How to Start a DBA in Illinois
Illinois has a bustling economy and a diverse population. Cities like Chicago, Springfield, and Peoria offer a home for large businesses, foreign investors, and small businesses with various products and services. With such a welcoming environment for entrepreneurs, it is no wonder you may consider starting a new business or expanding one there. If your business, whether a startup or not, needs to operate under a trading name, or DBA, you can easily set it up in The Prairie State.
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What is a DBA?
The acronym “DBA” means “doing business as” and refers to a business operating under a different name from its legally registered name. Other states use a variety of terms to refer to this concept, like “fictitious business 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 small 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. But with a DBA in place, your business’s proper legal name remains something else, usually the owner’s legal name.
How to pick a DBA name in Illinois
Ready to set up a DBA? If so, the first thing you need to do is check on name availability. Illinois requires all DBAs, or assumed names, as they are called in the state, to be unique. Here’s how to run a name search:
Conduct a name search
First, you need to determine whether the name you like is available.
Illinois’s Secretary of State website has a name search function to type in the name and see if a registered limited liability company or corporation has used it. The name is probably available if your search does not return results.
Make sure your name follows Illinois rules
Once you have determined your name is available, you will also need to be sure it is allowed under Illinois’s naming rules. Assumed names in Illinois cannot include:
- Words that could confuse your business with a government agency
- Words or phrases that indicate or imply your company is a corporate fiduciary when it is not.
- Words that indicate the business is in banking or insurance without authorization
- Words or phrases restricted by other Illinois laws
Illinois provides a complete guide on naming conventions in the state.
Make sure it’s a solid business name
Since your DBA is meant to be your public-facing name, it is likely what you will use on marketing materials and online accounts. Before you commit to a word, it can be a good idea to look at available domain names for your website and be sure your name is available. This will help prevent confusion and ensure clients find your website quickly when they search for your business.
You can also look on popular social media websites like Instagram to ensure the company name is available as a username.
Have a name in mind? Check on name availability first here.
How to register a DBA in Illinois
While Limited Liability Companies (LLCs) and corporations are less likely to need a DBA, the process for these companies in Illinois differs from other business structures.
Illinois DBAs for corporations and LLCs
An LLC or corporation only needs to file a DBA if they are going to work under a name different from their registered business name. Here are the steps:
- Go to the Illinois Secretary of State’s website
- Fill out this online form
- Submit the form online or in person and pay the filing fee, which can be submitted using a credit card.
The DBA filing date will be your new name’s effective date.
Illinois LLCs for sole proprietors, partnerships, and professional services corporations
These businesses must register a DBA when choosing to operate under a name different from the owners’ or names. Unlike LLCs and corporations, a sole proprietor or partnership must file for an assumed name through the county clerk’s office where they operate. The process and rules may differ slightly for each county. Here are the steps:
Check in with your county clerk’s office
Go online and see if your county clerk has DBA information on its website. If not, you’ll need to call or visit the office in person.
Fill out the proper forms
You may find these forms online or may be able to pick them up at the country clerk’s office.
Submit the paperwork
Run a local ad, if needed
In some counties, you not only need to submit registration forms to form a DBA, but you may also need to run an ad in a local paper within 15 days of filing for a DBA. The Cook County clerk, for example, requires an ad to be run once a week for three weeks and include the company name and business address.
Receive a certificate in the mail
Once you’ve completed these steps, a certificate of assumed name is issued.
Ready to register your DBA? Fill out these forms.
What comes next
After you have filed for and secured a DBA in Illinois, you’ll want to ensure you keep up with all Illinois business requirements.
Consider getting an EIN
If your business still needs an Employer Identification Number through the IRS, getting one is a good idea to consider now that you have your DBA in place. These numbers serve as individual tax IDs for businesses, allowing the Internal Revenue Service to track and manage taxes easily. You can think of them like a Social Security Number for your business.
Businesses with no employees and no excise taxes are not legally obligated to have an EIN in place. However, they can offer privacy as they stand in for an owner’s SSN. You may also be asked for an EIN to open a business bank account or work with some lenders.
