What is a DBA?

This is Law and Wit, episode 26, What is a DBA? Welcome to Law and Wit, Creative Counsel for Entrepreneurs. I'm your host, Brittany Rettell, mother of 4, entrepreneur, naptime lawyer, and attorney for creative entrepreneurs. I'm here to share inspiration and action so that you can tackle your business blocks and confidently own your business in every sense of the word. Thank you so much for being here. Hello and welcome back. Thank you so much for being here. And I know that's a really cliché way that people start out podcast episodes. As a major podcast junkie myself, I'm well aware of that. But, you know, honestly, it doesn't make it any less true because I'm always grateful for you giving me your time and I appreciate it and I promise that I won't take that lightly. So without too much further ado, let's get into our episode today. I'll give my brief disclaimer because what kind of a lawyer would I be if I didn't have some sort of disclaimer and asterisk around? While I am an attorney, licensed in Utah. I am not your attorney unless you want me to be. So anything we talk about today is just for informational educational purposes only. This is not an attorney-client relationship. And if you have any questions as to anything that we discussed today or in any of my other episodes, or really anything honestly that I'm putting out there, whether my tips on Instagram or if you've gone to any of my Q&As or looked them up, my replays on YouTube, um, or seen any of my handouts and stuff that go along podcast episodes, um, that's all just information that I'm trying to put out there free stuff, resources to help you guys with your businesses. But if you have further questions about how that might apply to your specific set of facts, please consult with a licensed attorney in your jurisdiction. Okay, that's going to be the best way that you can get help. And if you want to work with me, um, the best way to move forward with that is to set a— set up a free phone consultation with me. And I have my calendar over at brittanyratel.com. If you go brittanyratel.com/services, you can sign up for a free 20-minute chat with me, and we can talk about your business, about what maybe you need or where you want to go and how maybe some legal tools and foundations can get you there. Okay, so let's get into it. Okay, we're talking about DBAs today, and I know I've made this joke a couple times that it's like, hey DBAs, hold the, you know, hold the avocado and mayo, more bacon. Um, and, and it's probably not as funny as it is to you as it is to me, um, but every time I hear DBA, I think of like a TBA, a turkey bacon avocado, or like a BLT. It just kind of is one of those things that's a funny— falls into those alphabet soup. And I especially think it's funny because I've grown as I've done this work with several clients, you know, dozens and dozens of clients across all different businesses in the creative world, that a lot of people use the term DBA and I don't really think they understand what it is. Or maybe they've been misinformed, or, you know, some other myths have been able to pervade their consciousness in terms of What is a DBA? What do you mean by that? Do I need it in my business? Do I not need it? When? You know, I think there's, there's a lot of myths flying around, so we're going to try to nail some of those out and flesh some of that out today. Okay, so what is a DBA? So a DBA is an acronym that stands for Doing Business As. Okay, and how I usually like to explain it when I am talking to clients is that it's kind of like a bridge. So So, um, DBAs are, um, they are supposed to be set up and supposed to be filed by companies anytime someone is doing business as something other than their own name. Does that make sense? So I'm Brittany Rettell. If I am going to set up a new, um, baking store and I'm not going to use my name because I think my name is just far too boring and I need something, um, that has some pizzazz in it, so maybe that's exactly what I'm going to do. I'm going to say, you know, Sprinkles and Pizzazz. That's going to be my bake store. Fabulous. Okay. Well, if I do business as Sprinkles and Pizzazz, it might be hard for someone to actually find out who's behind this business. And certainly if someone has a problem with Sprinkles and Pizzazz, if they get sick from my cupcakes, or if they slip and fall in my restaurant, or if I'm supposed to deliver 500 cupcakes for an event and I don't show up, and they want to know who can they call and who can they maybe sue to make this right. They're going to want to know who's the actual person attached to this business. Um, and so DBAs are supposed to do exactly that. They're supposed to be kind of a bridge so that people know who they're doing business as. And specifically, your state wants to know, um, who someone is doing business as because they want to know who's operating within our state or our county. They're usually organized and registered on the county or state level depending on where you live. Most common is state, but sometimes they're in county. Because the state has an interest, the government has an interest in protecting people and making sure that there's a good record, that we have good record keeping about who's doing business and what names are they doing business under, especially if they're making up fictitious names, which is totally fine. That's part of your branding. We just want to know what's going on. So, um, so that is what a DBA is, um, which— so the next point is, um, the next kind of grouping is, okay, well, what is a DBA not? Not to get all double negative on you, but what I frequently hear is people are under the false assumption that a DBA is a legal entity, um, and it's not. Okay, so here are the 3 things that a DBA isn't, and then we're going to talk about them in turn. The first is that it is not a legal entity and it does not offer any legal protection for your business. The second is that a DBA is not a trademark and it is not any kind of naming rights that you get. The third is that it is not an entity or a business designation that extends beyond wherever it's registered. So state or county, okay, depending on where you register your