DBA is an acronym for “doing business as” and can occasionally be referred to as a trade, fictitious, or assumed business name. Regardless of what you call it, a DBA allows business owners to operate under a state-registered alias separate from their legal name.
The process for filing for a DBA is relatively uncomplicated, but the rules and requirements can vary from state to state or depend on your company’s structure or “legal entity.” In this article, we’ll break down each step of the process so that you have all the knowledge you need about DBAs and how to get one in Michigan.
Step One: Determine If a DBA Name Is Right for Your Business
If you’re unsure whether a DBA is necessary for your business structure, here are some reasons it may be required or beneficial to fill out the extra paperwork.
Establishing Your Small Business
Typically, individual contractors and startups will file for a DBA to present their business in a more professional light. A DBA is also a more cost-effective and straightforward process of creating a business name for yourself rather than forming a limited liability company (LLC) or corporation.
However, it’s important to note that a DBA is primarily beneficial for branding. It does not offer the asset protection that an LLC does.
Remaining Legally Compliant
Because sole proprietorships and partnerships aren’t incorporated, filing a DBA with your county clerk is a requirement—unless you or your partner wish to operate your business under the full legal name of you or your business partner. Real estate companies and estates must also register in their respective Michigan counties.
Formal structures, such as LLCs and corporations, are protected by specific laws. A registered DBA can assure that the company maintains legal protection when using any name other than the original.
For example, suppose a company called Clifford’s Car Wash decides to start using a variation of the name, such as CCW or even Cliff’s Car Wash. Without having those assumed names registered with the state, contracts would be unenforceable, and they could suffer civil and criminal penalties.
Claiming a Business With Your Name
For some people, such as artists or authors, it’s vital for their line of work that consumers know who the person behind the brand is. A DBA can help them do just that.
Whatever fictitious name you choose, filing it with your county clerk lets you claim that name and deter others in your state from doing the same.
Retaining Anonymity
Contrary to the last point, some business owners would rather hide behind the name of their company. They would prefer to work from behind the scenes instead.
Imagine if the male founder of Victoria’s Secret had named his undergarment stores after himself. You’d probably be right to assume it may not have had quite the same success! A DBA can help give your business a fresh identity and impact your marketing.
Diversifying Your Target Market
Assumed names can also affect how you advertise on the internet or media. Using DBAs that highlight different skills or products of your business can appeal to more of your target consumers.
Say you’re a private chef, a pastry chef, and a caterer. Operating your domain names under separate aliases representing those differences can expand your online presence and market to a range of specific needs.
Meeting Banking Requirements
Most banks don’t permit sole proprietors and general partnerships to use a personal account under the name of their business. Unless you or your partner are using your full legal name for your business, you will be required to show proof of DBA to the bank.
A Certificate of Persons Conducting Business Under Assumed Name will reflect that you registered the assumed name.
Operating a Franchise or More Than One Business
For LLCs and corporations pursuing franchise opportunities in Michigan, notifying the state that their organization will be “doing business as” the franchiser’s trademark name is a requirement.
DBAs can also save incorporated businesses money, time, and energy when branching out their business, such as the domain names we mentioned previously. Instead of forming a new LLC for each company, using fictitious names to brand them separately avoids having to fill out another tax return or getting another EIN.
Changing the Entity Name
Creating a name for your brand is a difficult task and is never guaranteed that you’ll still like it in the future. While changing the name of your LLC is possible, it can be a very time-consuming process that requires many forms.
As an alternative, filing an assumed name can achieve a similar goal and save you from multiple headaches.
Step Two: Decide on a Michigan DBA Name
Once you’ve concluded that a DBA is in your best interest, it’s time to decide on the fictitious name you’ll use to represent the brand! Before registering the new name, the following can ensure that your name is unique and complies with Michigan regulations.
Confirm Your DBA Name Is Not Already Taken
DBA filings are a state-specific procedure. As such, you’ll need to see if any businesses in Michigan already operate under the same name or a similar one to the one you wish to use.
Check out the state’s Department of Licensing and Regulatory Affairs (LARA) to run a quick search. To check if anyone in the country has trademarked your chosen name, visit the U.S Trademark Electronic Search System to find out!
Double-Check That You Don’t Use Restricted Words
Any name that might imply that you are a government agency (Police, Homeland Security, etc.) is strictly prohibited.
There are also restrictions on words that may suggest you’re a licensed professional or that your company is part of a federally regulated industry. You can’t use those terms without the required paperwork and prior approval.
Restricted words include, but are not limited to:
- Bank
- Attorney
- Trust
- Security
- University
- Law
- Doctor
Avoid Names That Might Deceive Consumers
Just like certain words that can be misleading are restricted, choosing a name that people might perceive as deceptive about your business is also not permitted.
