What’s in a name? DBA filings for construction businesses

The name of your construction business plays a critical role. It helps project owners find, recognize and ultimately trust you. But as your business grows, you may encounter situations where a different name better suits your strategic objective. Whether you’re looking to expand your services, sharpen your existing brand or simplify how you present yourself to the marketplace, a “doing business as” (DBA) filing may come in handy.

Like a special nickname

Do you introduce yourself to others using the full name on your birth certificate? Many people use a shortened version or a nickname, depending on the setting and audience.

The commercial version of this is a DBA filing (or just DBA, for short). It’s also sometimes known as a “trade name,” “assumed name” or, rather misleadingly, “fictitious business name.” Essentially, a DBA allows you to conduct business under a name other than your legally registered business name.

Sole proprietorships and general partnerships whose business names differ from the owners’ legal names — that is, what’s on their birth certificates — are generally familiar with DBAs. However, there are times when other entity types can benefit from one. Just keep in mind that a DBA doesn’t create a separate legal entity or change your construction business’s tax classification. It’s simply another name under which the existing business operates.

Reasons to consider it

Depending on applicable state or local law, you may need a DBA to legally operate under a name that differs from that of your registered business. It’s often one of the simplest and least expensive ways to operate under multiple names without launching separate corporations or limited liability companies. For instance, you might use a DBA when:

• Expanding into a new geographic market,
• Launching a new division under a separate brand name, or
• Rebranding an acquired business while continuing to operate under the same legal entity.

Filing a DBA can help connect a trade name to the legal business entity behind it, which may reduce confusion in contracts, banking and customer communications. For example, say you launched your company as Apples and Oranges Construction Inc., but you’ve become commonly known in your area as A&O Contractors. If that shorter name appears on contracts, invoices or checks without a DBA tying it back to the corporation, the mismatch could create confusion or complicate matters if a dispute arises.

In other cases, a DBA may be needed if you use a website or domain name as a public-facing business name differing from that of your registered business. For instance, to achieve more targeted marketing, you might want to register multiple website domains to segment your services. You could use the word “concrete” in one URL and “asphalt” in another. That way, you could market to customers with specific needs.

Also, businesses with names that are long, hard to spell or not search-engine friendly can benefit from using a catchier trade name. Remember, however, a DBA isn’t the same as a trademark. Check into whether the name is already in use or protected before investing in signage, websites or other marketing materials.

Lastly, banking institutions sometimes require proof of a DBA filing to open a business banking account or apply for a commercial loan. They may ask for an employer identification number from the IRS, too.

Nuts and bolts

DBA requirements, fees and payment methods vary by state, county and city. Depending on your entity type and filing location, you may need to confirm that your construction business is in good standing before registering a DBA. You may also need to publish an announcement in a local newspaper to notify the public of who’s behind the name.

If information in your filing changes — such as your address, ownership or responsible parties — you generally must either file an amendment or re-register. You may need to renew the registration periodically as well, with deadlines varying by jurisdiction.

Bear in mind that you can’t add “Inc.,” “Corp.” or “LLC” to the end of your DBA if the business isn’t incorporated or a limited liability company. And, in some states, a DBA filing doesn’t prevent another business from registering the same name.

For construction businesses in particular, it’s important to keep the names used on various documents consistent — or at least clearly tied to the same legal entity. These include licenses, permits, bid documents, certificates of insurance, bonds, contracts, W-9s and bank accounts.

Full picture

A DBA can be a useful tool for marketing, operations and growth — but only when it’s handled properly and kept current. The filing rules vary, and the name you use can affect contracts, banking, tax-related recordkeeping and legal compliance. So, it’s important to look at the full picture before filing.
Work with a qualified attorney to explore a DBA and, if you decide to move forward, undertake the process. Meanwhile, contact us for help evaluating how a DBA may fit into your strategic plan and overall financial strategy.