ASSUMED NAME CERTIFICATE:
Filing your Assumed Name Certificate or DBA is one of the first steps in turning an idea into a business. If you are ready to get started the DBA Generator below will make the process fast & easy, or if you still have some questions we can help with that as well. Just click on the section below that best represents your question, when you are done with your research scroll down to start creating your Assumed Name Certificate. The process will take less than 10 minutes and the instructions will walk you through each step of the process.
The DBA / Assumed name certificate process:
-
Decide what you want to name your business
-
Do a name search if your state requires it or if you are worried that someone else in your city or county is already using the name you want to use
-
Complete the Assumed Name Certificate - We are helping you with that
-
Get the completed Assumed Name Certificate notarized - DO NOT sign it before you are in front of a notary.
-
Take the completed & notarized form to the city or county clerks office to record your assumed name. She or he cannot tell you anything about the contents of your form, they just record the document you provide. They are not being mean, in many states they law prohibits them from answering certain kinds of questions.
-
We recommend you get a copy of the recorded form with the county stamp / barcode etc. to show that you have filed your assumed name. This will be needed to open a bank account or cash a check.
-
The city or county clerks office will send you the official recorded document for your records.
Some things to keep in mind as you choose your business name:
-
Choose a name for your business that is different enough from other businesses in your area so you dont confuse customers.
-
Some states have name search requirements before filing a DBA to prevent the unintentional use of the same business name by multiple companies.
-
Filing a DBA does not stop another company from using the same name you do, but it does record who was using it first.
-
The city or county clerk cannot tell you if someone else is using the same name. They are not being mean or unhelpful, in many states they law prohibits them from answering certain kinds of questions.
-
The city or county clerk can tell you where the resources /system to do a name search is, but they cannot help you do the search. It is your responsibility to do the name search.
-
Each city or county may keep a separate name list, and you may want to register your DBA name with each city or county you are doing business in.
-
If you submit a DBA with incorrect information the clerk will not check your work for accuracy. Please double check your work beforehand.
Who can you talk to about starting a business:
-
Small business development centers (SBDC) are a network of government funded small business consulting centers that are available to discuss business ideas with. You can find the nearest SBDC to you here.
-
Many colleges & universities have entrepreneurship or innovation centers that will help local businesses.
-
You can use the Pebble Plan business planning software in combination with the individual consulting you get at the SBDC or an innovation center. The software was designed so you can work on your own as much as you want to, then when you need help you can talk to an outside collaborator and work together in the app.
-
If you don't live close to a local help resource, you can contact Pebble Plan and if we know of a qualified small business consult in your area we will be glad to make an introduction.
The type of business entity you choose to start has legal & financial implications.
Two of the most commonly asked about topics with legal implications are:
1. Ownership & control of the business:
-
Sole Proprietorship: As a sole proprietor you have 100% control & ownership of the business.
-
Married couple as a Sole Proprietorship:
- If you are in a community property state you jointly have 100% control & ownership of the business - like a joint checking account
- If you are not in a community property state this type of business formation may not be allowed - if it is, check with your state's laws on how ownership is divided
-
General Partnership: Unless you have a contract saying otherwise you each own 50% of the business and share control of the business equally.
2. Personal liability of the owner:
- Sole Proprietorship: As a sole proprietor you are 100% personally liable for the activities of your business. Insurance can help reduce what you may have to pay out if there is a situation, but you own the liability.
-
Married couple as a Sole Proprietorship:
-
If you are in a community property state you jointly have 100% of the liability for business activities
-
If you are not in a community property state this type of business formation may not be allowed - if it is, check with your state's laws on liability
-
-
General Partnership: Unless you have a contract saying otherwise you each jointly share 100% of the liability for business activities. Yes, even though you only each own 50% of the company.
