Archive for November, 2009
Fictitious Name (DBA)
November 23rd, 2009 | 
Author: A fictitious name is commonly referred to as a DBA, which stands for “Doing Business As”. A fictitious name is any business name that does not contain your own name as a part of it. In some states, that means your legal name (frequently first and last).
If you are not a corporation and you plan to conduct business under a fictitious name, you must file a DBA. If you are a corporation, ownership of your name is ensured when you incorporate. Also, if your legal name is considered very common, you may be required to file a DBA.
Filing your DBA is one of the first tasks to be undertaken because every other piece of paperwork requires the business name. Your bank will also require a copy of your DBA before they will open a business account under that name. This is the only authorization they have for depositing or cashing checks made out to that business name or written against its account.
Your business name should be free of conflict with names already registered in your area. Find out if a corporation has staked a claim to your name by calling your state’s office of name availability. You may also wish to check the DBA books at the county clerk’s office. Finding out at a later date that your name is already legally registered to another business will result in your having to redo all of your paperwork.
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Home-Based Business
If you have elected to have a home-based business, restrictions may not permit you to get a business license to operate in your city. You may be forced to move your business outside the home or operate outside of the law. If your family happens to be moving and you are a seasoned entrepreneur, you may wish to select your home partly on the basis of whether or not that city’s ordinances will allow you to operate your business – or any business – out of your home.
If you are thinking of living in a planned community, don’t forget to check into any restrictions that the association may have that relate to business use of your home. Even if the city will allow you to operate your business, the association may preclude that option.
The passage of the Model Zoning Ordinance did much to help protect the legalities of working from home. However, different types of businesses may be subject to special restrictions by the city or county. For instance, a mail-order business may be allowed in your home, but a direct-sales operation may be prohibited. Repair services may be allowed, but only if they do not involve the use of toxic chemicals. Food services will probable be disallowed, but the city may allow you to use your home as an administrative office for your business.
In most cities and planned communities, home-based businesses are not permitted to change the appearance of the neighborhood and, therefore, you may be prohibited the use advertising or equipment that can be viewed from the street. Very often, police or fire inspections will be conducted to see that your business does not violate any of several restrictions. Doing some diligent ground work ahead of time may eliminate the possibility of selecting a business location only to find later that it was not an appropriate and/or legal choice.
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If You Fail to File
Registering a business name is very important for your own protection as well as for compliance with the law. Registration of that name gives you exclusive rights to it. It also keeps others from filing the same or a similar name and capitalizing on the hard work and investments you have made in your business.
Unfortunately, there are individuals who lurk in the shadows waiting for just such an opportunity. About eight years ago, we had a business owner in one of our classes who had built a very successful electronics firm. However, he failed to file a DBA. Someone else discovered his error, filed under his business name and offered the option of either paying to buy the name back or ceasing to do business under that name. The business owner refused to pay the blackmail and chose to re-establish under a new name. However the continuity of his business was set back and he lost a large amount of business trying to re-establish under the new name.
The time and money required to file a DBA is very small compared to the benefits you will derive from becoming the legal owner of your business name.
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Location Considerations
Selecting your location and getting your business license is an interactive process. A business license is granted for a specific location and the selection of the location must take into account licensing restrictions.
Contact the City or County Clerk’s Office in the city or county where you wish to locate your base of operation. They are an excellent source of information regarding police, fire and health permits needed for your business. Since any business location must fall within the zoning regulations, you may obtain verification from the zoning commission to determine if your business is approved for the location you have chosen. The local business license bureau can also help you with your decision by giving you information on any special restrictions as to types of businesses allowed or disallowed at any location.
If you have decided to locate in a shopping center or industrial area or other commercial location, call the chamber of commerce or city and ask for any publications with listings of facilities available showing number of square feet, price per square foot and other pertinent information.
You may also contact the management of the commercial or industrial complex you are considering and request written information about that location and current availability of leasing space. You should be able to get detailed information as to lease terms, restrictions, traffic patterns and other demographics. Be sure to read carefully and understand all the terms contained in a lease agreement. They vary and may well spell the difference between profit and loss for your business.
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Get a Business License
Why do you need a business license? The answer is simple. If your company is going to operate within the law, the city or county in which you will be doing business will require you to obtain a license or permit.
If that business is service-related and performs any portion of its work in other cities outside of its operational center, you may also be required to buy licenses in those cities. For example, if you have a repair service and you make several calls to homes away from the city where your shop is located, you could be obligated to purchase business licenses in the cities you service. For occasional work in another city, you may only be required to obtain a permit for those days on which you perform the work.
Business licenses are serious matters in most cities. They provide a source of revenue for the city or county. Licensing is also a means of controlling the types of businesses that operate within their jurisdictions. It is true that many businesses are currently operating without licenses. A crackdown in one major city showed that almost 50% of its businesses had failed to produce current business licenses Fines were imposed and ultimatums issued that failure to secure licenses would result in shutdowns. A business licenses is inexpensive and lends credibility to your operation. Without one, you, too, run the risk of being discovered and fined and/or barred from doing any business at all.
