How to Register a DBA in Alabama (Step-by-Step Guide)
If you are starting your own business in Alabama, there are a lot of important decisions to make. There are countless legal terms to familiarise yourself with and acronyms aplenty. In this article, we will focus on a DBA. We will look at what a DBA is, when or if your business needs one, and the steps to apply for one in Alabama.
What is a DBA?
The acronym DBA, which stands for ‘doing business as,’ represents a company or individual operating under a fictitious business name. It is often called a “fictitious name,” “assumed name,” or “trade name.”
A DBA is a solution if your company desires a more marketable name than its official title. It allows a business to operate under a different name while still being legally responsible for the business under its legal name.
For example, if Steve Clarke owns a sole proprietorship selling handmade instruments, he can register a name, such as “Handmade guitars by Steve,” to market his products and services instead of using his own name.
Registering a new DBA varies by state but typically involves:
- Choosing a unique business name.
- Checking for availability.
- Filing the proper forms with the relevant government agency, such as the Secretary of State or the county clerk’s office.
- Paying the DBA filing fees.
Alabama DBA name registration
Choose your name
The first step is to choose a name. The name must not be identical or similar to any other business in Alabama. There are also naming guidelines to keep in mind:
- Avoid using any banking-related words without a letter from the Alabama Banking Commissioner’s Office or any insurance-related words without a letter from the Alabama Insurance Commissioner’s Office.
- Avoid any words that could cause confusion between your corporation and a government agency (FBI, Treasury, State Department, etc.).
- Don’t use professional designations in the name (e.g., engineering, attorney) without a copy of the license of one officer/member or a letter from the governing agency allowing the use of the name without licensing.
Check name availability
You can check the name availability by visiting the Alabama Secretary of State website and using the Business Services menu.
Select “Business Search” from the menu and enter the name you are searching for.
This will show you any DBAs that match your search criteria and information about the business owner, filing date, and status.
You can verify a DBA by contacting the Alabama Secretary of State’s office.
Once you have confirmed your name is unique and available, we recommend acquiring a domain. In Alabama, you must show that you have been using the name before it is registered. This will also allow you to create your business website, a useful tool for marketing your brand.
Start using your name
In Alabama, it’s mandatory to have operated under your trade name before registering it. We recommend starting to use it immediately.
You’re required to provide three “specimens” of trade name usage during the application process.
These specimens can be:
- Business cards
Make sure your specimens are legible and in good condition.
The trade name application will request information on when and where you first used the trade name in any state and specifically in Alabama. It’s essential to keep track of this information.
Register your name
Alabama’s DBA filing occurs at the state level.
You can file either online with the Secretary of State’s website or print and complete the Trade Name form to mail.
Some important sections of the form include:
- Section 4: The proposed trade name
- Section 5: Description of the business
- Section 6: An explanation of how the name will be used
- Section 11: Date the trade name was first used
The mailing address is:
State of Alabama Office of the Secretary of State
PO Box 5616
Montgomery, AL 36103-5616
Pay your filing fees
Registering a DBA costs $30.
The fees can be paid in cash or by credit card. If paying by credit card, you must complete the authorization form.
Renew, amend, or withdraw your DBA
- Remember to renew your Alabama DBA every five years to avoid losing the right to use your business name.
- The renewal process can be completed on the Secretary of State’s website or through mailing the Application to Register or Renew Trademark or Trade Name to the State of Alabama Office of the Secretary of State.
- If you need to amend or withdraw your DBA, contact the Alabama Secretary of State’s Trademarks Division.
Obtain an EIN
The IRS provides business entities with an Employer Identification Number (EIN) for tax purposes.
If a sole proprietor has no employees and plans to use their Social Security number as a tax ID, they can do so. An EIN is required if a DBA has employees or uses a separate business bank account.
Getting an EIN is possible through an online or mail application.
Open a business bank account
After acquiring your EIN, you can establish a business bank account under your newly registered name.
A separate account helps distinguish your business finances from your personal assets, enabling you to accept checks and credit card payments more efficiently.
Advantages and disadvantages of a DBA
There are many advantages to registering a DBA:
- Flexibility: A DBA name can be changed or updated more easily than a legal name, giving business owners more flexibility to adapt to changes in their products. Business owners can use multiple DBA names to target different markets or products, expanding their reach and customer base.
- Separation of personal and business finances: A business bank account can be opened after filing for a DBA, which allows you to use your company name on bank transactions instead of your personal account.
- Increased marketing opportunities: A well-chosen name can be more descriptive and memorable than a legal name.
- Cost-effective alternative: Compared to other business structures, such as Limited Liability Companies (LLCs), registering a DBA is typically less expensive and less complex, making it a cost-effective alternative for small businesses and entrepreneurs.
There are a few disadvantages to registering a DBA, mainly:
- Limited liability protection: Unlike other business structures, such as LLCs, DBAs do not provide personal liability or legal protection, meaning that the business owner is personally responsible for all debts, obligations, and lawsuits related to the business.
- Increased legal and administrative burden: Using a DBA name requires registering the name with the relevant government agency and following all legal requirements, which can be time-consuming.
Who needs a DBA?
A DBA is typically needed by individuals or companies who want to operate a business under a name other than their legal name. This can include:
- Sole proprietorships: Individuals who own and operate their business without creating a separate legal entity.
- General partnerships: Joint ventures between two or more individuals who want to operate under a different name than the partners’ names.
- Corporations and LLCs: Business entities that want to use a name different from their name or diversify their business under multiple names.
For example, if you have an LLC for your hair salon business under the name “Alabama Hair Salon” but want to expand into manicuring, you can file a DBA for “Alabama Nails and Beauty.” This creates a distinction between the two separate business activities.
Why or why wouldn’t you need a DBA?
You would need a DBA if:
- You intend to operate your business under a name that isn’t yours or your company’s.
- You want a 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 name.
- You are a single-owner LLC that does not conduct business under a different name than your personal or LLC name.
What does DBA mean?
DBA stands for “Doing Business As.” It is used to describe a business name that is different from the legal name. A DBA lets a business operate under a different name while still being legally responsible for the business under its original name.
What is the difference between DBA and LLC?
A DBA is a business name, while LLC is a business structure. A business can have a DBA name but can also be structured as an LLC or another business structure, such as a sole proprietorship, partnership, or corporation.
Is a DBA the same as a sole proprietorship?
A DBA isn’t the same as a sole proprietorship, but a sole proprietorship can use a DBA name to conduct business under a different name.
So what is the difference between a sole proprietorship and a DBA?
A sole proprietorship is a structure in which the owner is the business and is personally responsible for all debts and obligations. A DBA is a name different from the owner’s and does not change the business’s legal structure.
How long does it take to process a DBA application in Alabama?
The Alabama Secretary of State typically processes DBA applications within 3-5 business days.
Can I trademark my DBA in Alabama?
Yes, you can apply for a trademark for your DBA in Alabama through the United States Patent and Trademark Office (USPTO). A trademark gives you exclusive rights to your name with your products or services nationwide.
Can I operate multiple businesses under the same DBA in Alabama?
You cannot operate multiple businesses under the same DBA in Alabama. Each business must have its own separate DBA registration.
Do I need to advertise my new name in a local newspaper?
Alabama does not require new businesses to advertise their names, but there are many benefits to letting a local community know of your business.
Does a DBA give me an Alabama business license?
No, a DBA does not provide a business license. It is simply a way to operate a business using a different name than a legal name.
Find out how to register a DBA in your state
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