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Are DBAs and FBNs necessary? Does your company need one?

by | Dec 23, 2022 | General Counsel

There are pros and cons of registering a Doing Business As (DBA) in New York. On the pro side, registering a DBA can help protect your business from legal issues. Additionally, registering as a DBA can give you access to specific resources and networking opportunities. Registering as a DBA is required in New York State for LLCs, partnerships, corporations, franchises, non-profits, and sole proprietors. Finally, registering as a DBA can be costly.

If you have no reason or plans to change, distance, or separate your company into different divisions, then just using the legal name should suffice. However, if you plan to expand your operation into other states or even internationally, it would make sense to get registered so that you can comply with all applicable regulations.

When is it time to create a fictitious business name?

One of the most critical and often overlooked steps in starting a business is choosing a business name. A fictitious business name (FBN) can provide a helpful shield for your business when conducting due diligence and protecting your intellectual property. However, there are no etched-in-stone rules for selecting an FBN. Plenty of factors should be considered before making a decision.

First and foremost, it is vital to consider the nature of your business. For example, suppose your venture involves high-level research or exclusive content that you don’t want to be associated with another company. In that case, an FBN may be necessary. In contrast, if your company is more generic or represents an industry that is less sensitive to trademark infringement, then using a FBN might not be necessary at all.

Ultimately, the decision whether or not to create an FBN depends mainly on the size of your company, what is recommended by outside general business counsel and the sensitivity of the industry in which you operate. However, considering these factors will help ensure that your choice is informed and effective.

Another consideration

Another factor to consider is your target market. For example, if you’re planning on targeting customers in one specific city or country, then using an FBN may help protect against the competition.