How to Register a DBA in Texas (Step-by-Step Guide)
Starting a new business in Texas for the first time involves making many significant decisions. It can be overwhelming with numerous legal terms and acronyms to get accustomed to. This article will emphasize the importance of a DBA (Doing Business As) and its meaning, the circumstances under which your business requires one, and the process to obtain one in Texas.
What is a DBA?
The abbreviation DBA refers to a company or an individual that operates under a made-up business name.
A company can choose a more appealing trade name than its official title by opting for a DBA. This method allows a business to conduct its operations under a different name while remaining legally responsible for its actions under its legal name.
For example, a sole proprietor who sells handmade instruments, like Steve Clarke, may register a DBA name like “Handmade guitars by Steve” instead of his name.
Registering a DBA is a common practice for sole proprietors, partnerships, and corporations that want to use a fictitious name that better describes their products or services or simply want to utilize an alternative name.
The process generally involves:
- Selecting a unique name.
- Verifying its availability.
- Submitting the appropriate paperwork to the appropriate government entity, such as the Secretary of State or the county clerk’s office.
- A processing and registration fee.
Texas DBA name registration
Choose your name
A “doing business as” name in Texas is often called an “assumed name certificate.” The first part of registering is choosing your proposed name and checking to see if it is already used.
Before this, there are a few things to remember when setting up an assumed name.
- Real name: You cannot register your birth name as a DBA.
- Mislabeling: A DBA is a brand identity; therefore, you cannot add “limited liability company” or “corporation” to the name. You must register as an LLC or corporation to enjoy those benefits.
- Names already in use: When registering an assumed business name, it’s important to note that doing so doesn’t prevent others from registering the same name.
Check name availability
There are three ways you can check the availability of your desired name:
- Call: You can contact the State Business Information department at 512-463-5555. They are open Monday to Friday from 8 a.m. to 5 p.m. CT.
- Email: You can also email the Texas Secretary of State at [email protected] and request they check your name’s availability.
- Online Database: You can use the Texas Comptroller’s taxable entity search or the Secretary of State’s SOS Direct site to run an online name search. The taxable entity search is free, but SOS Direct charges $1 per search.
The online name database is not a comprehensive list of all Texas businesses. You may want to contact the County Clerk’s office if you cannot find the DBA you are looking for online.
Remember: Registering in Texas does not provide exclusive rights to the name. It merely serves as a public record that you are using the assumed name for your business. Therefore, to protect your name, you may consider registering it as a trademark with the United States Patent and Trademark Office (USPTO). This will provide you exclusive rights to use the name for your business in Texas and the United States.
Register your name
There are a few steps to take, which differ slightly depending on the type of business entity.
As a sole proprietorship or partnership
- File an assumed name certificate with the county clerk’s office where your business is located. The forms are unique to each county clerk’s office, but the forms are relatively similar.
The information required on the Assumed Name Certificate form normally includes the following:
- The assumed name under which your business will operate.
- The full name and the address of the owner or owners of the business.
- The physical address of the primary place of business for the assumed name.
- What kind of business that will be operating
- A statement declaring that the owner is conducting business under an assumed name.
- A signature and notary of the owner or owners of the business.
- Your contact information
As a corporation, LLC, or limited partnership
- Fill out a certificate of formation with the Texas Secretary of State’s office if you operate as a corporation, limited liability company (LLC), or limited partnership (LP). The certificate of formation will include the business’s name, among other information.
The form (form 503) can be obtained from the Texas Secretary of State’s website. You can also file your 503 form on SOSDirect.
- File forms online or deliver them to the James Earl Rudder Office Building in Austin or mail them to the office address at:
Secretary of State
Austin, Texas 78711-3697
Pay your filing fees
As a sole proprietorship or partnership
The cost depends on the county where the business is located.
The filing fee ranges from $10 to $50, depending on the county. Some counties may charge additional fees for certified copies of the registration.
It is important to note that many county clerks require a notary on the assumed name registration form, which may incur further costs.
As a corporation, LLC, or limited partnership
The cost for filing and DBA as an LLC is $25. You can pay by cash or credit card.
The secretary of state does not require forms to be notarized.
Renew, amend, or withdraw your DBA
- The certificate is valid for ten years.
- You may renew the certification within six months of its expiration date.
- If you no longer want to use the assumed name, you must file a certificate of abandonment using Form 504.
