If you run a business under an assumed name in Alabama, you may want to set up a DBA. Short for “Doing Business As,” a DBA serves as an alternate title for your business. Often, a DBA is the name customers will use to refer to your company. In this guide, we’ll cover everything you need to know about DBAs: who needs one, who doesn’t, and two easy steps to filing with the state.
In Alabama, the DBA is actually called a “Trade Name.” Essentially, they’re the same concept. “Trade Name” is just the terminology used by the state. For consistency, we’ll call it a Trade Name throughout the rest of this guide.
NOTE: Keep in mind that filing a trade name will not give your business protection through the corporate veil like an LLC will. If this is something you want or need, don’t fret, there are many top rated LLC formation services that can help you take care of the paperwork.
Do You Need an Alabama Trade Name?
Not all business entities in Alabama need a Trade Name. Ordinarily, a business needs a Trade Name when the name of their business differs from the name registered with the state.
So let’s say that Lauren operates a sole proprietorship; her legal business formation documents list her full name as the legal owner of the business. But if she wants to run her shop under the name Sew Sweet Creations, she’d need to file a Trade Name in order to use that name. A Trade Name is also useful for corporations which want to establish additional businesses or locations with a name that’s different from the Corporation name.
Limited liability companies, nonprofit corporations, and corporations operating exclusively under the name on file with the state usually do not need a Trade Name. They may choose to use one if they want to establish a new product line or chain of businesses under their original parent company.
An Alabama Trade Name does present a few advantages. While it doesn’t offer any specific legal protections or tax incentives, a Trade Name allows you to get a business bank account. You can also give your customers peace of mind—most people are more comfortable writing a check to a business than an individual.
Unlike some states, Alabama does not require most entities to file their Trade Name. That said, if you want to prevent other businesses from using the name, you’ll need to complete the filing process. Filing grants you exclusive ownership to your name.
1) File Your Trade Name with the Alabama Secretary of State
In Alabama, if you are the first to use and formally declare a Trade Name with the state, you have exclusive rights to the name. If no one declares it with the state, it’s possible for two businesses in the state to have the same name. If you want to prevent that, you can reserve your Trade Name.
Before you reserve your Trade Name, you’ll want to run a Business Entity Search. This search will help you know if someone has already filed that name. If no results pop up, then your name is free to reserve.
Next, you’ll need to complete an Application to Reserve or Renew Trademark, Service Mark, or Trade Name. This form includes important information about your business, including your entity type, the way you’ll use the name, and the date the name was first used. In Alabama, the Trade Name process is a little unique; you have to use the name first, and then declare it with the state. (In other states, you often can’t use a name until you’ve registered it).
There is a $30 filing fee for this application. You can pay by check or credit card. If using a card, you’ll also need to fill out a credit card payment slip. With your application, you’ll need to include “specimens,” or objects that show use of the trade name, such as business cards, letterhead, and other documents. These can be original documents or legible copies.
2) Maintaining your Alabama Trade Name
Your initial name registration grants you five years of exclusive use of that Trade Name. After that, you’ll need to submit a renewal with the state. The form is exactly the same as the initial registration. If you miss this deadline, your name will be up for grabs again and you could potentially lose your exclusive rights.
Like the registration, the renewal fee is $30.
Need Help Filing your Trade Name?
If this process sounds like a hassle, you can get help with setting up your business’s name with a service like Legalzoom. They make the process simple: you simply provide them with the necessary information about your company, and they’ll fill out the paperwork so you don’t have to. The process is both easy and affordable, letting you focus on running your business.
Conclusion
Your name is an important part of your business, but keeping compliant with state requirements can be tricky! We hope this guide made it quick and easy to set up your Alabama trade name.