DBA. Okay, so those are the three things that it is definitely not. So let's talk about the first one. It's not a legal entity. If you remember in my episode about LLCs, we talk all about LLCs, which are limited liability companies. Again, another great acronym. So, so wonderful. We just really like our acronyms. Um, and those are legal entities. So when we talk about forming a business or registering your business or incorporating a business, those are all used interchangeably. We are talking about usually forming an LLC, okay, and registering an LLC, a limited liability company, in your state. And normally when you are going through that procedure, if when you set up your LLC, if you do it in some boring legal name— so if I set it up as Rattelle Holdings, for example, and that's my LLC name. And now I want to be doing business, um, like for example, I want to go back to, like, I want to set up a contract shop. Like, I actually have, I have a contract shop that's called Creative Contracts. Um, well, that's different than what my LLC name is. And so when I set that up, it asked me, do you have— is your business, um, under any assumed names? Is it doing business as something else? And I said yes, in fact it is. Thank you for asking. Um, and I told them exactly what it's doing business as. So now I'm putting that little legal— I'm putting that bridge in place so that my LLC has a DBA for this shop that's operating underneath one of my LLCs that I have. I have a couple in my business, um, because, you know, lawyers, we have to keep things, um, complicated. Um, so can an LLC own multiple DBAs? Yes, definitely. And, and that happens a lot if you see large holding companies, especially if they have multiple brands under those names, um, that they're working at. Or say you're in one line of business, you know, you do renovations, and then now you're also doing carpet cleaning and you want to have a different name for that service, then you could just file a DBA. You can do that when you're setting up an LLC, but you can also do it anytime after. Again, that's going to just— it's going to be on either a state or a county level, but you just usually just go on an online website. You have to fill out some information about it, who's in charge, where are they available at, Does it have hours? Making sure it's not doing any kind of restricted business that would require additional paperwork and regulation and oversight. You know, you're not doing anything crazy. And then they'll give you your DBA, no problem. And it's usually a very nominal fee. It's like usually like $20, $20 to $30 or something. Super easy. Okay, so the thing is that if you've not done that, if all you have is a DBA, you are still a sole proprietor. You are a sole prop, as we call it. You know, your sole prop airplane out there on your own. Which, that's, that's fine. You know, some of us, we just get it, you know, we hit the ground running and we start in business. And maybe you're one of those types that like, you just want to go, okay? You just want to go. You want to fly your little business airplane, sole prop airplane, um, and you're not really too worried about other things slowing you down, like legalities and liability and, you know, all this legal mumbo jumbo that, um, that, you know, I talk about all day. No, no offense, Brittany, but your stuff's kind of boring. No, I get it. I totally get it. The only problem is, is that you have not separated your legal assets, your business assets, from your personal assets. So like I kind of dive into in depth on the LLC episode, if you haven't listened to that, um, might want to pause and go back or put that on your list to listen to after this one. Um, the problem is, is that all your stuff is mixed together. So if someone has a problem with your business, um, they have a problem with you and they can come after you. So like we talked about in our little hypothetical, if someone slips and falls at your place, if they hurt themselves at your event, if they get sick from your products or hurt from your products, if you don't deliver on a contract that goes wrong, if someone sues you because they say that you use a photo or a video that you weren't supposed to, if you took a picture of someone and use it in your advertising and you didn't have clearance to do that, or if you got a used a logo and tried to and put it all up everywhere and you didn't have the rights to that logo because that, and that content wasn't yours, um, those are all things you could be sued for. And if you don't have an LLC set up, if someone wins that lawsuit, then they can come after any assets that you have— your house, your car, your 401k, whatever you might have in your savings account, whatever you might have that's community property that's, um, that's with your spouse. So could be up for grabs. So, um, it's— that's kind of scary for a lot of people that, you know, they're they don't want to have that happen, you know. And if you can do something and put a little fence up, a little bubble to prevent that, like an LLC, um, for $100— or I know it's a lot more if you're in California, sorry, hashtag sorry California, um, but in most places it's usually around $100, um, to set up— then that sounds like a pretty great cost-benefit analysis, you know, pro-con analysis. So, so that's why an LLC is so great, and that's why Not incorporating just doesn't give you any of those protections. So, and that's what a DBA is. It's cute, but it's not legit yet. Okay, so just to let you know, that's what you have if you have a DBA, and there might be time to just invest some money and to set up your LLC. That is something that, um, you know, people approach me and they ask me, can I do it for them? And I do. I do it for clients in Utah. And, uh, but it's also something that you can do on your own. Honestly, it's not that hard. You can go on the website and just fill out the steps and you can be done. It'll take you probably an hour or two, and you'll get your EIN number. You'll put information, you'll have to make decisions about your registered agent. Um, be— keep in mind that you'll have to kind of list some addresses for your business, phone numbers and addresses that