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Virginia DBA
Virginia is a state with a long and storied history, from the birth of America to its modern-day status as one of the most business-friendly states in the country. And for those who are looking to do business in Virginia, you might be looking for ways to register your company.
A “Doing Business As” is a viable option for those looking to separate their business identity from their personal identity. On that note, let’s look at the steps necessary to register as a DBA in Virginia and the potential benefits of doing so.
Definition
What Is a DBA?
A DBA is a business registration that allows an entrepreneur to operate under a different name than their legal name. It’s sometimes referred to as an assumed name, trade name, or fictitious name in some states. A DBA is required when you want to conduct business with customers and vendors without using your own legal name.
For instance, if your legal name is Kelly Kay and you want to start a business called “Kelly’s Hair Salon,” then you would need to register for a DBA in order to open up shop. The same goes if you wanted to go by the name “Kelly’s Makeup Services.”
Advantages
What are the Advantages of a DBA in Virginia?
These are the advantages of a DBA in Virginia:
Cost savings
A Virginia DBA is a viable option for entrepreneurs who want to start a business without incurring the high cost of registering and filing documents with the state. You just have to pay a minimal filing fee. This is much lower compared to filing the Articles of Organization for a Virginia limited liability company (LLC), which starts at $100.
Flexibility
By registering a DBA in Virginia, you can create an additional operating alias for your company without having to establish another entity. This is useful if you want to start offering services or products under a different name or if you simply don’t like the sound of the legal name of your company.
This level of flexibility can be beneficial for entrepreneurs and small businesses, allowing them to quickly build their brand without having to go through the lengthy process of incorporating a new company.
Brand identity
Speaking of brand identity, a DBA can help potential customers remember your business better. By using a trade name, you can create a unique identity that is distinct from other businesses operating in the same field. This will help consumers differentiate between companies and make it easier for them to choose your business over another.
With your Virginia DBA, you can also promote your business in a more effective manner, allowing you to stand out from the competition. From creating unique social media campaigns to launching ad campaigns that feature your trade name, there are countless ways you can use your DBA to make sure people recognize and remember your company.
Streamlined finances
If you’re planning to start a business in Virginia, registering for a DBA provides certain financial advantages. A DBA can help you get an official business bank account. As such, you can keep your business funds separate from your personal funds, making it easy to manage your finances and track expenses.
Managing cash flow is crucial for businesses of all sizes. With a dedicated bank account, you can better control your spending, save money, and keep track of income. Ultimately, this can make it easier to file taxes and take advantage of tax deductions.
Privacy
Small business owners often face the dilemma of having to choose between their personal privacy and making their business visible. With a Virginia DBA, entrepreneurs can have both. It allows business owners to separate their private affairs from those of the company by creating an alternate name that is distinguishable from their own. As such, you don’t have to worry about your private information being shared with the public.
Disadvantages
What are the Disadvantages of a DBA in Virginia?
Meanwhile, you also have to consider the disadvantages of a Virginia DBA, such as:
Personal liability
When you register for a Virginia DBA, it offers the benefit of not having to use your personal name when conducting business. However, it also carries certain drawbacks, specifically potential personal liability.
A DBA is not an independent entity from its owners. This means that all who own the DBA can be held personally liable for any action taken by the company and for any debts incurred through its operations. As such, creditors could come after individual owners for any of the DBA’s debts.
This can be problematic if the DBA contracts with a client and the contract has to be enforced in court. If the other party takes your business to court, they can sue all owners of the DBA personally. This is something to consider when registering a Virginia DBA.
No name protection
Additionally, you won’t have exclusive rights to the name of your business when you register a DBA in Virginia. Although you will be able to use that name for your business activities, other companies and individuals could also form businesses using the same or similar names.
This can cause brand confusion among customers and can also make it difficult for you to trademark the name in the future. Ultimately, it can affect the growth and recognition of your business, as customers may not be able to distinguish you from other businesses with similar or identical names.
Limited business area
A Virginia DBA is only valid within the state. This means that if you want to expand your business outside of the area, then you will need to register another DBA in that state. For example, if you want to do business in Maryland or DC, then you would need to have a separate DBA registration for those states.
It would pose a problem if the trade name is already being used by another business in that state. As such, you’ll have to come up with a different name or pay for the right to use the same name.
Fewer tax benefits
Unlike corporations, LLCs, and other types of business organizations, DBA businesses don’t have their own tax identities. As a result, any taxes due on profits would be reported on the owner’s individual income tax return. This means that owners of DBAs can’t benefit from corporate deductions or establish retirement plans for themselves in order to lower their taxable income.
DBA Formation
How to Get a DBA in Virginia?
Now that you’re aware of the advantages and disadvantages of a Virginia DBA, here are the steps to take if you want to push through with this business registration:
Find a unique name
Look for a unique name that encompasses your business’s purpose and values. Keep in mind that DBA names must be different from any other registered business name in Virginia, so it’s important to choose something distinctive.
Then, do a quick search on the Virginia State Corporation Commission (SCC) website to ensure that your assumed or fictitious name is still available. This step is important to make sure you don’t violate any copyright laws.
File the DBA application
Next, on the same website, you can begin the application process for your DBA. This includes filing the DBA registration form, which will ask for the names of the DBA owner(s), assumed or fictitious name you’ll be using, and SCC ID number or address.
Sole proprietors will have to complete the Certificate of Assumed or Fictitious Name Business Conducted by an Individual, while those under LLCs, corporations, LPs, and general partnerships will have to fill up the Certificate of Assumed or Fictitious Name Business Conducted by an Entity.
Additionally, you can also file by mail. You just have to print the appropriate forms and send it to the Virginia SCC’s Clerk’s Office.
Wait for confirmation of registration
You’ll have to wait for about two to three business days to get your DBA registration. You can also get expedited services, but this will cost a hefty additional fee.
As such, it’s important to plan ahead. Once you’ve submitted your application and paid the required fee, you’ll have to wait for the confirmation letter from the Virginia State Corporation Commission.
Costs
How Much Does a DBA Cost in Virginia?
Virginia DBAs cost $10, regardless of business structure. For expedited service, you’ll have to pay an additional $100.
Plus, the state doesn’t require publishing a public notice for business registration. As such, setting up a DBA in Virginia is relatively inexpensive and straightforward.
FAQ
Frequently Asked Questions About A DBA
Here are the most commonly asked questions about forming a DBA:
No, you don’t need to worry about having to renew your DBA in Virginia. As long as there aren’t any changes to the original DBA filing, it will remain valid indefinitely.
Yes, you can cancel your Virginia DBA registration by filling up the Certificate of Release of Assumed or Fictitious Name form. This form must be signed by all the business owners and submitted to the State of Virginia. Once the cancellation is processed, you are no longer in business as an assumed or fictitious name.
You can have an unlimited number of DBAs in Virginia. Each DBA must be registered with the State Corporation Commission, and you will need to submit a separate application for each one.