How to Register a DBA in Colorado (Step-by-Step Guide)
If you’re launching a new business in Colorado, it’s crucial to fully grasp the legal obligations and terminology involved. One essential consideration is obtaining a DBA (Doing Business As) if you plan to operate using a name that differs from your legal business name. This article aims to provide a broad overview of what a DBA means, its importance, and the steps required to acquire one in Colorado, simplifying the process for new business owners.
What is a DBA?
The DBA acronym, meaning “doing business as,” refers to a company or individual conducting business operations under a fictitious name. They are also referred to as “fictitious business names,” “assumed names,” and “trade names.”
It can be viable if a business wants to use a more marketable trade name than its official title.
For instance, if John Smith operates a sole proprietorship that sells handmade candles, he can register a DBA name, such as “The Candle Co. by John,” to promote his products and services instead of using his own name.
The process for registering a DBA varies by state. Generally, the process involves
- Selecting a unique business name
- Verifying its availability
- Filing the appropriate forms with the relevant government agency, such as the Secretary of State or county clerk’s office.
- Paying a filing fee associated with the registration process
Colorado DBA name registration
DBAs are often referred to as trade names in Colorado, but these terms mean the same thing.
Choose your name
When choosing a name in Colorado, avoiding using terms violating Colorado laws is important. This includes:
- The use of obscenities or any reference to illegal activities.
- Avoid using words that may confuse your business with and a government agency, such as the FBI, Treasury, State Department, and so on.
- Trade names do not have to be unique, but there are many benefits to having a unique business name.
Check name availability
- Colorado names need to meet the state requirements.
- To check trade name availability, go to the Colorado name availability search website to do a name check.
Once you have chosen a name for your business, we recommend buying that web domain. Even if you are not ready to launch a website buying the domain will stop others from being able to use it. A website is a fantastic marketing tool for any business.
As names do not need to be unique, you may consider registering them as a trademark with the United States Patent and Trademark Office (USPTO) to protect your name. This will provide you exclusive rights to use the name for your business.
Register your name
In Colorado, you can only file your new trade name online.
- Go to the Colorado Secretary of State site and click “Trade Names” at the top of the Business Forms List page.
- Choose the type of trade name that best fits your business from the five options under “Trade Name Registrations.”
- Select the appropriate “Form Name” based on whether you are a sole proprietor, reporting entity, etc.
- Provide the owner’s true name, address, and email details, the selected trade name, and a business description to complete the form.
- Reserve a trading name for up to 90 days or select the option for immediate filing.
Pay your filing fees
- The cost of registering your trade name is normally $20.
- Colorado has reduced filing fees to $1 until June 30, 2023.
Renew, amend, or withdraw your DBA
- Renewing your DBA depends on the type of business:
- For sole proprietorships and general partnerships in Colorado, trade names expire on the first day of the month after the one-year anniversary of filing. To renew a trading name, one needs to do it online before the expiry date, and the renewal fee is $5. The renewal can be done anytime within three months before the expiration date.
- Trade names for LLCs and corporations in good standing do not expire. If a company falls out of good standing, the trade name will expire after one year. If the company returns to good standing, the trade name expiration date will be canceled.
- Re-registering an expired trade name requires filing a new registration form.
- For any changes or corrections to the trade name registration, one can make them online for a fee of $10.
- To withdraw a Colorado trade name, one can do so online for a fee of $10.
Obtain an EIN
The IRS issues an Employer Identification Number (EIN) to identify a business for tax purposes.
It’s worth noting that a DBA name does not establish a new legal entity.
If the original company already has an EIN, obtaining another one for DBAs is unnecessary.
Not all businesses require EINs. A sole proprietor can use their social security number as their tax ID.
Obtaining an EIN is mandatory if you intend on hiring employees or open a business bank account.
Applying for an EIN online on the IRS website is free and straightforward. The process typically takes less than an hour to complete.
Open a business bank account
Once you have registered your name and received your EIN, you can open a business bank account.
A bank account makes it easier to separate your personal assets and finances related to your business. It also makes it easier to accept check and credit card payments.
