By Arden Bonzo
BC Law EIC Student
April 2023
Among the first tasks in building an online LLC is choosing a name that reflects what the business offers and that uniquely sets your business apart from others. It is easy to see how an entrepreneur may be emotionally attached to the name they choose—when you file your LLC’s articles of organization you are sharing the name of your brainchild with the world. This is not to mention all the time dedicated to surrounding that name with design, branding, and goodwill.
But perhaps your business offers a wide range of goods or different kinds of services. The name of your LLC might not reflect all the facets of your business as your LLC evolves. If you feel that your LLC would benefit from operating with multiple brands without legal separation, consider obtaining a DBA.
Imagine that during the COVID pandemic you discovered a love for plants. You founded an online business named “Plant Depot LLC,” which connects customers with local businesses selling indoor and outdoor plants. You then decide to create another website that exclusively caters to those searching for herbs. To reflect the smaller selection, you decide to call the site “Herbalicious.” To use Herbalicious for providing services on behalf of Plant Depot LLC, you choose to obtain a DBA. The DBA would reflect that Plant Depot LLC is doing business as Herbalicious.
But what if, like Plant Depot LLC, your business is operating entirely online? Must you obtain a DBA? From where should you obtain a DBA?
A DBA, also called a business certificate, trade name, or fictitious business name (FBN), allows your business to effectively have multiple brands under one LLC. A DBA on its own does not form a new entity or provide trademark protections. However, a DBA would allow Plant Depot to conduct business using the name “Herbalicious.”
With a DBA connecting the two, you could open a bank account under Herbalicious, preventing bank charges from being innocently flagged. A customer knows that Plant Depot LLC is the legal entity operating Herbalicious, thereby promoting transparency in the marketplace. A DBA also gives customers legal recourse if they are harmed, by signaling who is controlling Herbalicious. Additionally, those operating Herbalicious are protected by the limited liability of Plant Depot. Legal protection is important for every business, including those conducted entirely online.
The process for obtaining a DBA varies by state. In Massachusetts, a DBA is obtained at the local level, in the city or town where the primary place of business is located. Many towns provide online filing, and filing fees are relatively modest. The fee for filing a DBA in Boston is $65 and the certificate must be renewed every 4 years.
Some towns in Massachusetts require that a business obtain zoning verification prior to obtaining a DBA in that town. Zoning laws regulate the activity that can be conducted in a particular location. For example, a manufacturing plant could not be run in an area zoned as residential.
The details of the business matter, however, when determining whether a business run at home is in violation of a particular location’s zoning laws.
Businesses run entirely online, especially those in the service industry like our fictitious company Plant Depot, are unique; customers do not visit the premises and there is no inventory being stored on site. Despite these characteristics, a business conducted entirely online should nonetheless contact the town clerk to be sure they are in conformity with local laws, regulations, and ordinances, as there is little guidance on point for the entirely online business owner.
Online businesses, though unique, are subject to many of the same regulatory requirements as their brick-and-mortar counterparts. Online businesses are responsible for registration with the Secretary of State and tax filing requirements for their particular entity type, as well as compliance with insurance and employment regulations. DBAs are also an important tool for online businesses seeking to develop alternative brands under the liability limiting scheme of the umbrella company.