When Is a “Doing Business As” Name Required?
As we have discussed in previous posts, a “Doing Business As” name (“DBA”) or fictitious name is a simple, cost-effective way to operate an entity under a different name(s) than that listed on the entity’s formation filings.
Omitting the "Corporate Ending"
During the formation process, Delaware corporations and LLCs are required to list a business name on their respective formation filings. A company’s name must meet certain criteria. For example, the name of a Delaware corporation must contain one of the following corporate endings: Association, Company, Corporation, Club, Foundation, Fund, Incorporated, Institute, Limited, Society, Union, Syndicate or abbreviations of any of those endings (e.g., “Corp.”, “Inc.”, “Ltd.”). Similarly, the name of a Delaware LLC must contain one of the following endings: LLC, L.L.C., or Limited Liability Company. However, in any marketing pieces or signage, the corporate ending seems odd, and it simply may not flow or convey the message of the branding/marketing campaign.
For an abbreviated name used on signage and similar marketing media, a DBA filing is less important. However, when a company executes contracts or otherwise acts in a legal capacity under a different name, a DBA is appropriate. Here, a DBA filing would allow parties to the contract to know the true name of the company in order to, for example, perform due diligence before executing the contract. Alternatively, abbreviating Brett’s Diner LLC as “Brett’s” on flyers and in marketing materials should not typically raise an issue.
Required Vs. Precautionary Use of DBAs
DBA names are governed by rules and filing requirements on a state by state or even county by county basis, so if a company has concerns or wishes to take the conservative route, registering a DBA in the county or state of the business’ location is a proactive means to ensure it can operate under the name by which it wishes to use locally, such as “Brett’s” above.
Some companies have quite unappealing names for an operating business, such as, for example, Special Purpose Vehicle XXVI. It may, however, call itself “Brett’s Home Cooking” in its day-to-day operations, or something similarly different from the legal entity name. In these situations, we traditionally see clients explore filing for a DBA. If you pay attention to local businesses signage and advertising, businesses frequently do not use their more formal name with designating ending.
Many business owners also inquire about their domain name, and whether it must reflect the company’s legal name. Take again the LLC known as “Brett’s Diner LLC.” It may reserve BrettsDinerDE.com as its domain name. As is the case with marketing, using a domain that does not necessarily reflect the legal name is common, and would not typically require a DBA filing. Out of an abundance of caution, however, clients will often file a DBA listing its domain name as well.
If your Delaware LLC or corporation is operating in another jurisdiction, you may first need to file to do business in the state at hand (referred to as Foreign Qualifying) before filing for the DBA there. Clients that are formed in and physically located here in Delaware can reach out to the Prothonotary’s office in the county (or counties) in which you are doing business (Sussex, Kent, and/or New Castle):
New Castle County – (302) 255-0800
Kent County – (302) 739-3184
Sussex County – (302) 855-7055
Updating Financial Crimes Enforcement Network (FinCEN) about the DBA
The new Corporate Transparency Act (CTA) went into effect on January 1st, 2024. This will change the way beneficial ownership information is reported nationwide. The CTA mandates "reporting companies" to file beneficial ownership information (BOI Report) with FinCEN, the Financial Crimes Enforcement Network, a division of the US Treasury Department. Reporting companies include entities created or organized in the US, as well as foreign-organized entities conducting business on American soil. When the initial BOI report is submitted to FinCEN, the entity must also include any DBA (Doing Business As) names under which the company operates.
If an entity files for a DBA after submitting the initial BOI report, it is crucial for the company to provide an updated BOI report within 30 days. Staying ahead of FinCEN requirements ensures that your company remains compliant with federal regulations and avoids penalties.
While we do not provide FinCEN filing services, we recommend www.FincenReport.com for assistance. They offer a seamless platform for submitting beneficial ownership information (BOI) in compliance with the Corporate Transparency Act (CTA), streamlining the process for efficiency and ease.
Alternatively, reports can be submitted directly to FinCEN.
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source's content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.
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There is 1 comment left for When Is a “Doing Business As” Name Required?
Jay said: Wednesday, July 15, 2020I really like these blog posts. It’s a nice way to learn bite sized pieces rather than feeling overwhelmed trying to dig through pages of info. Also it’s great because I can learn more about topics I didn’t think of initially. ThankS HBS!
HBS Staff replied: Thursday, July 16, 2020Our pleasure! Glad you're enjoying our blog.