How to Register a DBA in Montana (Step-by-Step Guide)
Starting a new business in Montana can be daunting. There are many legal terms and acronyms to get familiar with, and it is important to understand as much as possible. This article will focus on ‘doing business as’; we will learn what a DBA means, why and when you need to get one, and walk you through a step-by-step process of applying for one in Montana.
What is a DBA?
The acronym DBA, which stands for ‘doing business as,’ represents a company or individual operating under a fictitious business name. A DBA is a solution if your company desires a more marketable trade name than its official title. It allows a business to operate under a different name while still being legally responsible for the business under its legal name.
For example, if Steve Clarke owns a sole proprietorship that sells handmade instruments, he can register a DBA name, such as “Handmade guitars by Steve,” to market his products and services instead of using his own name.
Registering a DBA is common for sole proprietors, general partnerships, and corporations who want to use a fictitious name that is more descriptive of their services or products or simply want to use a different name.
Registering a new DBA varies by state but typically involves:
- Choosing a unique business name
- Checking for availability
- Filing the proper forms with the relevant government agency, such as the Secretary of State or the county clerk’s office
- Paying a DBA filing fee
Montana DBA name registration
Choose your name
In Montana, DBA names are known as assumed names. When choosing your name, make sure it’s unique and reflects your brand.
- Avoid using any business entity suffixes such as “LLC” or “Corp.” unless this is the structure of your business.
- Ensure your DBA name doesn’t contain restricted words, such as “bank” or “trust company,” as these terms may require additional licenses or regulatory approvals.
Check name availability
It’s essential to check its availability to avoid trademark infringement or legal issues.
You can check the availability of your desired name by searching the Montana Secretary of State’s business name database.
Once you have confirmed your proposed name is unique, we recommend checking to see if a web domain is available for your DBA name. This is a great marketing tool, and buying the web domain will prevent others from being able to use it.
Register your name
- Montana assumed names can only be filed online with the Secretary of State’s online filing portal website.
- You need to create a username and password before you can register your name.
- When you are registering your name, you will have to fill in the following:
- Applicant name, address, and phone number
- Business description
- Type of business (LLC, Sole Proprietor, etc.)
Pay your filing fees
Filing an assumed name registration costs $20.
Renew, amend, or withdraw your DBA
- Your name registration is valid for five years.
- If you need to renew it after that, you can do so by filing a renewal form with the Secretary of State and paying a $20 renewal fee.
- If you change your details, you must file an amendment form. This costs $20.
- You can file a withdrawal form if you need to withdraw your DBA. There is no cancellation fee.
Obtain an EIN
An Employer Identification Number (EIN) is a nine-digit number issued by the IRS to identify your business for tax purposes.
It is important to recognize that your DBA name does not create a new legal entity. If the original company had an established EIN, you would not need another one for DBAs.
Not all businesses need EINs. A sole proprietor can use their social security number as their tax id.
However, if you intend to hire employees or open a business bank account, you must get an EIN.
You can apply for an EIN online for free on the IRS website. The process is simple and typically takes less than an hour to complete.
Open a business bank account
With your Montana DBA registration and EIN, you can open a business bank account in your DBA name.
Having a separate account for your business makes it easier to keep track of your finances and file taxes. A separate bank account also makes it much easier to accept checks and credit cards as payment.
Advantages and disadvantages of a DBA
Registering a DBA can offer several benefits to businesses:
- Brand flexibility: A DBA can be more versatile than a personal name and can be changed if needed, allowing companies to adapt to product or service changes. A business owner can use multiple DBA names for marketing different products or services, which can help expand their reach and target new customers.
- Improved financial management: By opening a business bank account, business owners can use their business name on bank transactions, making it easier to separate one’s personal assets and business finances.
- Better marketing opportunities: A well-chosen name can be more memorable and descriptive, making it easier for customers to recognize and remember the brand.
- Cost-effective option: Compared to other business structures, like incorporating or forming a limited liability company (LLC), registering a DBA is often less expensive and less complex, making it a cost-effective option for small businesses and entrepreneurs.
There are a few drawbacks to registering a DBA:
- Limited legal protection: Unlike other business structures like LLCs or corporations, DBAs do not provide personal liability protection. The business owner is then personally responsible for all debts, obligations, and legal issues associated with the business.
- Increased legal and administrative burden: Registering a new name requires businesses to comply with all legal requirements and register the name with the relevant government agency. This can be a time-consuming process that may require the assistance of an attorney or other legal professional, which can be an added expense.
Who needs a DBA?
- Sole proprietorships: Individuals who own and operate their business without creating a separate legal entity.
- Partnerships: Joint ventures between two or more individuals who want to operate under a different name than the partners’ names.
- Corporations and LLCs: Business entities that want to use a name different from their legal name or diversify business under multiple names.
Why or why wouldn’t you need a DBA?
You need a DBA if you are:
- Operating under a different name: A DBA is necessary if you want to operate your business under a name that isn’t your legal or company name.
- Better marketing and branding: If you want to use a trading name that is more memorable or descriptive of your products or services, a DBA can help.
- Diversifying business activities: If you’re a sole proprietorship, partnership, corporation, or LLC looking to conduct business under multiple names, a DBA is required.
- Testing new products or markets: A DBA can allow you to try new products or markets without changing your name.
You might not need a DBA if:
- Using legal name: A DBA is not needed if you’re operating your business under your personal or legal company name.
- Single-owner LLC with no alternative names: A DBA is unnecessary if you have a single-owner LLC and don’t need to conduct business under a different name.
Can I reserve my name before I am ready to file?
If you want to reserve a name before you apply for your DBA, you can file a reservation of name form. It costs $10 and can be filed online.
How long is the processing time?
It takes 7-10 business days to process an assumed name registration.
Do I need to advertise my new name?
Montana does not stipulate that you need to advertise your new name in a local newspaper, but there are many benefits to promoting a new business.
Does my DBA give me a business license?
A DBA is not a business license. You may also need to apply for a business license depending on your business setup.
What’s the difference between a DBA and an LLC in Montana?
DBAs do not provide any asset protection and are not recognized at the federal level. They are simply a name change. In contrast, an LLC is recognized federally, may be taxed as a corporation, and provides its owners with limited liability protection from potential business debts.
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