associated with forming a Delaware DBA. These expenses will vary from company to company, but they could include:
- Legal fees for preparing documents and conducting research
- Professional fees for obtaining help with registering or maintaining a DBA
- Advertising costs if you choose to publish your business name in newspapers or other media outlets.
FAQ
Frequently Asked Questions About A DBA
Here are the most commonly asked questions about forming a DBA:
Check the Delaware Division of Corporations website. This website includes information on how to file a DBA, or “Doing Business As,” in the state of Delaware. It also contains a database of all current DBAs in Delaware, which can be helpful to search for a specific business name. As such, the website is a great resource for anyone looking to start a business in Delaware.
Yes, an LLC in Delaware can have a DBA. The structure of the LLC must be established first, then a business name can be registered with the Delaware Division of Corporations. The division will review the application and approve or reject it.
Forming an LLC and then filing a Delaware DBA can be done online or by mail. The application should include information about the LLC’s formation, such as its name, address and contact information, along with the filing fee. Once approved, the DBA is included in Delaware’s public records and can be used for business transactions like opening bank accounts or signing contracts.
To verify a company in Delaware, you must contact the Division of Corporations. They will provide you with information on the company’s business status and other pertinent details. Additionally, you may be able to access public records online, which can help you gain further insight into the company’s history and activities.
You may need to verify a company if:
- You are considering investing in a business entity
- You are an attorney researching the legal status of a company
- You need to establish the authenticity of documents filed with the Division of Corporations
The Division of Corporations can provide you with information such as:
- The company’s official name and address
- Whether the company is active or inactive
- Any pending litigation against the company
- Date of incorporation
Verifying a company in Delaware is an important part of making sure your investments are secure and that you have the most up-to-date information on any business entity.
Filing for a DBA in Delaware can take anywhere from one to four weeks, depending on the complexity of your application. The process typically involves filing an assumed name certificate with the state Division of Corporations and paying a fee. After submitting your paperwork, you will receive a notification that it has been approved or rejected.
If your application is approved, you will be able to start using your assumed name right away. Make sure to keep a copy of the certificate for your records and provide proof of registration when conducting business under the DBA.
On the other hand, if it’s rejected, you’ll need to modify your application according to the state’s requirements and resubmit it for approval. This can add time to the overall process.
Yes, you can have multiple Delaware DBAs for your business. This is a great option if you want to create multiple brands that cater to different audiences or products. Each DBA will be legally registered under the same company name and will provide you with the ability to differentiate between them without having to register the other names as separate entities.
Registering multiple DBAs for your Delaware business will help you protect the individual identities of each and maintain a clear distinction between them. This also allows you to keep track of expenses and liabilities separately, as well as provide more flexibility in choosing different marketing strategies for each brand.
Additionally, you can also register multiple DBAs in other states to expand your presence and visibility. Take note that the process, fees, and requirements for registering a DBA in Delaware may differ from other states.