will go on the public record. So if you are interested in operating virtually and you don't have any of those physical addresses, which a lot of us don't because we're operating online— that's that. I put myself squarely in that camp too. Um, just keep in mind that you might want to look into either having a virtual mailbox set up somewhere to kind of plug that in, or to register and buy like a registered agent service and pay for that every year. And then you also can keep that stuff shielded because you're going to get hop-ons. Um, so sorry, uh, for those of you who might not be Arrested Development fans, but yeah, you're going to get junk calls, you're going to get hop-ons. As soon as you put your information out there, because there are evil scraping bots on the internet who do that kind of thing. Okay. All right, number 2, um, what a DBA is not: it is not a trademark or naming rights. Um, and I have a couple episodes that I talk more in depth about trademarks. I have my copyright versus trademark episode, and then I also have the 6 benefits of getting a trademark. Um, so listen to those if you want more information about what a trademark is. But, um, I can just tell you very concisely that a DBA is not a trademark. Trademarks are much more expensive. They are filed on the federal level in the United States, and they give you federal protection to a particular name or logo or slogan in a particular class of goods or services. A DBA is not any of those things. So while you may register a DBA and a name that you like, and maybe that means something to you, and then you start building a reputation and a brand around that you don't have the rights to use that name necessarily. And in fact, you could still be committing infringement and you could be hurting someone else's rights unknowingly to you until you get some lovely cease and desist letter someday that says, stop what you're doing. And by the way, we want your sales records for the last 3 years to know what kind of damages that we could maybe collect from you. So I don't like to be the bearer of bad news, guys, but I just, I want you to have as much information as you can so that you can make smart decisions and more confident business decisions. So, so you don't get any naming rights with a DBA. So if your name is something that's important to you, if you want to build a brand around that name, or if you're worried that someone else is going to sneak it out from under you, or if you're concerned that there's someone else that's similar and you're wondering how close can you go, you know, how low can you go limbo style, um, then that might be worth a conversation with me or someone else who does intellectual property law, um, does trademark law, so we can talk about what your options are, um, and, and do maybe do a, at least a search clearance. And then if that looks good, we can move forward with a trademark. Okay. So, um, go set up an appointment. Let's talk about that. Let's get you locked down. Okay. All right. Um, and the third one that a DBA is not— it is not a, um, any kind of organization that extends beyond your state or county. Like I said, these are organized at that local level. And so, um, if I get a DBA in Utah, it's just the state of Utah saying that this is registered, that that business name, um, is, is available. Um, and by available, I will say available with huge air quotes, because the Utah Division of Corporations has not done a search, even like just a plain Google search, which is what you should do at a bare minimum anytime that you're naming a business thing. Okay, the very first step should be a thorough Google search, like you're going pages and pages down. Okay, do not stop at the first page, please. Okay, I mean, go way down the rabbit hole, because that's how much you could be at risk in terms of what's out there with that name What are things that sound similar? Are there domains available or close to it? Are there social handles? That should all be part of that, that look into what's available in terms of the registration at that level. So, but none of that is guaranteed when you get a DBA. So just know that that's not something that's been done, or, and that is not what considerations have been done when you get that even successfully registered. Okay, again, it's just that bridge. It's just a bridge between you Joe Schmo and what business you might be operating under that has kind of a fancier name. Okay, and I mean, for a while everyone had these fancy names for blogs, you know. I remember the days because I, I had a blog. We— I was The Boy and Me. Isn't that so cute? My husband always rolled his eyes because he's like, the boy, really? Which is kind of funny because my husband is a giant of human— of a human being. If you haven't ever met him, he's 6.5 feet tall, he weighs 315. Of solid muscle, and he's been known to— yeah, when we go to the store, people move out of his way. I didn't know that human beings had wakes until I met my husband and married my husband. So anyway, for him— for me to have called him a boy, um, it is pretty funny. It is pretty comical. So anyway, I had The Boy and Me. There's lots of other people that had all these fun names, you know, of, of, um, blogs. And you've now seen the trend turning that a lot of people are trying to rebrand or re-establish themselves in whatever area it is that their, their brand is, whatever they're doing online, whether it's selling themselves or their services or their products or their education, their expertise, in their own personal name. Which is nice because your name is more you and it's established to you as a person. And that way, if you're establishing a personal brand, then it makes sense that your name would be part of it. That's not to say that you can't have other elements or other, you know, little flourishes on that. Um, but I don't know, personally I like people use their real name, or at least their name is part of their business, um, just because, uh, especially if it's a personal, very personal brand, um, because that just makes sense. So, but I know some of you are in different camps out there and you love your more whimsical names. Um, and whimsical names are certainly, if