Advantages and disadvantages of a DBA
The decision to register a DBA comes with several benefits:
- Versatility: A DBA name can be changed or updated more easily than a legal business name, allowing business owners to adjust to market conditions or changes in their products or services. Additionally, a company can use various DBA names to target different markets or goods, which can help to broaden its customer base.
- Separation of personal and business finances: A separate business bank account is possible by applying for a DBA, allowing you to conduct bank transactions under your startup’s name instead of your account. This allows you to receive and issue checks using your company name.
- Enhanced marketing opportunities: A well-chosen DBA name can be more descriptive and memorable than a legal name. This alternative name can improve brand recognition and increase marketing and advertising opportunities.
- Cost-effective solution: Compared to other business entities, such as Limited Liability Companies (LLCs), registering a DBA is normally less expensive and easier, making it an affordable option for small business owners and entrepreneurs.
While registering a DBA can be advantageous, there are some drawbacks to consider, such as:
- Limited legal protection: DBAs do not provide personal liability protection, meaning that the business owner is personally responsible for all debts, obligations, and lawsuits related to the business. This lack of legal protection can be a significant risk for some businesses, depending on their industry or services.
- Additional legal and administrative obligations: Registering a DBA name requires complying with all legal requirements and registering the name with the relevant government agency, which can be time-consuming and add to the administrative burden.
Who needs a DBA?
The following groups of individuals and companies may benefit from registering a DBA:
- Sole proprietors: These individuals own businesses without creating a separate legal entity. A DBA can help them use a different name for marketing their products or services and provide them with more flexibility to adapt to market changes.
- Partnerships: Joint ventures between two or more individuals who want to operate under a different name than their names. Filing a DBA allows partners to enhance brand recognition.
- Corporations: Business entities that want to use a name different from their legal name or conduct business activities under multiple names. For instance, a corporation with a subsidiary that sells software named “Tech Solutions LLC” but wants to sell hardware can file a DBA for “Tech Hardware” to distinguish the two business activities.
- Limited Liability Companies (LLCs): These flexible business structures allow owners to limit personal liability and protect their assets. LLCs can also register a DBA to conduct business under a different name or brand.
Why or why wouldn’t you need a DBA?
Reasons to consider a DBA:
- Alternative business name: If you want to use a business name other than your personal or legal name for marketing your products or services, you might need a DBA.
- Brand recognition: Using a DBA can help your business establish a recognizable brand in the market and increase your customer base.
- Business expansion: If you want to diversify your business under multiple names, a DBA can help.
- New product testing: You may want to test a new product or service without changing your legal name.
Reasons you may not need a DBA:
- Personal or legal name: A DBA might not be necessary if you operate your business under your personal or legal name.
- Single-owner LLC: If you own an LLC by yourself and don’t need to conduct business under a different name, you might not need a DBA.
Can I file my Colorado DBA in person?
No, DBA registration can only be completed online.
How does renewing my Colorado DBA work?
Sole proprietorships and partnerships expire on the first day of the month following the first registration anniversary and can be renewed online within three months before expiry for $5.
LLCs and corporations’ trade names do not expire if they are in good standing but will expire if not renewed within one year of losing their good standing. A new registration form must be filed to reuse an expired trade name.
Can you give me an example?
John’s registered name is “John’s Pizza.” He filed on December 15, 2021, as a sole proprietorship in Colorado. The trade name will expire on January 1, 2023, and John needs to renew it before that date.
He can renew it online anytime between October 1, 2022, and December 31, 2022, for $5. If he fails to renew it by the expiration date, the trade name will expire, and John will have to file a new registration form if he wants to use it again.
Does my name have to be unique?
There are state-level laws that stop DBAs from being too similar to existing ones, but your name is not protected. If you want protection, consider creating a federal trademark.
How long does processing take?
DBA documents are submitted and filed in real-time online. Once you have received confirmation of your payment, the documents should be immediately processed.
How can I pay?
You can pay for your trade name online.
Do I need to advertise my new name?
Colorado does not ask you to advertise your new name in a local newspaper, but there are many benefits to promoting a new business.
Does my DBA give me a business license?
A DBA does not give you a business license. You may also need to apply for a business license depending on your business setup.
Should my nonprofit file for a trade name?
A nonprofit may, but is not required to, file a trade name.
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