A fictitious business name in California is a name a business uses for its identity when the name is not the same as the business owners. The majority of registered businesses in California operate using a fictitious name, which is also referred to as “Doing Business As” or DBA.
Why Do Businesses Require a Fictitious Name?
Businesses require a fictitious name when they want to operate their business using a name that is different from the business owners’ names. It does not matter what type of business entity you establish for your business, such as a sole proprietorship, partnership, or LLC (Limited Liability Corporation); you will need to file for a DBA when conducting business using a different name.
To illustrate, Sally Smith is the sole proprietor of Sally Smith’s Tasty Treats. Since Sally uses her full name in the name of her business, she would not require a fictitious name for her business.
On the other hand, let’s say Sally wants to call her business Sally’s Tasty Treats. Then she would need to file a fictitious business name statement with her county clerk’s office.
Since Sally is not using her full name in the business name, it is considered a fictitious name. To legally operate the business in California, she would need to register a fictitious name.
What Are the Benefits of a Business Entity Having a DBA?
There are several benefits of a business entity using a DBA. For starters, you do not have to use the legal name of the owners in your business name. As such, you can have some flexibility and freedom with what you call your business to help make it easy for potential customers to identify what products or services you will be selling.
Second, you do not have to file for a new business license each time you want to open a business under your parent entity. Rather, you just submit an application and pay the filing fees to obtain a new DBA.
DBAs are also a great way to target specific audiences and groups. You could sell similar products or services but have different DBAs that are geared toward those audiences. You could also sell different, unrelated products and use different DBAs to make a distinction between the two businesses.
Some businesses also use DBAs to expand into new markets and industries that have nothing to do with their current operations. This allows them to establish a new business using a DBA without risks to their current market segment or industry.
For example, let’s say you want to start a new restaurant business that serves burgers, with the plans of expanding into multiple locations across the state. However, you are not entirely sure if you want to use the same business name for each location.
You would create a parent business with a generic business name, such as Neighborhood Burgers, LLC. Then you could file for a DBA for each location you open. Let’s assume you wanted different types of burger restaurants.
You decide to open one location that just serves sliders, so you call it Burger Bites. Then you could have another location that has a dinosaur theme geared toward families, so you call it Dino Burgers.
You may want to try expanding into tacos or chicken, so you would create another DBA, such as Taco Taco Taco or Henrieta’s Southern Chicken. Since you are using a DBA, your burger locations are not going to be associated with the new venture.
As you can see, you have flexibility when using DBAs to name your individual locations whatever you want.
Who Needs a DBA in California?
If you plan on operating your business and do not want public records reflecting your actual name or the name of the business owners, then you will need to file a fictitious business name application.
When to File a Fictitious Business Name Application
You will want to file your DBA application as soon as possible. You will need to obtain other business licenses, such as your state and federal tax ID numbers, and register your parent entity before filing the application. You cannot open your business in California until you have your DBA approved by the state.
You will also need to refile the fictitious name application anytime you make changes to your business entity structure. For example, there are additional owners that have invested in your business, or you decided to change your current business structure to a corporation, limited liability company, or limited partnership, etc.
Part of your application process may require publishing your intended DBA in local newspapers. This requirement can vary by county. It is your responsibility to check with the county clerk’s office to find out the requirements.
Furthermore, you will need to refile your fictitious business name statement every five years in California, even if there are no changes. If you do not, then the fictitious name is no longer valid and could be used by another business.
For further information about how to file a fictitious business name and on submitting your California DBA application, please feel free to get started at FastFilings today! Please feel free to use our online support to contact us with any questions or for further assistance.