To illustrate this idea, envision yourself as a customer of a store named Hand Crafted Goods. After buying a trinket from that store, you find out their merchandise is not hand-crafted but manufactured in a factory. In this case, you could certainly argue that the shop name is an intentional misrepresentation of the products they sell and that they sold the item you bought under false circumstances.
To avoid any legal trouble from using a name that could be misleading, consider suitable words that can accurately represent the essence of your business.
Check the Domain Name
Before filing your new alias, an extra step you can take is checking to see if the domain is available. If you plan on launching a website for your business, this could influence your decision regarding the name you choose.
Step Three: File Your Michigan DBA Name With the State
Now that you’re ready to file your DBA, you’ll need to complete the process of completing and submitting your forms. The paperwork you need to complete will depend on the business entity.
Filing an Assumed Name in Michigan for Sole Proprietors and General Partnerships
A sole proprietorship is the simplest way of operating a business. If your business has no formal structure and is owned and run by only you, you’d be considered the sole proprietor.
If the same business is owned and run by more than one person, it’d be considered a general partnership. Regardless of which one your business falls under, the filing process is the same for both types.
Sole proprietors and partnerships must fill out a Certificate of Persons Conducting Business Under Assumed Name and register it with each county where they plan to conduct business. The form will ask for some basic information such as:
- The name you will be doing business as
- Name and address of the owner(s)
- The state and county in which you started your business
- The nature of the business
- Details regarding the relationship with your partner(s), if applicable
After filling out the complete form, you will need to get it notarized before filing it with the respective county clerk, either in person or by mail.
The filing fee and payment method can vary depending on the Michigan county. Not including the possible notary charge, the DBA filing fee generally costs about $10-$20.
Filing an Assumed Name in Michigan for LLCs, Corporations, and LLPs
Incorporated businesses have a slightly different process for filing a DBA. Instead of filing at a county level, they must register their Certificate of Persons Conducting Business Under Assumed Name at the state level.
The following are examples of incorporated, or formally structured, businesses:
- Limited Liability Company (LLC)
- Limited Liability Partnership
- Limited Partnership
- Nonprofit Corporation
- For-Profit Corporation
- Professional Corporation
- Professional Associations
- Any Foreign Filing Entity
LLCs, LLPs, and corporations will need to fill out the same basic information on their form. Additionally, they must include their company’s present legal name and employer identification number.
Formal structures also have the option to submit their form and payment in various ways:
- By Mail
- Michigan Department of Licensing and Regulatory Affairs
Corporations, Securities & Commercial Licensing Bureau
Corporations Division
P.O. Box 30054
Lansing, MI 48909 - Pay by check or money order
- Michigan Department of Licensing and Regulatory Affairs
- In Person to the Michigan Secretary of State
- 2501 Woodlake Circle
Okemos, MI - Pay with Visa, MasterCard, Discover, check, or money order
- 2501 Woodlake Circle
- File Online
- LARA, Michigan’s Department of Licensing and Regulatory Affairs
- Pay with Visa, MasterCard, or Discover
The filing fee is $10 for LPs and corporations and $25 for LLCs. Getting your DBA approval can take up to 1-4 weeks.
Those that have a sense of urgency can have their form expedited for an additional fee. An additional payment of $50 lets you have the form processed in 24 hours. To get it the same day it’ll cost you $100. A 2-day period is $500; finally, for one hour, the fee comes out to $1,000.
Step Four: Manage Your DBA
After your registration is approved, these are some extra measures you can take to protect and manage your DBA throughout your entrepreneurial journey.
Trademark Your Name
To prevent other businesses from using your assumed name in the country, consider trademarking it with the United States Patent and Trademark Office.
Insurance
Although insurance is not required for DBAs, insurance can help protect your business from the inevitable monetary losses that come with entrepreneurship. In the unfortunate event that another party sues you, a DBA would offer no asset protection whatsoever.
Employer Identification Number (EIN)
Because sole proprietors can use their social security numbers for tax purposes, an EIN is not required, but it may be worth applying for one to keep your business separated.
For incorporated businesses, an EIN is a requirement for the business entity itself, but not for a DBA.
Renew Your DBA
In the state of Michigan, a registered DBA expires after five years. To continue using your assumed name legally, set a reminder to file your renewal ahead of December 31st, five years from the year you first filed.
Review Your DBA
As your business grows, the information on your DBA filing will need to be updated to reflect any changes. Revise your DBA regularly to ensure everything is up to date and that you are still operating within the law.
Need Accounting Help? Give Us a Call
Filing a DBA can have many benefits, from complying with the law to impacting your marketing. If you’re still unsure whether a DBA is right for your business, consult MI Tax CPA for expert advice and guidance. We can help you take the guesswork out of legal documents so that you can focus on what matters most.
For any additional in-depth questions and assistance regarding your business’s tax and accounting needs, contact one of our qualified professionals at MI Tax CPA!
