A DBA (Doing Business As) account is a business account usually opened by owners of small businesses. One of the reasons why people want to maintain a DBA is because they want to separate their business account from personal account for easier manageability and accounting of funds and for separate tax assessment. To open a DBA account, here are helpful tips:
- Apply for a business name. You will use this business or company name in opening a DBA. If you are venturing on a single proprietorship business, you are the only signatory. However if it is a partnership or a corporation, you will need the signatures of the other persons involved – both in the registration of business name and the opening of DBA account. Apply as well for a social security number for your business name. Do not use your personal social security number because your business is a separate entity from your personal category.
- Use your DBA if you want to put up a branch or enter into another business operation. This will be useful if, with your business name, you have LLC (Limited Liability Company) or Inc. attached. With this method, your business branches will be operating under a single entity though with different DBAs.
- Enter your business name in the business site of the state where you it will operate. Search for the site on the Internet. For instance, type: “register my business name in California”. Indicate your name. Without indicating your name, your registration will not be acknowledged. It is important that you follow instructions to be legitimately registered. Proceed with the confirmation and have it printed. You will need this printed confirmation when doing transactions at the bank.
- Bring the printed confirmation to the bank. Do not forget to carry your social security number and two kinds of identification cards. Show all these documents to the bank assistants so they can process your DBA application.
- Fill out the bank application forms. All information in the bank forms should be consistent with all the other information in your social security, LLC and business registrations. This is to avoid discrepancies that might lead to confusion and conflicts in your future transactions.
- Submit the filled out forms in the bank. They will then process your DBA. However do not fail to renew your registration every five years (in the same state) to maintain your DBA account. Renewal is not a hassle at all as it is like renewing your driver’s license. Failure to renew after five years will render your DBA invalid. Then you will have to go through the process of registering all over again. On the other hand if you continue using your DBA in your business after it has already lapsed, you will be held liable and end up in prison when caught. Your business will also be affected and might suffer closure. To notify you if your registration is near expiration, a notice (through mail) will be forwarded to you for information and update.
- Use a unique business name. By “unique”, it means you have to come up with a name that has not been taken yet. Each business name, as already mentioned, is an individual entity in itself. Hence, make sure you use a business name for the sole purpose of the business it represents, not for any other business.
When opening a DBA account, make sure you have all the documents and requirements ready before going to the bank. Proceeding to apply for a DBA without the necessary papers will just be a waste of time and effort because the bank cannot accept your application if you do not present to them the requirements.