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DBA in Illinois
Business names are often affected by the business’s structure. Sole proprietorships, for example, use the proprietor’s legal name for the business. On the other hand, other business structures like LLCs and corporations use the legal name they had upon filing.
Entrepreneurs like you who want to reach more people and establish a certain kind of branding can be limited by this naming mechanic. Thankfully, there’s a way to use another name for your business without any problems—DBAs.
Definition
What Is a DBA?
A DBA, which stands for “doing business as,” is a fictitious name businesses can use in lieu of their actual legal name. It’s not a legal entity—it’s simply an alias allowing businesses to transact with others using a preferred name.
Assumed business names, or what DBAs are known as in Illinois, allow businesses to use names more appropriate for their identity. For example, an LLC named “Quality Food and Beverages LLC” can use the name “Super Subs Sandwiches” for their sandwich shop or “Bottoms Up” for their drinks store. The specific businesses, however, still belong to Quality Food and Beverages LLC.
Advantages
What Are The Advantages Of A DBA In Illinois?
Assumed business names provide entrepreneurs with various benefits to help their businesses grow. Here’s a quick look at them:
It gives new businesses more freedom in businesses earlier
Illinois encourages all new businesses to file for assumed business names regardless of business structure. A DBA, acquired right at the start of the business, allows new startups to establish their branding early on without having to worry about changing names in the future. With DBAs, new businesses gain more freedom early.
The same principle applies to older businesses that have stagnated or simply want to try out something different from what they used to offer. DBAs can be used to rejuvenate struggling businesses wanting to break free from their old name.
It lets sole proprietors gain more privacy
Sole proprietorships use their proprietors’ legal names when they register their business. It’s required. While this won’t be a problem if you don’t mind using your name to offer services to clients, it will be a cause for concern if you want to maintain your privacy. Using an assumed business name allows you to hide your real name from business promotional materials like flyers, posters, and business cards.
It allows businesses to diversify easily
Illinois LLCs and corporations wanting to diversify can use DBAs to name every venture or subsidiary. Using assumed business names allows bigger companies to open several businesses or branches, each with distinct names. A clothing company named “Clothing Company LLC,” for example, can set up several shops using DBA names “More than Tunics” for shirts, “Easy Peasy Denim” for pants, and “Steppes” for footwear.
The same benefit applies to sole proprietorships and partnerships who wish to try their hand at new projects. Using DBAs will allow you to set up more business ventures than you’d have using your name.
It makes banking easier
Some banks require businesses, regardless of structure, to have DBAs. This makes it easier to segregate bank accounts according to the business. It also helps separate your personal finances from your business’s, which in turn helps minimize the risks of potential mishandling.
It lets franchises use the brand’s name
Those who purchase a franchise and set it up in Illinois need to file for DBAs to be able to use the brand’s actual name. If you purchase a franchise, it will be formed as an LLC with a different name. A Taco Bell franchise, for example, will be an LLC named “489 Taco Bell LLC” to indicate the franchise number. You’ll need a DBA to use “Taco Bell.”
Disadvantages
What Are The Disadvantages Of A DBA In Illinois?
DBAs offer many advantages, but they do not have cons that could negatively affect your business. They have limitations, however, and these could become disadvantageous if you don’t know them.
For instance, assumed business names do not protect legal assets. They do not provide the same amount of protection as LLCs and corporations. They are mere aliases or fictitious names that could be used in place of your business’s legal name.
Next, DBAs can be costly to acquire and maintain in Illinois, depending on your business structure and the year you file for them. Other states have uniform filing fees; some of these are even cheaper than Illinois’. DBAs are also not separate legal entities. They’re just names your existing business can assume for many purposes. You need to have a registered business before you can use them.
Lastly, assumed business names in Illinois need to meet certain naming standards before the state can approve them. Some words, phrases, and abbreviations cannot be used for DBA names. This means you cannot use just anything that comes to mind, no matter how creative the name may be.
DBA Formation
How To Get A DBA In Alaska
Now we move on to discuss the process of getting DBAs in Illinois. The process is straightforward, but it varies depending on your business structure.
If your business is a sole proprietorship or partnership:
Search for business names
First, you must verify if your preferred DBA name is available. Partnerships should do this via the Illinois Secretary of State’s website. On the other hand, sole proprietors need to do this with the local county clerk’s office where the business will operate.
File the application form
Second, you must fill out the Assumed Business Name Application form and submit it to the county clerk’s office online, by mail, or in person. Not all counties offer online DBA applications, so make sure to check.
Publish your new assumed business name
Third, after getting the assumed business name registered, you will need to publish a Copy of Legal Notice of Assumed Business Name in a local newspaper. The newspaper has to be included in the list of approved publications and newspapers, accessible via the county clerk’s office.
The Copy must be published within 15 days of filing the DBA and must be published once a week for three consecutive weeks. After this, proof of publication, which includes a notarized Certificate of Publication and a clipping of the published legal notice, has to be submitted to the county clerk’s office within 50 days of DBA registration.
Pay the fees
Lastly, you need to pay $50 to register your DBA. You can pay using cash, money order, or credit card. The fee is non-refundable, so make sure that the name you have chosen is accurate. If you are sending your application and filing fees by mail, you must send it to the county clerk’s office where your business will operate. You will receive your assumed business name certificate after this.
