Also called an assumed name or fictitious name, a DBA is a tool businesses use to operate under a name that is not their legal name. For example, my law firm’s name is “R. W. Bobholz Law, PLLC” but the dba is “Law Plus Plus.”
The DBA Law
Under North Carolina General Statute § 66-71.4, “before any person engages in business in this State under an assumed business name, the person must file an assumed business name certificate in the office of the register of deeds…” The statute goes on to say you must file in the county you do business, but just one county if you do business in more than one county. The statute also explains you can obtain the certification for up to five names on the same certificate.
It is our recommendation to file each separate DBA on its own certificate because it makes transfers and cancellations easier in the future.
It only costs $26 in North Carolina to obtain a DBA.
The Consequences For Not Filing DBA
If you don’t file for a DBA, yet operate under an assumed name, you can be liable to a person for their reasonable expenses in ascertaining the information that was to be included in the certificate. The scary part is that you can be liable for their attorney fees in this process! The cost could end up being thousands.
DBAs and EINs
All types of businesses can operate under an assumed name. Sole proprietors are the most common users of assumed names. Without a DBA, a sole proprietor must only operate as the legal name of the person. A company called “Richard Bobholz” is not descriptive or fun.
Fictitious names do not impact your EIN in any way, shape, or form. When applying for an EIN, you still want to state your legal name. If you have a doing business as name, you can include that where it asks for trade name. However, if you obtain an assumed name after your EIN, you do not need to amend the EIN. You may need to amend your bank records though.
Richard is the managing attorney for Law Plus Plus, a local small business law firm. As managing attorney, he helps small businesses and nonprofits startup, creating the contracts, and navigate the legal needs of businesses. Some of his practice areas include: corporate, contract, mergers & acquisitions, corporate litigation, and estate planning.