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We touched on this in previous posts, but it’s time for a refreshment course in DBAs, or Fictitious Business Names. We are starting today our two part series on Fictitious Business Names.
Having a Fictitious business name is a great way to keep costs low and the process simple. You won’t have the ongoing record keeping requirements and other formalities associated with maintaining a corporation or LLC, or the costs associated with forming a corporation or LLC in the first place. That’s why traditionally DBAs are the first step for startups or small businesses. Once the business is established and running profitably, the small business owner has the ability to incorporate.
The most common reason why people choose to file DBAs in Los Angeles is the ability for a sole proprietorship to open a business bank account and starting operating under that name. However, there is no name protection or exclusivity offered by operating solely under a “doing business as” name. When registering your DBA, you may also find a corporation, LLC, sole proprietorship or other business entity using the same or a similar business name. We’ll discuss this in more detail in our next post.
Occasionally established businesses file DBAs in Los Angeles when they want to branch out and assume additional or alternate names. In such a scenario, a corporation or LLC adds additional names to the original one, but register the new ones under the name of the corporation or LLC. By doing so, the limited liability of the incorporated entity “covers” the new names also.
However there is a main disadvantage of operating a business as a sole proprietorship as opposed to forming an LLC or corporation in that you do not have liability protection that a corporation or LLC will allow you. You will be personally liable for the debts of your business.
There are some naming rules to follow when picking the name of your new DBA. Apart from the obvious of making sure nobody else is using it, there are some terms like “LLC”, “Inc.” or simply “company” that cannot be used because they would suggest to the public that that name is the name of an incorporated entity, which is not.
A key element of filing a fictitious business name in Los Angeles is publishing it in a local newspaper. If the registrant does not do that, then the name expires after only 30 days, and you’ll run the risk of someone else taking that name in the county you were planning to operate.
Any Document People store can assist you with preparing and filing a fictitious business name in Los Angeles and other areas for a low all inclusive fee (typically around $149).
The Document People is a network of legal document assistants, paralegals and notaries. We offer fictitious business names/DBA in Los Angeles County and Orange County at the We the People Woodland Hills, We the People Santa Monica, San Fernando, We the People Glendale and at The Document People Torrance, Anaheim and Oceanside stores.
The information contained in this blog – including information of a legal nature – is provided for informational purposes only, and should not be construed as legal advice on any subject matter.