Can a DBA Open a Bank Account?

Instead of using their official business name, many small enterprises use a Doing Business As (DBA) name. A DBA is a fictional name that a company can use to conduct business under if they don’t want to go through the formal name-change procedure. But the issue of whether a DBA can obtain a bank account comes up.

Yes, a DBA is able to open a bank account. The DBA owner’s company name must, however, be used when opening the account. As a result, the company needs to have an Employer Identification Number (EIN) and all the necessary legal paperwork. The bank can also demand paperwork demonstrating the DBA’s legitimacy.

It is essential to remember that a DBA does not create a different legal entity. It is merely a name that a company uses to conduct its operations. As a result, the business owner is still legally responsible for any financial transactions carried out under the DBA.

In a similar vein, two companies may share the same DBA name. This is only conceivable, though, if the companies are engaged in activities in various states or sectors. Two businesses in the same state or sector are not allowed to use the same DBA name since it may cause customer confusion.

So long as a bank account is formed under the legal business name and the necessary legal paperwork is given, a DBA is able to do so. A DBA does not create a new legal organization, and any financial transactions done under the DBA are still legally obligated to the business owner. This is an important point to remember. Finally, if two companies operate in different states or different industries, they can both use the same DBA name.