How to Set Up a DBA in Alabama
A DBA (Doing Business As) allows individuals and businesses to operate under a different name or expand their brand presence while maintaining legal compliance. In this guide, we’ll walk you through the step-by-step process of setting up your DBA in Alabama.
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In Alabama, a DBA is referred to as a trade name. In addition to meeting all of Alabama’s typical naming regulations, trade names must be unique and cannot be the same as any other business.
How to search DBA names in Alabama
Search for name availability
To determine if a name is available for use, you can use the Alabama Secretary of State’s Business Entity Search and see if your choice is available. If the name does not appear here, it is able to be used so long as it meets other requirements.
Understand Alabama naming rules
Alabama trade names cannot include:
- Any banking-related words or insurance-related words without proper permission from a governing agency
- Words that could confuse your business with a government agency
- A professional designation (like attorney or engineering) without a copy of the appropriate license
- Indication or implication that the business is engaged in unlawful activity
Check domain name availability too
While it is not a legal requirement, it can also be helpful to see if your name is available as a web domain and as a username on social media accounts. Check any websites you plan to use as well as performing a Google search to see what comes up.
Have a name in mind? Check on name availability first here.
How to register a DBA in Alabama
Provide proof of the business name
Alabama has a unique requirement that you must have operated under your trade name before you can formally register it. In order to secure a trade name, you will need to provide three “specimens” of usage. These can include any marketing material, like flyers or business cards, that is unaltered and legible. You will need to show where and when you first used the name, in any state, so it is important to keep a record of this.
Register the name with the state
After you have acquired proof of your trade name being used, you can proceed to register it with the Secretary of State. This can be done online through the Secretary of State’s website, or you can fill out the Application to Register or Renew Trademark, Service Mark, or Trade Name form.
In order to complete the DBA registration, you will need to include basic information about your business, as well as the following:
- Description of the trade name
- Description of the goods or services that will be offered under the trade name
- An explanation of how you plan to use the trade name
- Any other entities that will be authorized to use the trade name, if applicable
- Date the trade name was first used
Pay the filing fee
You can pay the $30 DBA filing fee by credit card online or by issuing a check along with your forms.
Ready to register your DBA? Fill out these forms.
What comes next
The requirements for a business owner don’t end when the business is formed, or a DBA is established. Alabama requires small business owners to comply with all state laws, and various tasks will help your business run more efficiently throughout the years. This is by no means an exhaustive list of tasks, but it covers some common steps to take after your DBA is established.
Consider getting an EIN
The structure of your business will determine exactly how your business is taxed. Sole proprietors, for example, file business income and expenses as part of their personal income taxes. Your LLC or corporation, on the other hand, files as a separate business entity. When taxes are filed separately, they need to be tracked by the IRS as a tax-paying entity – like you have a Social Security Number, a business has an EIN.
An EIN, or Employer Identification Number, is issued by the IRS for this purpose. Any business that has employees or files excise taxes will have to have an EIN, regardless of the type of business entity the structure is. But even if your business doesn’t fall into this category, an EIN can be helpful.
Banks may require you to have an EIN before opening a business bank account or a line of credit. Being able to provide a tax ID other than your personal Social Security Number can also be helpful in protecting your own privacy.
There is no cost to be issued an EIN through the IRS, and the process is immediate online.
If you plan to get an EIN, you can do so on the IRS website.
Obtain licenses and permits
Alabama has three primary licenses at the state level:
- Business privilege license and store license: These are obtained through the county probate’s office in each county where your business operates. These general licenses allow your business to operate in Alabama.
- Business tax registration: A seller’s permit allows your business to collect sales tax on taxable goods and services.
In addition to these business licenses, certain industries and professions may also need licenses through Alabama’s Department of Revenue.
Each county and city can also create its own requirements, so you must check with your local government office to obtain any additional permits you need.
Open a business bank account
Most of the time, you will want to separate your business finances from your personal ones. This can be a requirement if you have an LLC or incorporation, but it’s also helpful for any business owner. Having a separate account allows you to monitor income and expenses for your business, track profitability, and otherwise maintain a delineation there.
