- Learn about DBAs, or doing business as, and how they are used when a company operates under a name different from its legal one.
- Learn how employing a DBA may be advantageous for branding and marketing even though it doesn't result in forming a new legal firm.
- Discover the restrictions on DBA names in Arkansas and why ensuring the chosen name is both pronounceable and legal is important.
- Consider how it's essential to think about the legal and tax repercussions before applying for a DBA and, if necessary, consult an attorney or accountant.
What is a DBA?
It's essential to comprehend the many lingo and ideas that might be used in business operations. For instance, it's crucial to understand the term DBA, which stands for "Doing Business As." This exact phrase is used when a company chooses to use a name that differs from the one it initially registered with the state of Arkansas. Interestingly, while this technique is referred to as DBA in most states, other regions use alternative titles. The term "fictitious business name," which relates to the same essential idea, is one of these idioms. The word "fictitious" emphasizes that the name is merely a pseudonym the company uses for administrative needs and is not its proper legal name.
Why do you need a DBA?
Doing Business As, or DBA, can be necessary for several factors. It is beneficial in several ways.
Marketing and branding
Every successful Business relies on having a strong brand identity and efficient marketing. A firm must have a distinctive character that appeals to its target market to distinguish itself from rivals. One method to do this is using a DBA, or Doing Business As, a legal instrument that permits a business to conduct business under a name different from its legal name.
For example, a new coffee business may register under "Brewtique Coffee" rather than its official name, "Johnson and Sons Coffee." The coffee business may build a solid brand identity that differentiates it from rivals by choosing a distinctive and memorable name. Young professionals or coffee lovers may be among the target markets that the term "Brewtique Coffee" appeals to, and it may leave a lasting impact on potential buyers.
Using a DBA or Doing Business As may involve legal responsibilities in some circumstances. Since a sole proprietorship shares the exact legal name of its owner and is not regarded as a separate legal entity, this is the case. Operating under a name other than their legal identification is a frequent practice for businesses and LLCs. They must apply for a DBA or "doing business as" name to do this. This clarifies to the public that businesses and LLCs are distinct legal entities from their owners and that their legal names may not necessarily correspond to the names under which they do Business.
Growth into new markets
Doing corporation As, or DBA, is a crucial tool for a corporation looking to expand into new areas and widen its customer base, which is a typical goal for many companies. Let's say a business wishes to move to a new location to grow its operations. In that situation, it could change its name to something more appropriate for the local customer. Here is when a DBA can be helpful. Let's take, as an illustration, the case of a company called "Midwest Manufacturing," a well-known name in the Midwest area of the United States. A new moniker that connects better with clients in the Southwest may be appropriate if the company wishes to grow there.
How to set up a DBA in Arkansas
Doing Business As, or DBA, registration is straightforward in Arkansas. The steps you must take are as follows:
Select a name
Selecting a name for your DBA in Arkansas that is distinct and doesn't sound too much like other local businesses is critical. A name that correctly represents your company and is simple for clients to remember should also be chosen. You can continue the following process once you've decided on a name.
Register Your Name
The next step after choosing a name is registering your DBA with the Secretary of State of Arkansas. You can accomplish this by completing and sending in a "Certificate of Assumed Business Name" form. The county in which you live impacts the filing fee for this form.
Publish a Notice
A notice must be publicly posted in the county where your firm is based for four consecutive weeks to establish compliance with Arkansas state law. This notice should contain detailed information about your firm, including your company's name and address. It shall act as a public statement of the operational name of your company, which may not be the same as your company's legal name.
Even though it can seem like a tiny, tiresome activity, breaking this law might have serious legal repercussions; the local newspaper will generally provide you with an affidavit of publication, which you may submit to the Secretary of State as proof that you have met this requirement.
Obtain Any Necessary Licenses or Permits
If you want to run your Business in Arkansas after you've fulfilled the DBA registration and publication criteria, you might need to apply for other licenses or permissions. Depending on the kind of Business you are running and where it is located, you may need specific permits and permissions.
Arkansas DBA name restrictions
Be mindful of the limitations and regulations established by the state of Arkansas when deciding on a name for your DBA. You must pick a name close to or identical to an already-used business name in Arkansas. Customers will be kept from confusion, and other firms' identities will be safeguarded.
Additionally, the name you select must not in any way be false or fraudulent. It should appropriately depict the nature of your company and the goods or services you offer. Additionally, unless you have a license to provide those particular services, you cannot use specific terms in your company name, such as "bank," "insurance," or "trust." Finally, all applicable trademark rules and regulations must be followed by your DBA name. A name already registered as a trademark by another company or organization cannot be used. Before choosing a name for your DBA in Arkansas, it's crucial to scour already-used company names and trademarks.