Two of the most commonly asked about topics with financial implications are:
1. Taxes:
-
Sole Proprietorship: The business will not file it's own federal income tax return; it is considered a pass-through entity. When you file your personal federal income tax return you will include the businesses earnings or losses along with your personal income and file one federal tax return. State income taxes laws vary from state to state and it is recommended that you seek professional help with filing your businesses taxes.
Sales taxes (if your business is required to collect sales tax) are filed separately from income taxes and are paid to the state and or local taxing authorities. Consult your state comptrollers office or state tax office for your states rules.
-
Married couple as a Sole Proprietorship: Income tax laws vary from state to state and it is recommended that you seek professional help with filing your businesses taxes. Your choice of how you file (Jointly, separately etc.) can have an impact on the advice your tax professional gives you - make you sure you tell her/him everything they need to know to help you file accurately.
Sales taxes (if your business is required to collect sales tax) are filed separately from income taxes and are paid to the state and or local taxing authorities. Consult your state comptrollers office or state tax office for your states rules.
-
General Partnership: The business will not file it's own federal income tax return; it is considered a pass-through entity. When each partner files their personal federal income tax return each will include the appropriate portion of the businesses earnings or losses along with their personal income and file one federal tax return each. State income taxes laws vary from state to state and it is recommended that you and your partner seek professional help with filing your businesses taxes.
Sales taxes (if your business is required to collect sales tax) are filed separately from income taxes and are paid to the state and or local taxing authorities. Consult your state comptrollers office or state tax office for your states rules.
2. How much it costs to get started:
- Your city or county clerk will charge a fee to record your DBA. This is usually between $15 - $50 but some some counties and cities charge more.
- Minimum deposits for a business bank account are usually between $50 - $100 and will often cost about $10 per month to maintain.
- Getting and EIN from the IRS is free. This is like your businesses federal ID#. You don't need to pay someone to get it for you
- Getting DUNS # is free. This is an ID used by many governmental entities to track their venders. You don't need to pay someone to get it for you.
- Business liability insurance will cost more or less depending on the type of risks your business has and the amount of coverage you need. Talk to a few local insurance brokers or agents with a good reputation to get quotes from and choose the one you like best.
- Not all businesses can afford a lawyer early on and some businesses do fine for a while without an lawyer. But like insurance, lawyers help reduce risk so as your business grows finding a layer you trust and get along with is a good idea. If you have legal concerns because of specific issues related to your business it is better to talk to a lawyer sooner than later. Legal matters typically don't get better with age.
** Reminder: This information is not legal or professional financial advice. This is educational material provided for educational purposes only. This information has not been reviewed by an attorney or licensed financial services provider.
The information provided above are simple explanations for potentially complex issues, questions about your specific situation should be asked to qualified professionals.
What's next after you file your DBA ?
-
If you have not done so yet, you need to define your business model and then validate your market. The business model defines the main parts of your business and how they fit together. From this model you will be able to start defining the business processes that will move your business forward.
-
Validating your market involves the customer & partner discovery process. You will go out and talk to potential customers and partners, asking them questions that will help you make sure the assumptions baked into your your business model are accurate and that they care about the problems you are trying to solve with your business.
-
One you are done with your business model & customer discovery you may or may not want/need a business plan. If you are seeking lending you will need one; if not you may not need one, but it is always a good idea to go through the process because it helps you fine tune you plans, challenges your expectations, and helps you figure out how much $$ your business can realistically expect to make.
-
Get ready to communicate what you do & how you do it to potential customers. More customer discovery is a good idea if you didn't talk with them about that before. You are going to be asked 'What is it' and 'what does it do' over and over again. If you don't really know or cant communicate it clearly it is going to be really hard for you. You would be better off not talking to potential customers until you have this straight and can communicate it.
-
Find someone to help you with your bookkeeping. Unless you have a strong financial background it is not recommended to keep your own books or do your own taxes. You don't need to pay someone yet but you should start looking for the right person soon. Pick someone you trust who talks with you like a person, not a number, and who you are comfortable asking questions to. This person is going to know your business, try to find someone you can feel some level of connection with.