What is a DBA?

If you’ve ever considered working for yourself, or starting your own business, you may have wondered: what is a DBA? Is a fictitious business name the same as a DBA? What are the benefits of a DBA to my business and myself?

DBA application filing is used by state agencies to identify individuals doing business as (DBA) a fictitious name, trade name, or any name that differs from his/her given name. There is no difference between what is called a fictitious business name and DBA application filing. In fact, it’s possible you may hear people use them interchangeably; just know that they are one in the same.

Freelancers, consultants, and small business owners file a fictitious business name (or a DBA) to notify the public as to who owns, or is doing business as the name of a that particular business.

The Benefits of DBA Application Filing

Regardless of the type of work you do, there are several good reasons to file a DBA for your business.

While a DBA does not provide any liability protection or tax benefits to you as a small business owner or freelancer, they are much cheaper to establish than every other type of business entity. With a DBA, you’ll also be able to apply for a federal tax ID number, which is required is and when you decide to open a bank account in the name of your business, acquire credit, or make payments in the name of your business.

Moreover, a DBA is a great way to protect your personal identity. Instead of providing clients with your Social Security Number (SSN) for completing various tax forms, you can use the federal tax ID number, which is sort of like a SSN for your business; it’s unique to your business name, and allows you to keep business dealings more organized and separate from your personal finances.