Forms needed to file a DBA in Arkansas
A "Certificate of Assumed Business Name" form should be filled out and submitted to the Arkansas Secretary of State to register a DBA in Arkansas. A filing cost is associated with this form, which varies according to the county where your business is situated, and it may be submitted online or by mail.
You must fill out the Certificate of Assumed Business Name form with basic information about your company, including the name of your company, the kind of entity it is (such as a sole proprietorship, partnership, or LLC), its address, and the names and addresses of its owners. The name you have chosen for your DBA and the county your firm is situated must be disclosed.
A notice of your DBA must be published in a newspaper where your business is situated once you have completed the Certificate of Assumed Business Name form and paid the filing fee. Detailed information about your company, such as the name and address, should be included in the notice, which must run for four consecutive weeks.
After publishing the notice, you must submit an affidavit of publication to the Secretary of State of Arkansas. This affidavit attests to the fact that you've completed the publication obligation.
Depending on your Business's nature, you might also need to apply for extra licenses or permissions from the state of Arkansas or your local government. Researching the particular specifications for your sector is crucial.
Arkansas DBA filing & registration
You must adhere to a few procedures to file and register a DBA in Arkansas:
- A crucial choice that needs serious consideration is the name of your company. Make sure the name is distinctive and distinguishes your company from others in the state.
- A "Certificate of Assumed Business Name" form must be submitted to the Secretary of State of Arkansas after you've identified an available name. Depending on your preference, you may finish this process online or by mail.
- When registering your DBA, remember that there are filing costs to pay. Be careful to abide by local laws and pay the correct filing fee because the amount you pay will vary based on your county.
- You must wait for the Secretary of State's office to approve your registration after submitting your documents and paying the costs. Be patient, and keep going if it takes more than two weeks to receive the authorization.
- Once you gain permission to move forward, there is one more step to do before you may lawfully conduct Business using your DBA name. You are required by state law to issue a notice of your new DBA name in a county-based publication.
Arkansas DBA tax considerations
It's crucial to consider any potential tax repercussions that may result from your firm while registering a "doing business as" (DBA) in Arkansas. The revenues and losses of the Business are recorded on the owner's tax return since a DBA lacks a unique legal personality. As a result, all applicable state and federal taxes on their company revenue are the business owner's responsibility.
Further, the Arkansas Department of Finance and Administration may require that you get a sales tax permit based on the type and size of your company's operations. You can use this permission to gather and send sales tax on any items or services you sell inside the state. Additionally, if your company employs people, you must register with the Arkansas Department of Workforce Services and get an Employer Identification Number (EIN) from the Internal Revenue Service.
Contacting a qualified tax expert or accountant is essential to ensure your DBA complies with all applicable tax rules and regulations. By doing this, you can be sure that you are meeting your commitments and averting any possible legal or financial issues that can result from a lack of knowledge or planning.
How much does a DBA filing cost in Arkansas?
The county where your firm is situated might affect the DBA filing costs in Arkansas. Usually, these fees—paid to the county clerk's office—run between $25 and $50. It's essential to confirm with your county beforehand if there might be any hidden expenses.
It's crucial to remember that creating a DBA does not provide you immediate exclusivity on your selected company name. The Arkansas Secretary of State may require you to submit a trademark or service mark application if you wish to stop other businesses from using your company name. Although it costs more, this procedure can legally preserve your Business's name.
Overall, creating a DBA in Arkansas is a simple and affordable procedure that gives your company a legal identity and enables it to operate under the name of your choice. Giving your company a distinct identity and allowing it to operate confidently is as simple as filling out the required papers and paying the required costs.
In conclusion, obtaining a DBA in Arkansas may be a valuable tactic for companies that wish to perform business under a name other than their legal name. Businesses must choose a suitable and distinctive name, complete the necessary paperwork, and issue a notice in a local newspaper before they may register for a DBA. While filing for a DBA in Arkansas is reasonably inexpensive, it's vital to be aware that additional costs could be assessed depending on the criteria of a particular county. Furthermore, it's critical to realize that a DBA does not grant the name exclusive rights; therefore, getting a trademark or service mark may be required for legal protection. Businesses can create a legal framework by taking the necessary actions and submitting the required documents.
We can help!
At Levy, we help early-stage founders streamline and automate regulatory and legal ops, HR, and finance so you can focus on what matters most — your business.
Like our content?
Subscribe to our blog to stay updated on new posts. Our blog covers advice, inspiration, and practical guides for early-stage founders navigating their start-up journeys.
Note: Our content is for general information purposes only. Levy does not provide legal, accounting, or certified expert advice. Consult a lawyer, CPA, or other professional for such services.