How to Register a DBA in Vermont (Step-by-Step Guide)
Starting a new business can take time and effort. Many decisions must be made, and it’s important to comply with state laws when starting your business. This can be overwhelming, especially for small businesses lacking a dedicated admin team. One of the most important decisions you will make early on is naming your business. You can use a different name than your legal name through a DBA. This article will explain what a DBA means, the advantages and disadvantages of one, and provide a guide on how to apply for one in Vermont.
What is a DBA?
The DBA acronym, meaning “doing business as,” refers to a company or individual conducting business operations under a fictitious name. They are often called assumed names, trade names, or fictitious business names.
A DBA means a business can use a different name while still being legally accountable for the business under its legal name.
For instance, if John Smith operates a sole proprietorship that sells handmade candles, he can register a DBA name, such as “The Candle Co. by John,” to promote his products and services instead of using his own name.
The process for registering a new DBA varies by state. Generally, the process involves
- Selecting a unique business name
- Verifying its availability
- Filing the appropriate forms with the relevant government agency, such as the Secretary of State or county clerk’s office.
- Paying a DBA filing fee
Vermont DBA name registration
Choose your name
First, you need to choose a name for your business. The name must adhere to the Vermont state-wide rules. A full list of the naming rules can be found here.
The rules state the following:
- The name must be unique.
- The name must be distinguishable from other names.
- The name must not include any deceptive language.
- The use of business entity identifiers unless it is that type of entity.
- The name must not use words or phrases that indicate government affiliation.
- The name must not include any discriminatory or obscene language.
Check name availability
Once you have chosen your name, you need to confirm its uniqueness.
You can search for names already in use in the state by heading over to the Vermont Secretary of State’s corporation’s division and conducting a name search.
Once you have confirmed your name is one of a kind, we recommend buying the web domain. Business websites are excellent marketing tools; once you purchase the domain, it is yours for life. Even if you are still getting ready to launch your website by buying the domain, you prevent others from being able to use it.
Register your name
In Vermont, you register your new name at the state level. You can file online at the Vermont Secretary of State’s Corporations Division website with an account or request a registration form to file by mail. If you request a form, enter “assumed name registration form” in the “form(s) being requested” box.
The registration form will ask for the following details:
- The assumed name being registered
- The principal office address
- Name of the business owner
- Purpose of business
If you have requested a form and are filing by mail or delivering the forms yourself, the address is:
Vermont Secretary of State
128 State Street
Montpelier, Vermont 05633-1104
Vermont prefers online applications, which are handled significantly quicker than mailed-in or delivered forms.
Pay your filing fees
The filing fee is $50.
Certified copies cost $25.
A certificate of status costs $25.
Renew, amend, or withdraw your DBA
- Your new DBA name is valid for five years. It can be renewed online. Renewal costs $40.
- If you want to change your DBA name, you must cancel your registration and file a new one.
- You can file a business amendment online if you need to change any of the registration details. It costs $20.
- You can withdraw your name online or by requesting a withdrawal form. The fee is $20.
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:
- Customizable name: A DBA can be altered more quickly than a legal business name, allowing business owners to change their name according to their evolving products and services or market conditions. It also allows multiple names to target different products and markets, increasing the scope and customer base.
- 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.
- Brand recognition: A well-crafted DBA name is often more descriptive and memorable than a legal name. It helps in brand recognition, business promotion, and marketing and advertising the products or services easier.
- Cost-effective: DBA registration is usually less expensive than forming limited liability companies (LLCs). It is a more affordable option for small business owners and entrepreneurs that want to create a unique identity without spending too much money.
However, there are a few downsides to registering a DBA:
- Personal liability: DBAs do not provide legal protection or personal liability protection, meaning that the business owner is personally responsible for all debts, obligations, and lawsuits related to the business. It exposes the owner to the risk of personal bankruptcy, as the owner is solely responsible.
- Legal and administrative burden: Using a DBA name requires registering the name with the relevant government agency, which can be time-consuming. The legal and administrative burden increases with multiple DBAs, requiring the owner to maintain and update legal documents periodically.
Who needs a DBA?
- Sole proprietors: These individuals run their businesses without forming a separate legal entity. A DBA allows them to use a different name for marketing their products or services, giving them more flexibility to adapt to changes in the market.
- General partnerships: Joint ventures between two or more individuals who want to operate under a different name than the partners’ names.
- Corporations: Companies often need to use a different name than their legal name or take on multiple names for different business activities. For instance, if a company has a subsidiary that offers landscaping services under “Green Solutions LLC,” but they also want to get into selling gardening supplies, it can file a DBA for “Garden Supplies” to distinguish 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.
Why or why wouldn’t you need a DBA?
You would need a DBA if:
- You intend to operate your business under a name other than your own or your company’s name.
- You want a trading name that is easier to market, remember, or describe your products or services.
- You are a sole proprietorship, partnership, corporation, or LLC and want to conduct business under multiple names.
- You want to test a new product or market without changing your legal name.
You may not need a DBA if:
- You are operating your business under your personal name.
Do I need to advertise my new DBA name in a local newspaper?
Many states mandate that new names be advertised in your local area through a newspaper, but Vermont is not one of these states. There is no need to advertise your new name. However, there are many benefits to advertising your new name.
Do I need to apply for additional licenses?
Depending on the type of business, you may need to apply for additional licenses. It is important to note that a DBA is not a business license, and you may need to apply for one separately.
What is the processing time for my DBA?
Online filing is generally processed on the same day. Please allow 7-10 business days to process filings received by mail. Online registration is the preferred method in Vermont. There is no extra fee if you register online.
If I want to do business under my name, do I need to register a DBA?
Under Vermont law, individuals are not required to register an assumed business name if they are doing business under a name that includes their full legal name, e.g., “John Smith Carpentry” or “John C. Smith Carpentry.”
Will I be reminded to renew my DBA?
Assumed business names may be renewed within two months before the expiration date. You will be notified at the beginning of your renewal period and given instructions on how to file your renewal.
Find out how to register a DBA in your state
Click below to get started