How to Register a DBA in South Dakota (Step-by-Step Guide)
Starting a new business involves many decisions. The process can feel overwhelming for small business owners without designated admin staff. One of the most significant decisions to be made is naming your business. This article will focus on what a DBA means, if and when needed, and a step-by-step guide to applying for a DBA in South Dakota.
What is a DBA?
DBA is an acronym for “doing business as,” which refers to companies or individuals who operate under a name that differs from their legal name. It is often called a “fictitious business name” or “trade name.” It allows a business to market itself under a different name while still being legally responsible under its legal name.
For instance, if John Smith owns a sole proprietorship offering financial services, he can register a DBA name, such as “Financial Services by John,” to market his products and services instead of using his own name.
Sole proprietors, general partnerships, and corporations often register for a DBA if they want to use a fictitious name that better describes their services or products or if they want to use a different name altogether.
The process for registering a DBA varies by state, but the protocol is usually:
- Choosing a unique business name
- Confirming its availability
- Filing the proper DBA forms with the relevant government agency, such as the Secretary of State or the county clerk’s office
- Paying the DBA filing fees.
South Dakota DBA name registration
Choose your name
The first step is to choose a name for your business. When choosing a name, you need to be mindful of the naming rules in South Dakota.
The naming rules state that:
- The name needs to be unique and distinguishable from other businesses.
- Business entity suffixes (such as LLC or Inc.) can only be used if that is your type of business.
- The name may not imply that the business is a government agency or it is engaged in unlawful activities.
- Certain words and phrases like “bank” and “insurance” may require additional documentation or approval from the appropriate regulatory agencies.
Check name availability
Once you have decided upon your name, you need to check if your proposed name is already in use.
Go to the South Dakota Secretary of State’s DBA business search website to search for your new DBA name and check it isn’t already in use.
Once you have confirmed your name is not in use, we recommend buying the associated web domain. Even if you aren’t ready to launch your business website by buying the domain, you prevent others from being able to use it, and it will be a useful marketing tool when you are ready to launch it.
Register your name
In South Dakota, DBAs are registered at the state level. This means you must file with the Secretary of State, not your local county. You can file online.
When you are filing the form, you will need to provide the following:
- Proposed DBA name
- Details of the owners of the business
- Your business’s Secretary of State ID
Pay your filing fees
You must pay the $10 filing fee when you submit your forms online. You can pay by credit card.
Renew, amend, or withdraw your DBA
- South Dakota DBA names need to be renewed every five years. The renewal fee is $10, and you renew online.
- If you want to change your DBA name, you must file a new form.
- If you wish to change ownership or address, you can fill in an amendment form, which costs $10.
- To withdraw your name, you have to fill in an online form. There is no cost associated with withdrawing your DBA name.
Obtain an EIN
An EIN (Employer Identification Number) is a unique nine-digit identification number the Internal Revenue Service (IRS) assigns to identify business entities for tax purposes.
If you are a sole proprietor and don’t have employees, you can use your Social Security Number as your tax ID instead of obtaining an EIN.
If the DBA business hires employees or wants to establish a separate business bank account, they must obtain an EIN.
Open a business bank account
Once you have received your EIN, you can open a business bank account.
There are many benefits to a company bank account. It allows you to accept check and credit card payments with more ease and also allows you to segregate your personal assets and business expenses.
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?
The following groups can benefit from a different name:
- Sole Proprietors: Individuals who run a business alone don’t create a separate legal entity. A DBA allows them to use another name for marketing their products or services and gives them more flexibility to adapt to changes in the market.
- Partnerships: Joint ventures between two or more individuals who want to operate under a different name than the partners’ names.
- Corporations: Businesses that want to use a name different from their name or diversify their business activities under multiple names. For example, suppose a corporation has a subsidiary that sells software named “Tech Solutions LLC,” but it also wants to sell hardware. In that case, it can file a DBA for “Tech Hardware” to create a distinction between the two business activities.
- Limited Liability Companies (LLCs): LLCs are flexible business structures that allow owners to limit their liability and protect their assets. LLCs can also file a DBA to conduct business under a different name or brand.
Why or why wouldn’t you need a DBA?
Under what circumstances would you need a DBA?
- 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 legal name.
When might you not need a DBA?
- 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.
Do I have to file with my county as well?
Filing is completed at the state level; you do not need to register with your county clerk.
Do I need to advertise my DBA?
Many states mandate that you must advertise your DBA in a local newspaper. South Dakota does not ask for this. There are many benefits to advertising your new name, but it is not a requirement.
Can I fill in my DBA forms and mail them in?
Filing can only be completed online. There is no option to complete and mail in.
How long does it take to process my DBA?
It takes 1-2 business days for your DBA to be processed in South Dakota.
Does South Dakota run an expedited service?
As DBAs are processed relatively quickly, opting for expedited service isn’t possible.
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