Doing Business As, also referred to as a fictional name, trading name, or assumed name, is abbreviated as DBA. An entity may conduct business under a name other than its legal name thanks to a legal word. When a nonprofit wants to use a name other than its legal name, a DBA is frequently necessary. To utilize the name “Green Earth,” for instance, a charity group registered as “Friends of the Earth” could submit a DBA application.
Yes, a nonprofit organization may have two names—one legal and one operational. The name that is registered with the state and is used on all legal papers is known as the legal name. The nonprofit utilizes the second name—often referred to as a trade name or DBA—to do business. When it comes to branding and marketing, the DBA name is frequently used.
Yes, as long as it is fair and justified, the creator of a nonprofit organization may be paid a salary. Nonprofit organizations are permitted to pay its employees, including the founders, fair remuneration. However, the pay should not be extravagant and should instead be based on what is fair for the services rendered. The tax-exempt status may be lost if the pay is thought to be excessive. Additionally, People Asked Can I Use the Same Name for My Business and Nonprofit? No, a company’s name cannot also be used by a nonprofit. Because a nonprofit organization and a company have different legal identities, using the same name can be confusing to stakeholders. A nonprofit organization’s name shouldn’t be utilized for commercial gain and should instead reflect its goals and objectives.
The annual return of exempt organizations, Form 990, must be filed in order to change a nonprofit’s name with the IRS. You must provide the organization’s new name and the rationale for the name change on the form. The IRS will update its records with the new name once the form has been processed.
A DBA is a crucial tool for a nonprofit organization that wishes to conduct business under a name other than its legal identity. A nonprofit may have more than one name, but neither of them should be the same as a company name. A nonprofit’s founder may be paid a salary, but it must be fair and justified. You must submit Form 990 to the IRS if you want to rename your nonprofit.