DBA
The acronym "DBA" means "doing business as." In Texas, a DBA is called an assumed name. It gives a business an official name to use in addition to its true or legal business name.
A DBA can let a company accept payments, open bank accounts, and transact business under an assumed name. It does not create a separate legal entity.
A DBA also does not provide asset protection. If a sole proprietorship or general partnership operates under a DBA, the owners still do not receive the personal liability protection that can come from a separate entity.
Because a DBA is not a separate entity from the business, it does not change how the business pays taxes. The business still files taxes the same way it would without the assumed name.
Why File a DBA in Texas?
One reason to file a DBA in Texas is that a business may need to operate under a name other than its legal name.
Without a DBA, a company may not be able to accept payments, open bank accounts, enter contracts, or pursue litigation in Texas under a name other than its true or legal business name.
A DBA can also help with practical name changes, rebranding, or business expansion. It gives the business a separate name for a new line of work without changing the legal name of the company.
A Name Change
For a sole proprietor, the business name is usually the owner's surname by default. For a general partnership, the default business name often consists of the surnames of the owners. That can become cumbersome for a business with multiple partners.
If a sole proprietorship or general partnership wants to operate under a business name that does not include the owners' names, it may need to file a DBA.
An LLC or corporation can also use a DBA when it wants to operate under an abbreviation, acronym, brand name, or different public-facing name. Filing a DBA can be simpler than changing the entity's legal name.
Business Expansion
A DBA can be useful when a business adds new products or services and wants to present that work under a separate name.
For example, if a burger restaurant called Bob's Burgers starts selling frozen burgers through supermarkets, it might use a separate assumed name such as Bob's Frozen Burgers for that product line.
A company can use multiple DBAs, but each additional name can add maintenance and marketing work.
A DBA is still not a separate entity. More DBAs do not mean more liability protection.
If liability arises from sales under the assumed name, the underlying business is still the responsible business. When the goal is to separate liability between business lines, forming a separate LLC may be the better structure.
How to File an Assumed Name in Texas
To file an assumed name in Texas, start with the name itself.
First, choose a business name that the state will accept.
Next, perform a name search with the Texas Secretary of State and the Texas Comptroller of Public Accounts to see whether the name is available for use in Texas. A web search can also help confirm whether the matching domain name is available.
Once the assumed name is chosen and checked, the filing location depends on the legal structure of the business. Some businesses file with the county clerk. LLCs, corporations, and other formal filing entities file an assumed name certificate with the Texas Secretary of State.
Registering a DBA for Sole Proprietorships or Partnerships in Texas
Informal business structures like sole proprietorships and partnerships register an assumed name with the appropriate county clerk's office.
If the business has physical premises, it should register in the county or counties where those premises are located.
If the business has no physical premises, it should register in a county where it will do business.
Filing an Assumed Name Certificate for a Texas LLC or Corporation
To register an assumed name in Texas, LLCs, corporations, and other formal business entities file Form 503, Assumed Name Certificate, with the Texas Secretary of State.
Form 503 requires information about the assumed name and the business, including:
- The company's entity structure and file number
- Where the company was formed
- The company's principal business address
- The period the company intends to use the assumed name
- Each county where the assumed name will be used
The Texas Secretary of State filing fee for Form 503 is $25.
Keep the original assumed name certificate with the company's records after filing. The DBA is a public name filing. It is not a separate company, and it does not replace formation records, internal company records, or liability planning.