In Alabama, businesses are not required by the state to register a DBA / Trade Name. There are, however, several reasons a business will want to consider registering that we will cover.
What is a DBA?
A DBA, also known as “Doing Business As,” Trade Name, or Fictitious Business Name, is a name used by a business that is different from the legal name of the business. This name is often referred to as a Trade Name in the state of Alabama.
When a business wants to operate under a name other than its legal name, many states require the business to register its new business name. In most cases, this is optional in Alabama, but practically most businesses will register.
Related: How to start a business in Alabama
What is a DBA good for?
A DBA is required for Alabama businesses that want to operate under a name that is different from the legal name of the owners or entity. The DBA registration provides information on the people operating a business, so if there is an issue, the owners of a business can be tracked down.
In addition to the legal requirement, a DBA offers other benefits such as proving the existence of a business, opening a business bank account, registering a merchant account to accept credit cards, and others.
Who needs to register for an Alabama DBA?
The Trade Name, often referred to as DBA “Doing Business As” or Fictitious Business Name, is a name that is different than the legal name of the business.
When a business wants to operate under a name other than its legal name, this is known as a fictitious name. Most states require the business to register their name, but this is optional in Alabama. Even though it’s optional, depending on the business entity, there are some reasons to consider registering.
Sole proprietorships and partnerships are the most common entity to want to register a business name. These two entities are not really entities at all. Instead, they are individuals doing business. Commonly, the legal name of a sole proprietor or partnership is the owner’s full first and last name. That works for many self-employed business owners, however, many need to operate under a distinct and brandable business name.
The reason a sole proprietorship and partnership would want to register their business name is it:
- Proves the existence of the business.
- Banks, merchant processors, and vendors may require one.
- There is some protection from other Alabama businesses registering the name.
Corporations and Limited Liability Companies usually won’t file for a Trade Name as they register a unique entity name during the formation process. Some will still file for a DBA if they have another business or brand name that they want to operate under their corporate umbrella in order to have liability protection without having to form another entity.
How much does a DBA cost in Alabama?
The cost to register a Trade Name in Alabama is $30 and is renewed every 5 years.
What are the steps to file a DBA in Alabama?
One of the unique aspects of registering a fictitious name in Alabama is that the name must be in use before reserving it. You can’t reserve a name before starting the business.
Step 1: Verify Name Availability
To register your DBA, you will first want to be sure the name you want is available. Before registering a business name, you will want to first check to see that no other business is using it.
Related: How to do an Alabama Trade Name Search.
Step 2: Obtain the Trade Name Registration Form
After deciding on a name, you will want to either file online or download and mail or submit in-person, the Application to Register or Renew Trademark, Service Mark, or Trade Name form from the Lands & Trademarks Department of Alabama Secretary of State. This is the same form you would use to file a Trademark or Service Mark.
Questions on the form include:
– Applicant name
– Entity type (sole proprietorship, partnership, corporation, LLC, etc.)
– Office address
– Name of general partners (if applicable)
– DBA being registered
– Description of the goods, services, or business being provided under the business name
– How the name will be used in commerce
– Classification number (industry the business is in – see schedule in the form)
Disclaimer (if applicable)
– Names of other entities that can use the name
– Date the fictitious name was first used
Three specimens must also be submitted showing how the name will be used in business. Specimens can be original or copies of materials such as business cards, brochures, flyers, labels, decals, ads, and other proof you have been operating under the name you are applying for.
The address to mail the form and payment is:
Alabama Office of Secretary of State
11 South Union Street, Suite 224
Montgomery, Alabama 36130
Step 3: Submit the Form
Sign and date the Trade Name application form, but before doing so, only sign and date in the presence of a notary public.
Once the form is filled out and notarized, send a check for the $30 filing fee made payable to the Alabama Secretary of State.
Are there any naming restrictions when filing an Alabama DBA?
In Alabama, banking-related words like Bank, Banking, Banc, Savings & Loan, etc, are not allowed unless approval has been granted by the Alabama Banking Commissioner’s Office. Insurance-related words are also not allowed, along with words using a professional designation such as Engineer, Attorney, and Accountant are prohibited unless the business has professional licensing from the state.
Names that have words similar to a government agency, like the Department of Revenue, Treasury, FBI, etc. are prohibited as well.
A Trade Name also can’t use a business entity suffix that is different from the type of entity. For example, a sole proprietorship can’t use LLC or corporation in its name.
Can someone use my business name after registering an Alabama DBA?
While registering your Trade Name will keep someone else from registering the exact same name in Alabama, it does very little to stop someone else from operating a business under that name in other states.
If stopping others from using your business name is important, you can protect it through a federal trademark through the U.S. Patent & Trademark Office.
Learn more about trademarking a business name.
Does a DBA need an EIN?
An EIN or Employer Identification Number (also informally called a business tax ID number) is a unique nine-digit number that some businesses will register for through the Internal Revenue Department (IRS). An EIN is required for partnerships, corporations, multi-member LLCs, or any business that has employees.
Sole proprietorships and single-member LLCs without employees can use the owner’s social security number to identify the business.
There is no cost to get an EIN when registering directly from the IRS.