MyCorporation CEO Deborah Sweeney explains how utilizing a DBA ( Doing Business As ) allows a business owner to separate his or her assets from the business entity itself.

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[Video Transcript]: A DBA is a necessary step to separating a business entity from its owner. A DBA, which stands for Doing Business As, is required by most states before you conduct business under a name other than the business name or one's personal name.

The DBA is particularly important for banking. If you don't set up a DBA, it will be impossible to issue and receive checks under the business name. There are two reasons for this.

First, a business owner cannot use his personal account to issue or receive checks using his business name.
Second, a business owner can't open an account under the business name without first getting a DBA.

By filing a DBA before attempting to set up bank accounts, you'll save yourself a lot of trouble. With a DBA in place, the business owner is still connected to the business, so that he or she can receive checks in the name of the business and keep personal and business accounts separate, separating the business entity from the business owner.

DBA's are most commonly used by sole proprietors. Most people use a business name other than their own name, so it's necessary to get a DBA. Here's an example. If an entrepreneur, say Mario, wants to open a donut shop called The Perfect Donut, he needs to get a DBA that establishes that Mario is doing business as The Perfect Donut. Then, Mario can receive checks that are made out to The Perfect Donut, and sign checks under that name. Corporations, LLC's, and other business entities can also use DBA's, which allow them to do business using another name without forming a corporation. A DBA has many benefits. It gives an owner liability protection for personal assets, allows an owner to arrange taxation in the most beneficial way, and permits an owner to use different names for business endeavors.

For help setting up DBA's, LLC's and corporations, contact MyCorporation to get your business started.

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