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Registering Your New Business: Do It Right the First Time

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As some of my regular know, I've taken the first step to starting up a company. The second step after you have an idea for a business is to put the legal framework in place so that you can conduct business not only efficiently, but legally. Start your new business out right by securing a DBA—Doing Business As—document to establish your identity and the point at which your business begins.

What Is a DBA, What Does It Do, and Why Do You Need It?

Also known as a fictitious business name, assumed name or trade name, a DBA (Doing Business As) designation is one of the most critical first steps in creating your business as a legal entity. For instance, in many cases you cannot open a bank account or merchant account under your business name without first having a DBA statement to prove that you are a legitimate business, even if you have already established your business structure as a sole proprietorship, partnership or corporation with another name. A DBA is not only part of the legal structure you need to become a legal business entity, but part of your branding and identity too, especially if you are operating a business with a different name than your sole proprietorship, partnership or corporation. For instance, if you have a registered identity as Main Street Partners LLC, and want to open a flower shop called Flora's Flowers, you would need to register Flora's Flowers as a DBA.

Choosing Wisely

According to the Small Business Administration (SBA)—the branch of the government concerned with small businesses and a clearinghouse of useful information—naming your business is a serious matter. While many small business owners start out as freelancers operating under their own name, a well-chosen business name gives a more professional impression and creates brand recognition. Thinking about how your name will look on a logo, company letterhead, website and social media is a big part of choosing a name, as is considering the connotations the name evokes. Does the name present your company honestly, and reflect the tastes of the market you want to enter? The name should be unique, the SBA advises, not something to get lost in a crowd of similar names.  After you have chosen a name or have a list of names in mind, you could say that the job is just beginning.

Getting There Is Sometimes Not Half the Fun

There are three steps to the naming process that need to be followed exactly. Regulations governing these steps can vary from state to state, according to Entrepreneur, but the basic steps are:

  1. Check for available trademarks.
  2. Register your name according to the regulations of your state and county, and obtain the needed permits at each level.
  3. Register your name as a trademark.

Checking for available trademarks is protection for your future and your business. The United States Patent and Trademark Office maintains a searchable online database so that you can make sure your desired DBA name is available. By searching for a name before you register it, you are protected from claims of trademark infringement. Trademark infringement is, according to the Legal Information Institute at Cornell University Law School, using a registered trademark in commerce that has the potential to cause the consumer to become confused as to the source or origin of the goods or services offered.

Next, registering your business in your state can be a multistep process, from registering your DBA, complying with any publishing regulations, and getting the needed business permits, tax certificates, and other required documents together. It is a lengthy and multi-agency process. Compliance is, however, critical to the future of your business. In many cases, having a specialist in business law assist you in the process can bring a huge savings in time and money both now and in the future. There are firms such as LegalZoom that have well-established reputations in handling tasks that to an individual can seem like an insurmountable obstacle course of regulations and laws. Doing it right the first time means that you're not going to have to pay a second time.

And Finally

Back to the trademark, just to highlight what it can do for you once you're ready to register. You know that after you've created your business, having a trademark name protects your business name from being tarnished either on purpose or by accident. By registering your researched DBA name as a trademark, you're protecting the good name and reputation of your business. Your DBA document is the “birth certificate” for your business, even if you already have a corporate name. By making sure you're in full compliance across the board before you even open the doors or put up the website, you're protecting your investments of time, effort and money and are really ready to grow your business.

Last updated on March 5, 2014.

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