How to Set Up a DBA in Texas
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 Texas.
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What is a DBA?
A DBA, sometimes known as a fictitious name, trade name, or DBA name, depending on which state you are acquiring, is a state-level name that your company can use to do business under. Or, in simpler terms, a DBA is just another name you can use for your business.
Sole proprietors can benefit significantly from using a DBA because instead of using their name to run their business, they can use a DBA to operate under a different name, which makes your company look more legitimate and trustworthy to future consumers.
If you are thinking about a unique business name for your startup as a sole proprietor, the next step would be DBA filing to make sure the name you thought about could be the legal name for your business.
When you register for limited liability companies (LLCs), general partnerships, or any type of business entity, acquiring a DBA is an excellent way to start.
How to search DBA names in Texas
Now that you are sure that you want to file for a DBA in Texas, it is essential to know that no business can operate under the same name, so you might want to think of a unique name for your business and get the DBA as soon as possible so no other company can beat you to it.
Thought of a name yet? Here is a step-by-step guide on how to search if the name you want is up for grabs in Texas:
Go to the Secretary of State Website in Texas
To find out if the name you like is available, you must visit the Secretary of State’s website in Texas and look for their business name search tool. It’s a name database that you can search for all registered Texas businesses and DBAs, allowing you to find out if there are names that match the one you are planning to register and set up as a DBA.
Type the DBA name you wish to use
Now that you are on the SOS website and have found the name search tool, just type in the name or list of words you would like to use for your business to check for their availability. Note that it is better to create a list of names before searching. That way, you can instantly check availability as you think of an appropriate name for your business. If there is no match for the words you typed in, you are free to register under the name you searched.
Make sure your name is strong
Choosing a name for your business can be exciting, but you should choose a name that is relevant to what your company does and what products and services you sell. Also, avoid hard-to-say words, and choose words that will not limit your business’ potential growth.
Consider reserving the name
If you want the name for your business but are not ready to start the business or register as a DBA, you can always reserve the name for future use. To book a word, you can go to the SOS Texas Portal. The filing fee is $5 for securing a name for 120 days.
Have a name in mind? Check on name availability first here.
How to register a DBA in Texas
Are you ready to set up your DBA and get your business up and running in Texas? Registering a DBA in Texas is easy to do and can offer you the financial freedom you’ve always wanted as an entrepreneur. So if you are ready, here are the simple steps to get you started:
Think of a business name
If you haven’t thought of a business name to use as your assumed name for your business, you need to do the steps above and check for its availability before filing for a DBA. You can’t file any paperwork without the name of the business.
Go to the Texas Secretary of State’s website
Filing for a DBA is different in each state. In Texas, you can file online by visiting the Secretary of State’s website and filing an assumed name certificate. You can either file online through the SOS portal or go to your local county clerk’s office in person. To file online, you must create an account, which is very easy.
Go to your local county clerk’s office
If you don’t want to file an assumed name or fictitious business name, you can always visit the county clerk, but before you do, make sure you already have these DBA forms filled out to save time. The forms are simple to fill out and usually ask for the business name, office address, and contact information.
Note that you can pay the filing fee with a credit card. However, it is subject to a convenience fee of 2.7% of the total costs, which means the total price you need to pay is around $25.60.
Ready to register your DBA? Fill out these forms.
What comes next
Now that you got your DBA set up, what comes next for your business? Here are a couple of follow-up steps that can get your business running:
File for an EIN
An EIN or an Employer Identification Number, also known as a federal employee identification number, is essential for small businesses looking to hire employees to work for them legally. An EIN is necessary, especially for business tax purposes. It is a unique 9-digit number that identifies your business. Unlike your social security number, an EIN is used for business purposes only.
Consider getting a domain name and building a website
Businesses can generate more leads and potential clients in this digital age if they take their business online. If you got your DBA set up and want to create more potential clients, you can also set up a domain name for your business and build a website to broaden your reach.
Having the same domain name as your assumed name or DBA is always better. However, if the DBA is available and the domain name is not, you can always get creative with using acronyms and other nicknames for your business.
Let’s say your business name is Gonuts Donuts; you can use the acronym GD and add the city or street your business is located at. For example, gdhouston.com might be an available domain. After all, 60% of all internet users are mobile, meaning anyone can reach or stumble on your website anytime.
Register for licenses and permits
The next step is registering for the business licenses and permits you need to operate your business. Some businesses like medical practices, liquor stores, or restaurants require the necessary permits, such as a liquor license and a health permit. If you are unsure what permits you need to legally operate your small business in Texas, you can check the Business Permit Office list here.
If you plan to get an EIN, you can do so on the IRS website.
Who is a DBA best for?
A DBA is best for sole proprietors who want to operate or do business under a different name other than their legal name or personal name. For sole proprietors, a DBA allows them to work under an assumed name without having to file or open a separate LLC business structure.
So as you know, a DBA is different from an LLC. While an LLC is a formal business structure, a DBA is just another name your business can operate under. However, an LLC is a legal entity that can benefit from having a DBA for business growth and creating separate entities within a growing small business.
For example, suppose you already own a small business that sells one thing. In that case, you can also expand and create a separate legal entity with a DBA to differentiate between these two businesses regarding legal protections and liability.
Why would entrepreneurs choose to set up a DBA in Texas?
There are many reasons to get a DBA instead of an LLC or any other business entity, especially when starting. With that in mind, here are some of the benefits of creating a DBA in the state of Texas:
- Having a DBA allows you to apply for an employee identification number or EIN, enabling you to hire employees or freelancers.
- Getting a DBA is the most affordable way to start a legitimate business as a sole proprietor.
- A DBA will allow you to do business using a different name, which also allows you to create a business bank account and start credit lines with an assumed name other than your legal name.
- Acquiring a DBA is sometimes required by state laws to open a business.
- Existing companies can use a DBA to rebrand without changing their original name, whether incorporation or LLC.
- A DBA offers privacy protection since you can do business under a different name.
- A DBA will make your business more legitimate and trustworthy, which is essential for growing your client base.
- A separate company or trade name is essential for small business owners to start a brand.
Cost to get a DBA set up
Many people are hesitant to get a registered name for their small businesses because of the cost and filing fees. However, DBA registration is the most affordable way to get a legitimate business up and running. The cost to get a DBA set up varies from state to state.
In Texas, the state fee to get a DBA with the Secretary of State is only $25, on top of the $5 you spent if you reserved the name beforehand. However, you should also note that there is a $10 abandonment fee if you don’t end up using the name registered on top of the DBA cost.
How long does it take to get a DBA in Texas?
DBAs usually take 5-7 days, but you can also pay a fee of $25 per document to expedite and get it as soon as the next day. DBAs are not business entities, which is why there are not many requirements, and they don’t cost as much as setting up your LLC or general partnership.
Can you file a DBA online in Texas?
Yes, you can e-file and get a DBA online in Texas for the same $25 through the SOSDirect Portal. All you need to do is create an account, sign in, and complete the following e-forms to acquire an Assumed Name Certificate.
How much taxes does a DBA pay in Texas?
Because most DBAs are sole proprietorships, you will need to pay two types of taxes for your DBA’s profits. The first is your income tax from your assets, and the second is a 15.3% self-employment tax for your DBA. Since you are an entrepreneur and you are not working for a company, you need to pay the taxes in full instead of the company you work for shouldering the other half.
Does a DBA offer liability protection?
No, a DBA doesn’t safeguard your personal assets. However, an LLC does. If you have an LLC set up and a DBA, assets are protected by the LLC.
Find out how to set up your DBA
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