DBA in Tennessee
Businesses use names depending on their structure. Sole proprietorships, for example, use their owners’ legal names for business. LLCs and corporations, on the other hand, use the legal name during their formation as the company name.
Business owners in Tennessee who want to use a name other than what they used to register should file a DBA, more commonly known as an “assumed” business name. Doing this brings some benefits to both the owner and the business, more so if it is a sole proprietorship. In this article, we’ll discuss what a DBA is, what it is used for, its benefits, and how to file one in Tennessee.
What Is a DBA?
DBA, an abbreviation that stands for “doing business as,” is an alias or fictitious name that is used for the business in place of the company’s legal name. It doesn’t replace the business’ legal name in Tennessee and is instead a naming alternative your business can have.
Assumed business names give companies the option to use a name that fits their identity better. For example, if you are a sole proprietor named Joey Ranch, your business will use your legal name, even if it’s a fitness company or a music store. With a DBA, you can use names like “Joey Fitness” or “The Music Ranch” to fit your business better.
What Are The Advantages Of A DBA In Tennessee?
Before we talk about how you can file for a DBA, you should first know the benefits you get from having one.
It’s easy to get a DBA in Tennessee
Tennessee has an easy, straightforward process for DBA registration. The process may vary with the business type, but it won’t require a lot of paperwork like Tennessee LLCs or corporations do. It’s also cheap and unlikely to make a dent in your business’s finances.
It provides added privacy for solo owners
Sole proprietors can use DBAs to avoid having their legal names printed on flyers, posters, and other promotional copies to advertise their offers in Tennessee. It allows business owners to hide their identities from people. This is perfect for entrepreneurs who want to have more privacy in the customer-facing aspects of their business.
You can establish your brand better with DBAs
DBAs are meant to give you a better naming option so you can market your services or products better. If you file a DBA in Tennessee, you will be able to set expectations that customers will have. For example, by using the name “Tennessee Vinyl Records Store,” you will attract music-loving customers more than when you use your legal name.
It makes banking easier for your business
Most, if not all, banks in Tennessee require businesses to have DBAs before opening a bank account. This allows business owners to separate their personal finances from their company’s money. While a DBA won’t offer personal asset protection, it does help with asset segregation.
What Are The Disadvantages Of A DBA In Tennessee?
While DBAs offer significant advantages, they also have certain limitations that could be disadvantageous if not understood properly. Here’s a quick look at them:
No personal asset protection
Businesses that want to have protection for personal assets must be registered as LLCs or corporations. A DBA only adds an alias to a business. It doesn’t add asset protection.
Not a separate entity
DBAs are not entities separate from your main business. This means that in the event your business, which uses a DBA, gets sued for valid reasons such as negligence or false representation, your main business will be the one receiving the impact.
Has some naming restrictions
While you’re free to choose any DBA for your business, your preferred assumed business name must adhere to Tennessee’s requirements. It must be unique and not contain certain terms or words that the state prohibits. This means you cannot use any name that comes to mind.
How To Get A DBA In Tennessee
As mentioned, it’s easy to file a DBA in Tennessee. The process, however, depends on whether your existing business is a sole proprietorship, partnership, LLC, or a corporation. Regardless of this, the process is straightforward and doesn’t take long to finish. Here’s what you need to do.
If your business is a sole proprietorship or partnership:
Check for the availability of your preferred DBA
Before anything else, you need to first check if your preferred DBA is still available in Tennessee. Visit the Tennessee Secretary of State’s website to check. The website allows you to search for DBAs that start with or contain the name you want. It should show you a record of registered names, if any. If your name is not listed, this means it’s available, and you can use it.
You will also need to check the business database of the county where you will file to make sure it’s available for use there.
File with your local county clerk
If you run a sole proprietorship or partnership, you must file a Business Tax License Application with the county clerk where you do business. You then file a DBA with the same county. You file these and pay the respective fees mandated by the county.
Once approved, your DBA will last for only five years. But it will be automatically renewed once you file your tax return.
If your business is an LLC, LLP, or corporation:
Verify the availability of your preferred DBA
Visit the Tennessee Secretary of State’s website to verify if the DBA you want to use is still available. The name must be unique and not be used by other businesses in your state.
File the DBA with your Secretary of State
You will need to go straight to the Tennessee Secretary of State’s office or website to file a DBA for your business. The form varies depending on the type of business you have: a limited liability company (LLC), a limited liability partnership (LLP), or a corporation.
Tennessee refers to DBAs for these business types differently:
- Assumed Limited Liability Company Name
- Assumed Limited Liability Partnership Name
- Assumed Corporate Name
Once your assumed business name is approved, it will be valid for five years. You will need to renew it yourself, whether by mail or in person.
How Much Is A DBA In Tennessee?
Tennessee doesn’t charge much for DBAs. The amount depends on your business type, but it’s not as expensive compared to DBAs in other states.
If you filed a DBA for a sole proprietorship or partnership, you will be charged $15. Renewals every five years are free and are automatically processed when you file your income tax return. Meanwhile, if you filed a DBA for an LLC, LLP, or corporation, you need to pay $20. Renewals every five years will cost you $20 as well.
DBAs are used as alternate names when you don’t want to use your business’s legal name. They are easy to file in Tennessee and are very affordable. While the filing process varies depending on business type, the benefits are the same. Get a DBA for your business in Tennessee today!
Frequently Asked Questions About A DBA
Here are the most commonly asked questions about forming a DBA:
The duration depends on the business type. If you run a sole proprietorship or partnership, you will have to verify the processing time with the local county clerk, as it depends on them.
On the other hand, if you run an LLC, LLP, or corporation and file a DBA with the Tennessee Secretary of State, you will need to wait for 3-5 business days if the filing is done by mail. If you registered online, you will have it processed immediately.
Yes. You can have as many as you want as long as you can pay to register and maintain them. All of them must be unique and should meet Tennessee’s standards.
No. Incorporated businesses provide personal asset protection, but DBAs do not. If your company is a sole proprietorship or partnership, getting insured will help you if you get sued while doing business.
No. DBAs are additional business names used in lieu of legal names. They do not add to the taxes you pay. They also do not reduce tax responsibilities.
Tennessee forbids the use of certain words in DBAs or assumed business names. These include the following:
- Words implying that the business is used for an unlawful purpose
- Words implying that the business is part of or affiliated with charities, religious groups, veterans’ groups, fraternities, and other related groups
- Words that could be mistaken for a government organization or agency, such as “Justice Department,” “Treasury,” “Chamber of Commerce,” “FBI,” and so on
- Words such as “accountant,” “engineer,” “university,” and the like. These can be used only if the necessary paperwork is completed
It depends on your business type. Sole Proprietorships and Partnerships cannot make any changes to their existing DBAs. To make amendments, these businesses must file new DBAs with the state.
On the other hand, LLCs, LLPs, and corporations can make changes by completing a name change application with the Tennessee Secretary of State. The form used for the purpose varies with the business type, but the processing fee is still $20.
Yes. The process differs with business type, however. For sole proprietorships and partnerships, withdrawal or cancellation of DBAs is made by filing a final tax return with the Tennessee Department of Revenue.
For LLCs, LLPs, and corporations, a cancellation form has to be completed and submitted to the Tennessee Secretary of State. The form varies with business type as well. Regardless of the form, the cancellation fee is $20.
No. DBAs are fictitious names used as a substitute for the business’s legal name. A trademark, on the other hand, is an intellectual property registration used to protect the said IP on the local and national levels. The former is but an alias that doesn’t provide legal asset protection. The latter provides protection for your brand.