If your business is an LLC or corporation:
Search for business names
First, check if other businesses in Illinois do not use the DBA name you want. Visit the Illinois Secretary of State’s website to verify.
File the correct form
Second, you must fill out the correct form and submit it to the Illinois Secretary of State. The form varies if your business is an LLC or Corporation, so make sure to check and fill out the correct form. You can also Apply to Adopt an Assumed Name in person or by mail, but fill out the correct form first.
Publish your new assumed business name
Third, after registering the assumed business name, you must publish a Copy of Legal Notice of Assumed Business Name in a local newspaper. The process is similar to applying for a DBA for sole proprietorships and partnerships.
Depending on what county your DBA is registered in, you might need to have a notary public official notarize your paperwork (the above forms) and Certificate of Publication before you submit it to the county clerk as proof of publication.
Pay the fees
Third, you must pay the filing fee to register your DBA name. Illinois’ pricing of DBAs for LLCs, corporations, and nonprofits varies from year to year. It is dependent on when the DBA will expire.
Your new DBA becomes valid on the date it gets filed by the Illinois Secretary of State. It will expire on the first day of the month you filed it in the next year, divisible by five. It can then be renewed every five years after it expires the first time.
Costs
How Much Is A DBA In Illinois?
DBAs in Illinois are more expensive than DBAs in other states like Tennessee, Nevada, and Louisiana. Moreover, DBAs for LLCs, corporations, and nonprofits follow a complicated pricing scheme that could be confusing.
Sole proprietors and partnerships must pay $50 for every DBA registered in Illinois. This amount is non-refundable. The price could go higher depending on the county where the business operates.
For LLCs, corporations, and nonprofits, the price varies with the year the DBA is registered and set to expire. DBA registration and renewal fees in Illinois are prorated if the initial registration is set to expire in less than five years. For example, if you register a DBA on July 15, 2023, it will expire on July 1, 2027. Your registration fee will be $90.
Here’s a quick look at the filing fees depending on the year you register a DBA for your business:
- $30 for years ending in 4 or 9 (ex. 2014, 2019, 2024, 2029)
- $60 for years ending in 3 or 8 (ex. 2013, 2018, 2023, 2028)
- $90 for years ending in 2 or 7 (ex. 2012, 2017, 2022, 2027)
- $120 for years ending in 1 or 6 (ex. 2011, 2016, 2021, 2026)
- $150 for years ending in 0 or 5 (ex. 2010, 2015, 2020, 2025)
Summary
Getting a DBA allows you to do more things with your business in Illinois. It helps you build your brand and diversify your offerings while enjoying added privacy for yourself. The process to get one might not be as simple as in other states, but the benefits you get are worth the effort and cost. If you’re a new entrepreneur, or you’ve been in business for a while now and want to grow your venture, consider getting a DBA 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 Illinois as long as the assumed business names you want to use are available, and you can pay for the filing and subsequent renewal fees. Also, make sure to renew your DBAs at least every five years.
No. DBAs or assumed business names do not provide legal protection for your personal assets. They are mere aliases or alternate names you can use if you don’t want to use your business’s legal name.
No. DBAs are not separate legal entities and are, therefore, non-taxable. You only need to pay registration and subsequent renewal fees to maintain them.
What are the naming restrictions for Illinois DBAs?
Illinois forbids the use of the following in DBAs:
- Words normally used for government agencies, such as “Justice Department,” “FBI,” and “Treasury.” This is to prevent confusion.
- Words implying that your company is in the business of a corporate fiduciary, such as “fiduciary,” “trust,” or “trustee.” You need prior approval from the Secretary of Financial and Professional Regulation to use these words in your DBA.
- Words implying or expressly indicating that your venture is in the business of banking or insurance, such as “bank,” “banking,” or “insurance.” You need the Commissioner of Banks and Real Estate’s approval before using these words.
Also, keep in mind that the state of Illinois can reject your DBA application for other reasons. Approval and rejection of DBA applications are at the Illinois Secretary of State’s discretion.
Yes. LLCs and corporations wanting to change the DBA will be charged $25. You will also have to file an amendment for any changes to the DBA—whether it’s the business address, the owners, or the nature of the business the DBA is associated with. Amendments must be filed with the county clerk where the DBA is registered.
Yes. LLCs and corporations wanting to cancel the DBA will be charged $5. You will also have to file an amendment to cancel your DBA with the county clerk where it was registered.
Yes. Business owners who fail to renew their Illinois DBAs on time will have to pay a $100 penalty on top of the renewal fee. Moreover, those who fail to renew the expired DBA within 60 days of expiring will lose the right to the assumed business name.
Yes. Business owners who fail to renew their Illinois DBAs on time will have to pay a $1No. DBAs are aliases created as an option for businesses that want to use names other than their legal names. A trademark, on the other hand, is an intellectual property registration meant to provide legal protection for your business’s brand. The former is meant to help you establish an identity. The latter is meant to protect your brand if someone illegally copies it.00 penalty on top of the renewal fee. Moreover, those who fail to renew the expired DBA within 60 days of expiring will lose the right to the assumed business name.