Keep your DBA current
Trade names in Alabama need to be renewed every five years. This can be done online or by mail, using the same forms that are used to establish the fictitious business name. If you fail to renew your DBA on time, the name can become available for another business to use.
What is a DBA?
The acronym “DBA” stands for “doing business as” and is used to refer to a business operating under a different name from its legally registered name. Different states use a variety of terms to refer to this concept, like “fictitious name,” “assumed name,” or “trade name,” but they all amount to the same idea.
A DBA is a name that will be used for your business operations. It’s what you may see on signage and business cards, what customers will know you by, and what you will use on most documents.
Who is a DBA best for?
Not all businesses will need to use a DBA. Along with state-specific requirements, the legal structure of your business and the owners’ personal preference will be major factors in whether this is necessary.
When it comes to business structures, the legal process for registering your business may indicate whether a DBA is useful. The most common uses of a DBA are:
- Sole proprietorships and partnerships will be registered by default under the name of their owner. Since there is no formal paperwork to name the business, there is no other name that it could be listed as. In this case, a DBA would allow the business to have a publicly-facing name other than your own.
- Franchises often use a DBA to establish their business as a local one. For example, you may own a local McDonald’s and will need to register it as something like an LLC or corporation. The business may then be called ABC Burgers, but a DBA would allow you to operate as “McDonald’s” to tie you to the parent company.
Other business structures, like an limited liability company or corporation, do not usually need to use a DBA. This is because part of registering these businesses includes choosing a name, which can be anything. Some localities may require this, but it is rare. These businesses can always choose to register a DBA if they choose.
Why would entrepreneurs choose to set up a DBA in Alabama?
You may wonder why a DBA would be necessary, especially if you have named your business during the registration process. Whether a DBA is necessary or useful can depend on the structure of your company, where it operates, and what you are planning for the future.
For a sole proprietorship or general partnership, the business is not considered a legal entity separate from the owner or owners. This means that it is legally registered under their personal name rather than a chosen business name. Some people will choose to operate under this name for the life of their business, and there is no reason you can’t do this. However, if you want to use another name, a DBA would be necessary. This can be a good choice because:
- You don’t reveal your own name to all clients.
- You can create a strong brand around your business.
- A DBA can make your business more credible to potential lenders or investors.
Business structures that form a separate legal entity, like an LLC or a corporation, are able to choose a business name during the formation process. Most of the time, the business can operate under that name for its lifetime. But there are still a few cases where a DBA may make sense for these businesses:
- Opening a new branch of the same legal entity, which will operate under a different name that, requires a new DBA.
- Operating in a state other than the formation state, where the existing business name is taken.
- Franchises that will operate under their well-known name, even though the individual business was established under another. In this case, the larger name of the business is more recognizable and useful.
Ultimately, a DBA can often be a simple and effective way to brand your business in various scenarios.
Cost to get a DBA set up
In Alabama, the filing fee for setting up a trade name is a flat $30 – but that is not the only DBA cost that will be necessary.
If your business is an LLC, corporation, or another business structure that must be registered with the state, then fees will be associated with this. Depending on the specifics of your business, this can cost up to $220 in Alabama.
Alabama will require proof that you’ve been using the trade name for business operations before you can register the name. This is usually done by providing some kind of marketing materials, which will cost money to produce. Since you must be operational, you will also have to pay fees for business licenses before registering.
When can you get a DBA in Alabama?
You must operate under a trade name in Alabama before registering it with the state. This means that you cannot have a DBA until your business is registered and operational and you have multiple marketing materials that you can produce to show use of the name.
Do I need to file a DBA with the county probate in Alabama?
Many states issue DBAs not through the state department but through local county clerk’s offices. Alabama, however, issues trade names through the Secretary of State, so there is a single process and single filing fee. While counties may require other licenses, you will not need to re-register your trade name locally.
Does a DBA protect the name of your business?
DBAs must be unique within the state of Alabama, which means that once you have registered a DBA, no other business in the state can use it for their own. However, this does not work between states, so your name could be present elsewhere. Only trademarks offer legal protections that prevent names from being used anywhere else.
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