How and Why Would Your Business Use a DBA or Fictitious Name?

You’ve probably seen the “DBA” letters in (or before) a lot of company’s names. But what is that, what does it mean, and is it something you should consider for your business?

What is a DBA?

A DBA, which stands for “doing business as,” is the colloquial term for a fictitious name. Think of a DBA as a second name that you hold out to the public that’s different from your actual corporate name.

Helping With Public Image

One reason that people use DBAs is that their true corporate name may not be “marketing friendly.”

If Jon and Tom start a computer consulting business, they may have named the company, for example, “TJ Inc.” That hardly tells the public who they are or what they do. So, they might use a DBA called “Tommy John Computing,” or “TJ Technology,” or something catchy, memorable, or which tells the public who they are or what they do.

Expanding The Business

Another use for a DBA is to try out a new business area. Let’s say that Tommy and Jon in our example above, want to get into teaching computer classes. Maybe they want to market that as “TJ Computer Education,” or “Help With TommyJon,” or something catchy like that.

DBAs can allow you to get very specific—say you wanted to market your business to a certain geographic region, or to a specific demographic. All of that can be done through specifically named DBAs.

In some cases, banks may even allow you to have separate bank accounts for each fictitious name. This can allow you to separate business ventures or divisions of your business for accounting and compliance purposes.

Trademark and IP

Fictitious names also may help you trademark your name. To get a trademark, you have to show that you are using a mark in the public eye, and that the public associates your mark with your business brand or product.

With a catchy DBA or fictitious name you can start to build brand recognition under that name, and as your reputation grows, you will have something that can be protected through a trademark, as you use that fictitious name in and to the public.

Still the Same Company

Note that a fictitious name isn’t actually a separate company. If you want multiple companies, you’ll have to start and legally form multiple companies. Registering a fictitious name doesn’t start a new company, nor does it hide yours, or create any anonymity—anybody can look in the public records to see who is “doing business as” the fictitious name.

There is no legal requirement to have a DBA. But in certain situations it may be a good idea. And if you are going to be marketing yourself a certain way, or holding out your business to the public, and you want to present a specific image or brand a DBA may be right for you.

Questions about forming your business? The West Palm Beach commercial litigation lawyers at Pike & Lustig can help you with your new company or with legal issues related to expanding your existing business.

Sources:

dos.fl.gov/sunbiz/start-business/efile/fl-fictitious-name-registration/

efile.sunbiz.org/ficregintro.html