they're creative enough, they're easier to protect, um, which is cool because if they're— especially if they're made up or arbitrary names, um, if you come came up with a cool word, then that's, that's a lot easier for us to protect and to lock down with the trademark. So, you know, that's, that's going to go down the rabbit hole there. But, um, anyway, those are just some high-level thoughts to think about when you're naming your business. Um, which is to say that naming your business is kind of a big deal. Or if you've already named your business and you are feeling uneasy about it and not sure where you stand or what you have the rights to, or, um, then, you know, let's, let's talk about this stuff because um, you know, I, I see people, you know, balk sometimes when I talk about trademark, and it is investment, you know. I won't lie to you, it's usually around $1,000 to get your basic trademark in one thing, and if you want to do it, it's in other items. Um, that's what the trademark prices start. And some people are like, oh, that's a lot of money. And I understand that is a lot of money. Um, but I also have seen people spend 10 times that much, 15 times that much on websites under a name, um, that they still have not secured yet, that they haven't— they've built this brand around something, and yet they don't know— a social media following with hundreds of thousands of people, and yet they don't have that trademark. So someone else can use that name, can promote products or services or goods, um, you know, piggyback off of their brand success without paying them a dime. And there's nothing they could do to stop them because they haven't trademarked and locked down that name. So Anyway, that's a tangent, but, but a true and worthwhile tangent, so we'll own that. Okay, um, so yeah, like, like I said, doing— to wrap up, doing, uh, business ads or DBAs are a bridge between your name and what you're doing business as. And it's the whole point behind them is so that people can find you. Okay, this is a stalker's paradise, you know. I think of in, um, the Legend of like the, the Whores of Sweeney Todd, it's like, I see you Joanna. That's— he is trying to find Joanna. Okay, that's all he wants to do is find it. And maybe people who are doing business with you or have a problem with you, probably more likely, are trying to find you. And that's what a DBA is. Okay, so if you can't remember anything else, think of the bridge stalker. Okay, got it. So, um, just good to wrap that up. So as a reminder, a DBA is doing business as. It is not a legal entity with any legal protection. That's thinking of an LLC or corporation. It is not a trademark or naming rights to your business by any stretch of the imagination. And there are not any rights to your business organization that exist or protect you beyond your state or county. Okay, it's not a federal-level designation. It's certainly not an international. It's, it's, you know, much more localized. So, okay, so hopefully that helps kind of sort out some DBA myths and help you along your way. I want to thank you for listening and joining me on the podcast today. If you've been listening for a while, which I can see some of you are, which is great— I love checking in my stats, it's, it's really cool to see the up, you know, the downloads just keep going up and up. And if you have not left a review yet, can you please, please do that as soon as I stop talking? Which I eventually will do, I promise. Eventually I will stop talking. If you could leave a review, even if it's just a quick star rating, you know, if you can type something out, that's great too. But I'd really appreciate it. Um, you know, this is a free resource and I really want it to always be a free resource. I don't plan on having it sponsored, um, but I'd like it to be in the hands of more people who I know need to hear this information. So if you've enjoyed this episode or any of my other episodes, if they've been helpful to you as you've been working on your business and trying to sort some of this stuff out, um, if you passed along to any friends, which I love— sharing is caring, always— then please leave a review or share, and that would be, that'd be really great, and that helped me to accomplish my mission as to why I'm doing what I'm doing, which is to help make women, uh, you know, all business owners, but especially my female entrepreneurs out there, and more confident business owners. Okay, that's what gets me really jazzed, and that's why I keep showing up here, um, even if it's not as consistently as I would like, to bring you the resources and tools that you need. So I hope as we're going into the holiday season that you have a happy, happy holiday with your family and with your loved ones. I hope as you're getting ready for, um, you know, shopping sales and promotions these next few weeks that you are using some of the tips and tricks that I've mentioned, you know, on Instagram and here to set your business up for success. I am going to be doing another little mini-sode about promotions and giveaways because that's a question that I happen— that I get a lot of questions on this time of year because I know people are setting up a bunch of stuff and wanting to how can they make sure that they're, um, making that compliant and all legit. So, um, that'll be another upcoming episode, so look for that. And I also have some other killer interviews, um, ones that I've recorded and in the works, um, that you definitely don't want to miss. So make sure you're tuning in, subscribing if you haven't, leave a review. As a reminder, I always have the show notes on my website at brittanyratel.com/whatever the episode number is. So for this one, it's going to be brittanyratel.com/26. And I put a full transcript of the show up there. I also include any links I mentioned, um, and I do show notes and including handouts, okay, for the episode. So if you're out and about and you didn't have a chance to take notes and you want to remember what we talked about today for this episode or any of my other episodes, just please check out on my website to get you the resources you need to confidently move forward. So thank you so much for being here.