It’s crucial to be aware of the legal requirements if you’re starting a business. The filing of a DBA, or “Doing Business As” declaration, is one of the essential procedures in starting a business. You can legally conduct your business under a different name than your own by submitting a DBA file. We’ll go through what a DBA filing is, why you need one, and other relevant topics in this article. What Exactly Is a DBA Filing? A DBA file is often referred to as an assumed name certificate or a fictitious business name statement. It’s a legal document that enables a business owner to use a name other than their own to conduct business. If you’re a sole owner with the name John Smith and wish to operate your business under the name “Smith’s Services,” for example, you must submit a DBA. Why Do You Need to File a DBA Statement? A DBA must be submitted for a number of reasons. First off, it gives you the option of operating a business under a name other than your own. If you want to give your company a unique brand identity, this is helpful. Second, in the majority of states, a DBA file is mandated by law. Without submitting a DBA, conducting business under a different name might result in fines and legal issues. Is an EIN Required to Open a Business Bank Account? The IRS issues firms with a special identification number known as an EIN, or Employer Identification Number. To open a business bank account, file taxes, and recruit staff, you must an EIN. However, if you’re a sole proprietor, you can create a business bank account without an EIN by using your Social Security Number (SSN). Do You Need a Business Account for Your Small Business? A business account is absolutely necessary for your small business. A business account makes it simpler to manage your accounts and file taxes by keeping your personal and business finances separate. Additionally, it lends credibility to your company, enabling you to cultivate successful relationships with lenders and investors.
Can You Register Your Company as a Sole Proprietorship? You can give your company any name you choose if you’re a sole proprietor, therefore yes. However, you must submit a DBA if you wish to run your company under a name other than your own. What Separates a Sole Proprietorship from a Self-Employed Person? Being self-employed entails working for yourself and being your own employer. In a sole proprietorship, the business owner and the company are treated as one entity for tax and legal purposes. Sole proprietors are therefore independent contractors that operate a firm under their own name or a DBA.
To sum up, registering a DBA is an essential first step in beginning and running a business under a name other than your own. Additionally, it’s critical to file taxes, establish a separate company account, and, if required, obtain an EIN. By being aware of these legal obligations, you can make sure that your company runs efficiently and stays out of trouble with the law in the future.