How to Register a DBA in Maryland (Step-by-Step Guide)
If you’re a business owner in Maryland, you may be wondering how to register a DBA or “doing business as.” A DBA is also known as a “trade name,” “fictitious business name,” or “assumed name.” It allows businesses to operate under a name different from their legal name. This article will provide an overview of what a DBA means and a step-by-step guide on registering for a DBA in Maryland.
What is a DBA?
The acronym DBA is short for “doing business as” and refers to companies or individuals who operate under a name different from their legal name.
Registering for a DBA is an option for companies that want a more marketable trade name. This allows a business to market itself under a different name while still being responsible under its legal name.
For instance, if Jane Smith is a small business owner that makes handcrafted pottery, she can register a new DBA name, such as “Handcrafted Pottery by Jane,” to market her products and services instead of using her own name.
- Choosing a unique name
- Verifying its availability
- Filing the proper forms with the relevant government agency, such as the Secretary of State or the county clerk’s office
- Paying the associated costs.
Maryland DBA name registration
Choose your name
The first step in registering your new trade name is to consider it. When considering your name, it is important to remember the Maryland naming rules.
- Trade names in Maryland need to be unique.
- Avoid using restricted words such as “Savings,” “Trust,” “Credit Union,” “Insurance,” “Bank,” and “Banker” unless authorized to operate in those sectors.
- For instance, a business that is not a licensed bank or financial institution cannot use the word “Bank” or “Banker” in its trade name.
- Be cautious when using business entity designations such as “Corporation,” “Inc.,” “Corp.,” and “LLC.” A business that is registered as an LLC cannot use “Corporation” in its trade name, and a business that is not legally registered as a corporation cannot use “Inc.” or “Corp.” in its name.
Check name availability
The next step is to see if your proposed name is already used in Maryland.
- Go to the Maryland business express website.
- Click on the search for the business button.
- Type in the name of your proposed business to see if it is in use.
After ensuring that your chosen name isn’t in use in Maryland, running a domain availability check is recommended. Purchasing the domain can be a strategic move to prevent others from seizing the web address. This enables you to establish your business website – a valuable tool for advertising your brand and services.
Register your name
The application will require you to provide the desired new name for your company, alongside other fundamental details about your business, including:
- Section 3: Legal name of the proprietor of the trade name.
- Section 4: Unincorporated account number (applicable if the proprietorship or partnership is the owner).
- Section 6: Description of the nature of your business.
Completed forms and checks can be mailed to the Charter Division or hand-delivered to drop boxes in the lobby at the department’s Baltimore location.
Department of Assessments and Taxation
301 W. Preston Street, Room 801
Baltimore, Maryland 21201
Pay your filing fees
- A DBA filing fee of $25 is required, payable to the Department of Assessments and Taxation.
- For expedited service, there is an additional fee of $50, totaling $75. This is payable by check, cash, or credit card.
- For same-day service, an expedited fee of $425 is required, and filings must be submitted online or via drop boxes by 10:00 a.m. on weekdays, with payment by check or money order only.
Renew, amend, or withdraw your DBA
- After acceptance of your application, you can manage your DBA through an online portal, including renewals. To modify the trade name, a new application must be submitted.
- Your new trade name will be valid for five years and can be renewed at any time, six months before the expiration date.
- If amending the address or proprietor’s name, use the Trade Name Amendment Application, which incurs a fee of $25. Expedited service is available at an additional cost.
- To cancel the registration of your DBA, use the Trade Name Cancellation Application, which costs $25, and expedited service is available at an extra fee.
Obtain an EIN
The IRS assigns an Employer Identification Number (EIN) to business entities for tax purposes.
- Remembering that a DBA does not create a distinct legal entity is important.
- Sole proprietors who haave no employees can use their Social Security number for their tax ID, but an EIN is required if a DBA hires employees or has a separate business bank account.
- An EIN can be obtained online or via mail application.
Open a business bank account
After obtaining your EIN, you can establish a business bank account using your new business name.
A distinct bank account enables you to distinguish your business finances from your assets.
Advantages and disadvantages of a DBA
There are many advantages to registering a DBA:
- Adaptability: An assumed name can be altered more quickly than a legal business name. This allows business owners to be more adaptable to changes in the industry. With multiple DBA names, businesses can access more markets, attract customers, and increase brand recognition.
- Clear financial separation: Filing for a DBA allows business owners to establish a business bank account under the company name instead of a personal account. This separation allows for more transparent financial records, prevents confusion, and protects personal assets. It also makes it easier to receive cheques and card payments.
- Enhanced marketing opportunities: A well-crafted name can be more memorable, distinctive, and eye-catching than a legal business name. A unique name can make a strong customer impression, encourage brand recognition, and increase sales.
- Cost-effective solution: Compared to more complicated business structures, like LLCs, name registrations are generally less costly and complex, making them a viable solution for small businesses or entrepreneurs.
While DBAs offer a range of advantages, there are a few drawbacks to consider, including:
- Limited legal protection: Unlike LLCs and corporations, DBAs do not provide the same personal liability protection. Business owners will be personally liable for all debts, obligations, and legal issues.
- Increased administrative burden: To use a DBA name, businesses must follow legal procedures and regulations, which can be time-consuming and add to the administrative load
Who needs a DBA?
- Sole proprietors: These individuals own businesses without creating a separate legal entity. A DBA can help them use a different name for marketing their products or services and provide them with more flexibility to adapt to market changes.
- General partnerships: Joint ventures between two or more individuals who want to operate under a different name than their names. Filing a DBA allows partners to enhance brand recognition.
- Corporations: Business entities that want to use a name different from their legal name or conduct business activities under multiple names. For instance, a corporation with a subsidiary that sells software named “Tech Solutions LLC” but wants to sell hardware can file a DBA for “Tech Hardware” to distinguish the two business activities.
- Limited liability companies (LLCs): These flexible business structures allow owners to limit personal liability and protect their assets. LLCs can also register a DBA to conduct business under a different name or brand.
Why or why wouldn’t you need a DBA?
Why would you need a DBA?
- Operating under a different name: If you plan to use a name that differs from your legal or company name, then a DBA may be necessary.
- Multiple business names: Corporations, LLCs, sole proprietorships, and partnerships that operate under numerous business names may need a DBA to keep their branding and legal structures distinct.
- Test new products or markets: A DBA can be useful for testing new products or entering new markets without changing your legal name.
When a DBA may not be necessary:
- Operating under the legal or personal name: A DBA may not be necessary if you operate under your or your company’s legal name.
What is a DBA referred to as in Maryland?
In Maryland, a DBA is referred to as a trade name.
Who needs to register a DBA in Maryland?
All sole proprietors, LLCs, partnerships, and corporations in Maryland must register a DBA if they want to operate under a trade name that is not their legal name.
What are the benefits of setting up a DBA in Maryland?
DBAs simplify operating a business under a trade name and provide branding benefits. However, they do not offer legal or liability protection but separate personal and business assets.
When should I file my DBA registration in Maryland?
You should file your DBA registration in Maryland before using the trade name.
How long does it take to process a DBA in Maryland?
The processing time for a DBA is 4-6 weeks.
Can I reserve a name in Maryland before I formally apply for it?
Yes, you can reserve a name in Maryland before formally applying. Reserving a name is not required, but it can be useful if you’re not ready to officially start your business or if your name is unique. The reserve fee is $25, giving you 30 days of sole ownership. You can reserve your name using this link.
Do I need to advertise my new name in a local newspaper?
Maryland doesn’t require that DBAs are advertised in local newspapers, but there are many benefits to letting a local community know about your business.
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