It is important to note that you can’t amend a DBA certificate. If you decide to alter the name of your business, you will need to fill out a new form instead of modifying the existing certificate.
Obtain an EIN
Business owners must obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) to identify their business entity for tax purposes.
- A DBA does not create a separate legal entity.
- If the business is a sole proprietorship and does not have employees, the owner can use their Social Security number as their tax ID instead of obtaining an EIN.
- However, an EIN must be obtained if the DBA hires employees or wants to establish a separate business bank account.
Open a business bank account
Once you have obtained your DBA and EIN, opening a dedicated business bank account is recommended.
Opening one provides many benefits, like segregating your personal assets from business costs and facilitating transactions such as accepting checks and credit card payments.
- Texas Secretary of State
- Texas Comptroller’s taxable entity search
- County Clerk’s office database
- SOS Direct site (to run an online name search)
- Form 503 – Assumed name certificate
- Form 504 – To withdraw your name
- United States Patent and Trademark Office (USPTO)
Advantages and disadvantages of a DBA
There are many advantages to registering a DBA:
- Enhanced flexibility: A DBA name can be altered or updated more quickly and efficiently than a legal business name, allowing business owners to adapt to shifts in their products, services, or market conditions more flexibly.
- Segregation of personal assets and business finances: Registering for a DBA allows a business bank account to be opened, allowing the use of the business name on financial transactions instead of the account holder’s name.
- Increased branding opportunities: A well-crafted DBA name can be more descriptive and memorable than a legal name. This alias can help increase brand recognition and improve marketing and advertising opportunities.
- Cost-effective solution: Compared to other business structures, such as Corporations or Limited Liability Companies (LLCs), registering is typically less expensive and less complex, making it a cost-effective alternative for small businesses.
There are also a few drawbacks to having a DBA:
- Limited legal protection: Unlike other business structures, such as LLCs or LLPs, DBAs do not offer personal liability or legal protection. This can mean that the business owner is personally responsible for all debts, obligations, and lawsuits related to the business.
- Increased Legal and Administrative Requirements: Using a new name necessitates registering the name with the appropriate government agency and complying with all legal requirements, which can be time-consuming.
Who needs a DBA?
- Sole proprietors: Individuals who run a business alone don’t create a separate legal entity. A DBA allows them to use a different name for marketing their products or services and gives them more flexibility to adapt to changes in the market.
- Partnerships: Joint ventures between two or more individuals who want to operate under a different name than the partners’ names. Partners can file a DBA to represent their partnership and increase brand recognition.
- Corporations: Businesses that want to use a name different from their name or diversify their business activities under multiple names. For example, if a corporation has a subsidiary that sells software under the name “Tech Solutions LLC,” but it also wants to sell hardware, it can file a DBA for “Tech Hardware” to create a distinction between the two business activities.
- Limited liability companies (LLCs): LLCs are flexible business structures that allow owners to limit their liability and protect their assets. However, LLCs can also file a DBA to conduct business under a different name or brand.
Why or why wouldn’t you need a DBA?
You would need a DBA if:
- You intend to operate your business under a name other than yours or your company’s.
- You want a trading name that is easier to market, remember, or describe your products or services.
- You are a sole proprietor, partnership, corporation, or LLC and want to conduct business under multiple names.
- You want to test a new product or market without changing your legal name.
You may not need a DBA if:
- You are operating your business under your personal or your company’s legal name.
- You are a single-owner LLC that does not need to perform business using a name other than your name or the name of your LLC.
What’s the difference between a DBA and an assumed name certificate?
There is no difference between the two. It is a question of semantics.
Is my DBA unique?
In Texas, your DBA is not unique. We recommend filing with the United States Patent and Trademark Office for a unique name.
What’s the difference between a DBA and an LLC in Texas?
DBAs do not provide any asset protection and are not recognized at the federal level. They are simply a name change. In contrast, an LLC is recognized federally, may be taxed as a corporation, and provides its owners with limited liability protection from potential business debts.
Is a DBA a legal entity in Texas?
In Texas, a DBA does not constitute a distinct legal entity. Instead, it permits businesses to conduct operations under an alternate name.
Is filing a DBA as a general partnership the same process as an LLC?
No, the process is different. There are other naming requirements as well as registration processes and costs.
How long is the processing time to register a Texas DBA?
It typically takes five to seven business days to register a name in Texas through regular processing. Expedited services are also available for an extra fee per document. Filing online usually results in faster processing times than filing by mail.
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