There is no cost to obtaining an EIN; any business can have one. Just to let you know, when you apply, you should use the company’s legal name, not the assumed name.
If you plan to get an EIN, you can do so on the IRS website.
Obtain licenses and permits
The primary business license in Illinois is the Certificate of Registration or License, often called a seller’s permit. This allows a business to collect and pay Illinois sales tax and other state taxes. Depending on the type of taxes a company produces, they may need a Registration or a License. Additionally, some industries and professions require additional licenses.
Individual counties and cities throughout Illinois may also require their licenses and permits.
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 preferences will be significant factors in whether this is necessary.
Regarding business structures, the legal process for registering your business may indicate whether a DBA is applicable. The most common uses of a DBA are:
- Sole proprietorships and partnerships will be registered by default under their owner’s name. 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 yours.
- Franchises often use a DBA to establish their business as a local one. For example, you may own a local McDonald’s and need to register it as 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 a 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 Illinois?
Specific business structures, like an LLC or a corporation, allow you to register your business with your chosen name, while others are automatically registered under your name. Depending on your business type, there may be different benefits to using a DBA in Illinois.
Reasons your LLC or corporation may use an assumed name:
- You are expanding a business into a state where your name is taken. If you cannot file your existing name as the legal name, you can use a DBA to operate with your chosen name.
- You are opening a franchise. Since you cannot legally register as the name of your business, you may use a DBA to still operate under the more commonly known name.
- Your business is expanding to another product line or market, and you want to brand it properly without forming a separate legal entity.
- Your business was registered with a name you no longer wish to use.
More commonly, a sole proprietor or general partnership will use a DBA. This can be for many reasons, but most often:
- It is better for marketing to use a business name rather than an owner’s legal name.
- The business owners wish to keep their names more private.
- In a partnership, it is more accurate to use a new name than one partner’s name.
A DBA is a simple and inexpensive way to ensure your business is adequately branded while complying with all Illinois regulations.
Costs to set up a DBA in Illinois
Before establishing a new DBA, you will need to have a business registered with the state of Illinois. For a sole proprietorship and partnership, there may be no state fees, while LLCs have formation fees of $500, and corporations start at $150.
You may also have to pay costs like:
- Pricing may include a $25 name registration fee.
- Any costs associated with a registered agent service.
- Any costs for specific business licenses and permits.
Assumed name fees in Illinois
The exact cost for an assumed name in Illinois will vary. For LLCs and corporations, the process is done through the Secretary of State and costs $150. However, this amount can be adjusted based on the renewal date of your DBA and keeps your business in good standing. They renew every year divisible by 5 (2020, 2025, 2030, etc.), so if you apply between those years, you will pay only for the applicable years.
Other business entity structures file at the county level for an assumed name. Each county sets its fees, typically about $10 to $100. For example, Cook County charges $50 for this. There is also a requirement to run ads in a local paper, which will have a cost set by the newspaper itself.
Ongoing DBA costs
State-level DBAs expire and will require renewal, which costs an additional $150. DBAs will also be subject to average ongoing business costs, like the $75 per annual report filing fee.
Do I need to renew my DBA in Illinois?
For assumed names at the state level, a yearly expiration ends in a 5 or 0. This applies to LLCs and corporations with an assumed name. For other business structures, assumed names are issued by county clerks, who can each set their expiration terms.
Does Illinois have DBAs?
Illinois allows businesses to operate under a name other than their legal name. While this is often called a DBA (“doing business as”), Illinois calls it an assumed business name. If you are looking to complete this process, look for information on assumed names in Illinois.
What’s the difference between an LLC and a DBA?
An LLC is a business that provides liability protection for company owners and must be registered with the state. A DBA does not provide any protection for personal assets; it simply identifies your business with a different name.
What is the publishing requirement for DBAs in Illinois?
DBAs issued through the county clerk requires applicants to publish a legal notice in a local weekly newspaper. This must appear within 15 days of DBA registration, once a week for three consecutive weeks. Applicants must present proof of publication within 50 days of the name application, including a Certificate of Publication from the newspaper.
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