For any number of reasons, an individual or corporation may do business under an assumed name, also known as a DBA (Doing Business As). According to SOSDirect, “By filing an assumed name certificate, you are notifying the public that a particular business entity intends to conduct business under a name other than its legal name. This means that generally an entity may advertise under the assumed name, use the assumed name on business cards and letterhead, etc.” Perhaps an individual is beginning to earn money with an activity and has created a name under which that activity functions but has not yet formally incorporated that business. Or perhaps a large business has several profit-making pursuits and uses a DBA for each different pursuit. The spirit behind the law is to provide public disclosure and to inform those interacting with the DBA of the identify the person or entity behind the business name.
Definition of an Assumed Name
According to the Texas Business and Commerce Code, an assumed name is defined as the following:
- For an individual, a name that does not include the surname of the individual;
- For a partnership, a name that does not include the surname or other legal name of each joint venturer or general partner;
- For an individual or a partnership, a name, including a surname, that suggests the existence of additional owners by including words such as “Company,” “& Company,” “& Son,” “& Sons,” “& Associates,” “Brothers,” and similar words, but not words that merely describe the business being conducted or the professional service being rendered;
- For a limited partnership, a name other than the name stated in its certificate of formation;
- For a company, a name used by the company;
- For a corporation, a name other than the name stated in its certificate of formation or a comparable document;
- For a limited liability partnership, a name other than the name stated in its application filed with the office of the secretary of state or a comparable document; and
- For a limited liability company, a name other than the name stated in its certificate of formation or a comparable document, including the name of any series of the limited liability company established by its company agreement.
Tex. Bus. & Com. Code Ann. § 71.002 (West)
Questions about using a DBA to sign contracts or other legal documents are best answered with the help of a knowledgeable business attorney.
Filing a DBA
Before 2019, all assumed names were filed in the county or counties in which they operated. With the change in HB 3609, however, only non-registered business operations, such as sole proprietors and general partnerships must now file with the county. Other types of businesses, such as corporations, LLCs, and limited partnerships will file directly with the Texas Secretary of State.
Section 71.103 of the Texas Business and Commerce Code states that
(a) A corporation, limited partnership, limited liability partnership, limited liability company, registered series of a limited liability company, or foreign filing entity required to file a certificate under Section 71.101 shall file the certificate in the office of the secretary of state.
Tex. Bus. & Com. Code Ann. § 71.103 (West)
What a DBA is Not
Importantly, a DBA is not a business license. It also does not provide trademark rights or exclusive rights. Unlike a corporation or LLC name which must have a unique name in the state, multiple counties as well as the SOS may have similar or identical assumed names on file, as noted below:
(a) This chapter does not give a registrant a right to use the assumed name in violation of the common or statutory law of unfair competition or unfair trade practices, common law copyright, or similar law.
(b) The filing of a certificate under this chapter does not in itself constitute actual use of the assumed name stated in the certificate for purposes of determining priority of rights.
Tex. Bus. & Com. Code Ann. § 71.157 (West)
Assumed names may be helpful for a business. A skilled business attorney will offer guidance and expertise to determine whether or not using a DBA is the best choice for a client.
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