Table of Contents:
When filing your Beneficial Ownership Information (BOI) report under the Corporate Transparency Act (CTA), it’s essential to account for all “Doing Business As” (DBA) or trade names your entity operates under. Understanding DBAs for BOI reporting accurately could avoid compliance issues, so it’s important to understand what a DBA is, why entities use them, and how to ensure proper reporting.
What is a DBA, and Why Do Entities Use Them?
A DBA allows a business to operate under a different name, without creating a new legal entity. For example, if John Smith owns a sole proprietorship named “John Smith Enterprises” but wants to operate under the name “Smith Consulting,” he would file a DBA in his state jurisdiction. Businesses adopt DBAs for several reasons, such as:
- Branding: To create a unique identity for a product line or service.
- Market Differentiation: To appeal to a specific audience or industry segment.
- Legal Protection: To ensure all business activities are legally recognized under the new name.
The process for filing a DBA varies by state, county, and city. Start by checking with your local county clerk’s office, state government website, or a professional legal advisor to understand the specific requirements in your area.
Identifying DBAs for BOI Reporting
For purposes of the CTA, it is important to understand that DBAs that need to be reported may not be ones that are officially registered with the Secretary of State. Owners should evaluate alternative names used while conducting business even without a formal filing with the state.
Renewing or Removing DBAs
DBAs are not perpetual and must be renewed periodically, often every five years, but it depends on local laws. The renewal process is similar to the initial filing and ensures that the DBA remains active and legally recognized. If a DBA is not renewed or the business stops using it, you may want to update your BOI report to reflect the change. This ensures the accuracy of your filings and aligns with ongoing compliance obligations.
Don’t Overlook Reporting a DBA or Alternate Name
As the year-end deadline for millions of BOI reports approaches, it’s easy to overlook the need to report DBAs on the form. However, including all active trade names is an equally important part of your compliance obligations. Take the time to review your business’s operations, identify all DBAs, and ensure they are accurately reflected in your BOI report.
